Author: CoinW Research Institute
Abstract
With the development of applications such as DeFi, account abstraction, and AI Agents, on-chain authorization is gradually evolving from one-time signature confirmations into a long-term, reusable execution authority. At the same time, new changes are taking place: AI Agents have already begun to possess the ability to automatically request services and complete payments automatically. For example, the x402 protocol uses the HTTP 402 status code to allow Agents to instantly pay for resources and services with stablecoins without human intervention. This makes on-chain behaviors no longer isolated transactions, but continuous automated collaborative processes.
Against this background, the issue of authorization is further amplified. The current authorization methods in the Web3 system remain vaguely defined and coarsely expressed, often only addressing whether assets can be used, but struggling to answer what specific actions are allowed and to what extent. ERC-8004 is proposed precisely in this context. It does not define new assets, nor does it change how transactions or payments are executed, but rather attempts to establish a permission model for on-chain behaviors that can be understood and verified by the system, making authorization itself a describable, constrainable, and manageable entity.
From a broader system perspective, ERC-8004 is not in a competitive relationship with account abstraction and automated payment protocols like x402, but rather in a division of labor across different layers: x402 addresses the issue of value exchange after an action occurs, while ERC-8004 focuses on who is allowed to act and whether permissions are overstepped before an action occurs. In scenarios such as DeFi, AI Agents, and enterprises and RWA, this structure of permissions first and payments later is expected to drive authorization from the asset level to the action level, providing a controllable foundation for more complex and long-term automated collaboration. Although it still faces practical challenges in terms of learning costs, wallet support, and user experience, ERC-8004 is not a short-term narrative tool, but rather a fundamental standard concerning whether Web3 can support the operation of complex systems.
1. The Motivation for Proposing ERC-8004
As on-chain infrastructure continues to evolve, the capabilities related to asset tokenization and transaction execution are continuously being abstracted and enhanced. From ERC-20, NFTs, to multi-signature wallets and account abstraction (ERC-4337), the barriers for users to participate in on-chain activities are constantly decreasing, and the accounts themselves are becoming increasingly intelligent.
But in this process, a fundamental question has never been systematically resolved: the authorization mechanism itself has undergone little substantive evolution. In early Web3, authorization meant a single private key signature. Users expressed "I agree" through the signature, whether it was a transfer, contract call, or approve operation. Authorization was regarded as a one-time confirmation action, with the risk boundaries entirely borne by the user themselves.
However, the on-chain environment today has already changed. In DeFi scenarios, approvals are often long-term valid; under automated strategies and Session Key systems, authorizations are repeatedly used; in the model where AI Agents or Bots execute transactions, users no longer directly participate in every operation. Authorization is evolving from a one-time confirmation into a continuously existing execution capability, more like delegating the power to do something for a period of time.
The problem is that the current Web3 infrastructure offers almost no clear, unified way to constrain such long-term authorization states. Ambiguous permission scopes, difficult revocation of authorizations, and unpredictable risks have become the source of numerous security incidents. At the same time, account abstraction further amplifies this contradiction: when an account can automatically execute transactions and have gas paid by a third party, what it can and cannot do becomes even less clear.
It is in this context that ERC-8004 was proposed. It attempts to make up for a long-missing component in Web3: establishing a clear, enforceable, and system-understandable permission model for authorization itself.
2. Core content of ERC-8004
The entry point of ERC-8004 is not in the asset form or the method of transaction execution, but in whether the authorization can be described separately, validated independently, and continuously managed at the system level.
2.1 What does ERC-8004 define?
According to the Ethereum Improvement Proposals (EIP) official website definition: ERC-8004 is a standard protocol for discovering, selecting, and interacting with trusted autonomous agents on Ethereum. It builds a decentralized agent infrastructure that enables trustless interaction through on-chain registration, reputation, and verification mechanisms.
The autonomous agents here are not limited to AI Agents, but refer to any entity that can be authorized and independently perform actions, such as contracts, automated scripts, multisignature wallets, or service processes. ERC-8004 focuses on whether the executing entity has the capability of clear authorization and defined authority boundaries, with AI Agent being just one typical application.
From a more general perspective, ERC-8004 is not a new asset standard or account type, but a framework for expressing and verifying on-chain permissions, used to describe what actions a subject is allowed to perform under certain conditions and to verify them before execution. Therefore, ERC-8004 focuses not on "what money is" or "how transactions are executed," but on "which actions are allowed." It does not create new assets or change existing asset properties, but simply adds a clear and verifiable layer of permission rules on top of assets and accounts.
In addition, ERC-8004 is not an alternative to account abstraction (ERC-4337). Account abstraction focuses on how transactions are executed, while ERC-8004 addresses permission determination before a transaction occurs. If account abstraction makes accounts more flexible, ERC-8004 sets clear boundaries for this flexibility.
The core of ERC-8004 lies in transforming authorization from an action implied in the signature into a permission object that can be clearly described, independently verified, and continuously managed.
2.2 Core Mechanism Framework of ERC-8004
To understand the core mechanism of ERC-8004, one can first set aside the complex technical implementation and view it as a "on-chain permission manual." In traditional authorization logic, users often make only a general decision: "I agree for you to operate my assets." As for exactly what can be done, how much can be done, and for how long, the system does not further differentiate. Within the framework of ERC-8004, however, a single authorization is no longer a vague agreement, but is instead broken down into a set of clearly described rules that are enforced by the system. This "permission manual" typically includes the following five key pieces of information.
Authorized Entity (Who): Who is allowed to perform?
First, it needs to be clear who is granted the right to execute. In ERC-8004, the authorized party is no longer limited to a fixed wallet address, but can also be a contract, an automated Agent, or even a Session Key for short-term operations. This allows authorization to adapt to more complex scenarios, such as allowing a certain strategy contract to perform operations within a defined scope, or enabling an Agent to complete specific tasks without the need for repeated signatures. Importantly, the permission is always granted to a "specific entity," rather than being vaguely handed over.
Executable Action (What): What operations are allowed?
Secondly, it is about which behaviors are allowed to be executed. Traditional authorization is often an all-or-nothing approach; once authorized, it is by default assumed that the contract is allowed to freely call within the scope of the permissions. In the design of ERC-8004, authorization can be precisely specified to specific types of actions, such as allowing only the execution of swap, transfer, or a certain category of function calls, rather than defaulting to opening up all possible operations. ERC-8004 answers not just whether something can be used, but to what extent it can be used.
Constraints (Under what conditions): Under what conditions can it be executed?
This is the key part that distinguishes ERC-8004 from traditional authorization. In permission documents, authorization is usually accompanied by explicit restrictions, such as: upper limits on single or cumulative amounts; frequency or number of execution limits; applicability only to specific protocols, pools, or contract addresses, etc. These conditions are not post-monitoring rules, but preconditions that must be met before execution. Once the conditions are not met, the operation itself cannot be executed.
Effective and Expiration Rules (When): When does the authority come into effect and when does it terminate?
ERC-8004 also introduces clear concepts of time and lifecycle. Permissions can be set to: (a) be valid only during a specific time period; (b) automatically expire after a single use; (c) be revoked at any time. This makes permissions no longer a long-term burden that cannot be reclaimed once given, but rather a temporary capability that can be finely managed.
Method of Verification (How enforced): How are the rules actually enforced?
Finally, and perhaps most easily overlooked: how these rules are enforced. The core idea of ERC-8004 is to perform permission checks before an action is taken. If a certain action does not comply with the pre-defined permission rules, the system will directly reject the execution, rather than holding people accountable after the problem occurs. This is exactly the fundamental difference between ERC-8004 and traditional risk control logic.
2.3 New Capability Types in ERC-8004: Why Was It Not Possible Before?
At first glance, ERC-8004 merely refines permissions, but the original Ethereum authorization model was actually unable to express complex authorization logic. Traditional authorization only checks whether an address is allowed to perform an action, and once authorization is granted, what can be done, how much, and when it can be done are all unrecognized by the system.
The core breakthrough of ERC-8004 is upgrading authorization from "identity judgment" to "behavior judgment." The system begins to determine whether an operation complies with the user-defined permission boundaries, rather than merely confirming who initiated it. This naturally includes conditions such as amount, frequency, scope, and validity period in authorization, without relying on users to revoke it afterward or manual monitoring.
When authorization logic is structured, it first gains the ability to be composable and reusable. Multi-step, cross-protocol operations can be clearly restricted during the authorization phase, rather than being left for ad-hoc judgments at execution time. Because of this, ERC-8004 truly opens up space for Agent scenarios. Automated programs no longer require "infinite authorization," but are confined within clearly defined, verifiable behavioral boundaries, and execution is rejected if boundaries are exceeded.
What ERC-8004 adds is not simply "safer authorization," but makes the authorization logic understandable and executable by the system, which is the fundamental difference between it and traditional authorization mechanisms.
3. Potential application directions of ERC-8004
ERC-8004 is not a standard designed for a specific product; it is more like a common language for authorization capabilities. Therefore, its application value does not lie in a sudden burst in a single scenario, but in the shared demand for the same type of capability when multiple systems face increasingly complex authorization.
DeFi: From "Asset-level Authorization" to "Action-level Authorization"
In the current DeFi system, the most common authorization method is still "one-time authorization, unlimited amount." For example, users need to approve a contract first in order to perform a swap, loan, or staking, which essentially transfers the overall control of the assets. This is very efficient in terms of user experience, but the risk is also obvious: once the contract is upgraded, attacked, or used in an unexpected logic by the user, the authorization itself becomes a risk amplifier. ERC-8004 shifts the authorization target from assets to specific actions. For example, users can specify: it's not that I allow this contract to use my USDC without limit; rather, I allow it to use no more than 1,000 USDC within 24 hours to complete one swap operation. Although some projects have already tried to limit the scope and duration of authorization, most are currently operating independently. The value of ERC-8004 lies in standardizing action-level authorization, achieving reusable and composable permission management, and fundamentally enhancing risk control capabilities.
AI Agent: Provides verifiable permission boundaries for automated execution
As AI Agents gradually participate in on-chain decision-making and execution, the issue of authorization is amplified to a new level. The value of an Agent lies in its continuous operation and automatic execution, but this also means it must hold certain operational permissions for a long time. If there is a lack of clear permission boundaries, so-called Agents are essentially just automated programs with full user control, and the risks will not decrease simply because they are "intelligent." ERC-8004 provides Agents with a system-level verifiable authorization boundary. What operations an Agent is authorized to perform, the scope in which it can act, and whether there are time restrictions can be verified before execution, rather than relying on post-hoc monitoring. Only when the permissions themselves are structured and verifiable does automated execution have a credible premise.
Coordination with the x402 protocol: Making Agent behavior "authorizable and billable"
In the Agent scenario, another key issue beyond authorization is: after an action is permitted, how value is exchanged. Some application-layer protocols are attempting to address this issue. For example, the x402 protocol re-enables the HTTP 402 (Payment Required) status code, allowing Agents to automatically complete stablecoin payments when requesting resources or services. In this architecture, ERC-8004 and x402 operate at different layers but form a complementary relationship. ERC-8004 focuses on "who can do what and whether it is allowed," establishing permissions and trust boundaries for actions; x402 addresses "how to complete payment and settlement when an action occurs." The former does not rely on the latter to operate, and the latter does not require ERC-8004 as a prerequisite. However, in the Agent economy, the two respectively assume roles in the permission layer and the payment layer. This layered collaboration enables Agents to complete the entire process from permission verification to value exchange without human intervention, also avoiding the complexity of mixing identity, authorization, and payment logic within the same system. As the activity of Agents increases in scenarios such as content retrieval, data calls, and computational power services, such combinations are expected to become scalable foundational architecture forms.
Enterprise and RWA Scenario: Permissions as the Fundamental Expression of Compliance
In enterprise applications and RWA scenarios, the value of ERC-8004 is more reflected in compliance and explainability. Asset management in the real world often requires clear answers to the question: who is authorized to perform which actions under what conditions. Compared to whether the asset itself is on-chain, how permissions are defined and recorded is actually the key to entering the traditional financial system. ERC-8004 does not directly solve compliance issues, but it provides underlying support for the structured expression of permissions, making authorization naturally auditable, traceable, and verifiable. This capability will not immediately change the user experience, but it can significantly reduce the integration cost between Web3 systems and traditional organizations.
From these potential applications, it is evident that ERC-8004 is not a "use-case-driven" standard, but rather a fundamental capability that naturally emerges as the complexity of authorization increases. When on-chain activities evolve from single operations to continuously running system behaviors, a clear and verifiable method of expressing permissions becomes almost an unavoidable choice.
4. The Challenges and Long-Term Value of ERC-8004
Real Challenges
First is the learning cost. Compared to a one-click authorization that completes the process, ERC-8004 introduces a more refined logic for describing permissions. Both developers and users need to re-understand the meaning of authorization within the system. This cognitive cost will take some time for the market to absorb. Second is wallet and infrastructure support. The capabilities of ERC-8004 can only truly take effect when wallets, SDKs, and execution environments understand and cooperate. In the early stage, it is more like an available but not yet universal capability, making it difficult to immediately achieve scale. Lastly is the user experience. If complex authorizations are directly exposed to users, it will only add operational burdens. How to convert a set of structured, machine-verifiable permission rules into an intuitive and acceptable interaction method for ordinary users will directly determine whether ERC-8004 has the potential for large-scale adoption.
ERC-4008 is not solving the present, but the next phase.
Due to these real-world barriers, ERC-8004 is not well-suited as a short-term narrative tool. It will not immediately trigger a surge in user numbers, nor will it directly give rise to new revenue models. ERC-8004 does not aim to make the world faster, but rather to ensure that the system remains controllable, explainable, and verifiable even after it becomes more complex. Its value does not lie in the number of features, but in whether it reserves a sustainable foundation of permissions for future automation, agent collaboration, and institutional participation. In this sense, ERC-8004 is not a standard born for a particular cycle, but one of the underlying capabilities that determine whether Web3 can support complex collaborative relationships.