The Fusaka upgrade arrived on December 3, 2025, bringing one of the most significant changes to Ethereum wallet infrastructure in years. Among its improvements, EIP-7951 stands out as a genuine milestone, but it's not quite the death knell for seed phrases that some are predicting. If anything, we're entering an era that demands more sophisticated approaches to wallet security.
What is EIP-7951?
EIP-7951 introduces a precompiled contract for the P-256 elliptic curve (also called secp256r1), a cryptographic standard that's already deeply embedded in the devices you use every day. Apple's Secure Enclave, Android's Keystore, Yubikeys, and the WebAuthn standard that powers passkeys all rely on P-256 for authentication and protecting sensitive data like FaceID and TouchID.
Here's the problem EIP-7951 solves: Ethereum natively uses a different cryptographic curve called secp256k1. Until now, verifying P-256 signatures on Ethereum required smart contracts that cost hundreds of thousands to sometimes millions in gas per signature. At current gas prices, that could mean $50-100+ just to sign a single transaction.
This is where precompiles come in. A precompile is a special contract at a fixed address that executes native code rather than EVM bytecode, providing efficient implementations of computationally expensive operations. For example: BN256, an elliptic curve used commonly for zkSNARKs, has a precompile. The p256 precompile introduced in EIP-7951 slashes this to roughly 6,900 gas. That's about a 50x reduction, bringing costs down to a few cents and making it much more economically viable to transact using the secure hardware in your consumer device.
The Secure Enclave Advantage
With P-256 precompiles now live on Ethereum mainnet (and already deployed across major Layer 2s like Optimism, Arbitrum, and Polygon), you can transform the secure hardware you already own into a crypto wallet. Your iPhone, Android device, or even a $50 Yubikey can now function as a wallet with security guarantees comparable to, and in some ways superior to, dedicated hardware wallets.
The user experience mirrors what you're already comfortable with: scan your face, tap your fingerprint, and you've authorized a transaction. No seed phrases to write down, no hardware wallet to carry, no anxiety about whether you stored those 24 words safely.
The Interoperability Tradeoff
But here's where things get complicated: engineering is always about tradeoffs, and secure enclaves come with fundamental constraints that no software update can fix.
Your keys are trapped inside your device. By design, you cannot export the private key from a Secure Enclave, Android Keystore, or Yubikey. That's actually the security feature: if the key can never leave the hardware, it can never be stolen remotely. But it also means that if you lose your phone, break it, or simply want to use a different device, that specific key is gone forever.
There's no universal backup standard. Traditional seed phrases follow BIP-39, a widely adopted standard that lets you restore the same wallet on any compatible software or hardware. Secure enclave keys have no equivalent. Each device generates its own unique key that exists nowhere else in the universe.
Cross-chain management gets complicated. With a single seed phrase, you can derive keys for Bitcoin, Ethereum, Solana, and dozens of other chains through standardized derivation paths (BIP-32/44). Each chain gets its own address, but they all trace back to one backup. Secure enclaves don't support this hierarchical derivation—you need separate keys per chain with no unified backup.
This doesn't mean P-256 wallets are doomed. Smart contract wallets offer elegant solutions through multi-key setups (store keys on multiple devices with shared account access), social recovery mechanisms (trusted guardians can help restore access), and hybrid architectures that combine enclave security with traditional backups. But these add complexity—and they all ultimately need something to recover from if your primary device is lost.
Why Traditional Seed Phrase Wallets Will Persist
Despite the excitement around passkey-based wallets, traditional externally owned accounts (EOAs) controlled by seed phrases will continue serving important use cases:
Cross-chain portfolio management. Active DeFi users operating across Ethereum, Arbitrum, Optimism, Base, Solana, and Bitcoin need unified backup strategies. One seed phrase can secure positions across all these chains. Secure enclaves require separate key management for each.
Long-term cold storage. For generational wealth preservation, nothing beats a properly secured seed phrase stored in multiple physical locations. No hardware dependencies, no software updates required, no company that might go out of business. The cryptographic math will work in 50 years the same as today.
Cost and simplicity. For basic operations, EOAs still cost less gas than smart contract wallet transactions. And there's something to be said for battle-tested simplicity—EOAs have worked reliably since Ethereum's launch.
Where Keypo Fits In
This is where hardware-trusted seed phrase backup systems like Keypo remain critically relevant—perhaps more so than ever.
The emerging wallet landscape isn't replacing seed phrases with secure enclaves. It's adding secure enclaves as another option in an increasingly complex toolkit. Many users will end up with hybrid setups, and they'll need secure infrastructure to manage both approaches.
Backup for hybrid wallet architectures. Smart contract wallets that use passkeys for daily transactions often include a "backup key" or "recovery key" as a failsafe. That recovery key needs to live somewhere secure. Storing it in a password manager creates a single point of failure. Writing it on paper creates physical security risks. Hardware-backed storage provides the security guarantees these backup keys deserve.
Cross-device portability solutions. When you upgrade phones, your secure enclave keys don't come with you. Users need a secure way to either transfer wallet control to new device keys or recover from backup keys. This is precisely the use case Keypo addresses.
Bridge between wallet generations. As users experiment with new wallet architectures—some pure passkey, some traditional EOA, some hybrid—they need secure ways to manage credentials across all of them. The seed phrases, recovery keys, and backup credentials from various wallet types all need enterprise-grade protection.
Insurance against platform risk. Apple could change Secure Enclave policies. Android vendors could drop support. Embedded wallet providers could shut down (remember how many crypto companies have disappeared?). Hardware-backed seed phrase storage provides sovereignty that doesn't depend on any platform continuing to operate.
Institutional compliance bridge. Organizations adopting modern wallet infrastructure still need cold storage, segregated backups, and auditable recovery procedures. Keypo provides the secure backup layer that lets institutions benefit from passkey convenience while satisfying regulatory requirements.
The Road Ahead
The next 1-3 years will bring an explosion of wallet innovation. Account abstraction (EIP-4337) is now baseline infrastructure—every major wallet provider supports it. EIP-7702, which went live in May 2025, lets existing EOA wallets upgrade to smart contract functionality without changing addresses. Passkey authentication is becoming the default for consumer applications.
We'll see:
* Pure passkey wallets for users who prioritize convenience and don't need cross-device portability * Hybrid solutions combining passkey daily drivers with hardware wallet or seed phrase backups * Traditional EOA setups for DeFi power users, institutions, and privacy-focused individuals * Multi-signature configurations for teams, DAOs, and family wealth management * Chain-abstracted accounts that work across multiple networks with unified identity
Each will have its place. The market is segmenting, not consolidating.
Conclusion
The future of Ethereum wallets isn't about choosing between seed phrases and secure enclaves—it's about having the right tools to securely manage both, matched to your specific needs. EIP-7951 makes passkey wallets viable at scale, but it doesn't solve device portability, platform dependency, cross-chain management, or institutional compliance requirements.
For many users, the ideal setup will combine the daily convenience of biometric authentication with the recovery assurance of properly secured backup credentials. That's the future Keypo is building for—not betting against secure enclaves, but providing the secure backup infrastructure that makes the entire wallet ecosystem more resilient.
The seed phrase isn't dying. It's becoming one essential component in a more sophisticated security architecture. And securing that component has never been more important.