An Automated Smart Contract Framework for

NFT-based Warranty Management System with

Account Abstraction
Sai Sambhab Chaini1 , Lopamudra Hota1 , Biraja Prasad Nayak1 ,
Arun Kumar1*
1* Departmentof Computer Science and Egineering, national Institute of
Technology Rourkela, Sector-2, Rourkela, 769008, Odisha, India.

*Corresponding author(s). E-mail(s): [email protected];

Contributing authors: [email protected]; [email protected];
[email protected];

Abstract
Current warranty systems for businesses with diverse products or extensive cus-
tomer bases are bogged down by complexity. From the business perspective,
warranties establish trust among customers and attract new sales. Neverthe-
less, various challenges are associated with the issuance, servicing, verification
of warranties, and handling expiry. Businesses that offer a wide range of prod-
ucts or have a large customer base may encounter specific difficulties in this
regard. This research work presents an innovative, blockchain-powered solution
to mitigate the above-stated issues. Each product is assigned an unique and
secure warranty in the form of a Non-Fungible Token (NFT). This NFT tracks
ownership and expiry directly on the blockchain, guaranteeing its validity and
eliminating potential fraud. To ensure a user-friendly experience, account abstrac-
tion simplifies interaction with the system and reduces transaction fees. Finally,
Gelato Ops automates the secure burning of expired NFTs upon reaching their
designated date. This system streamlines warranty management for businesses,
enhances trust through automation, and leverages the security and immutability
of blockchain technology.

Keywords: NFT Warranty, Smart Contract Automation, Blockchain, Account

Abstraction, verification of warranties

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1 Introduction
According to a forecast by eMarketer [1], global retail e-commerce sales in the year
2022 exceeded an impressive amount of 4.9 trillion USD, which is an increase from the
previous year’s figure of 4.2 trillion USD. This signifies a compound annual growth
rate (CAGR) of 10.2% as compared to a 2.1% CAGR for global offline retail sales.
According to Statista, electronics accounted for 30.6% of total global online retail sales
in 2023 [2]. This is the largest share of any product category, followed by apparel and
fashion (22.2%) and home and garden (17.9%) [2]. Nevertheless, a difficulty emerges in
the dissemination of warranties for these commodities, as it is imperative to authen-
ticate the possessor and the expiration of the warranty. Presently, there exist two
classifications of guarantees: first, physical warranties that necessitate documentation,
are vulnerable to manipulation, and are not transferable. Second, digital warranties
are preserved in a centralized system and do not ensure comprehensive transfers of
ownership. NFTs began gaining massive attraction with CryptoPunks in October 2017
due to the most significant art sale in history by Mike Winkelmann, a digital artist
who sold his work for nearly $70 million [3]. The art industry has commercialized and
popularized NFTs, and the volume and value of NFT transactions are rapidly growing
[3]. NFT-based warranties have the ability to offer a resolution to all of these afore-
mentioned challenges. The issuance of NFT-based warranties can be executed with
swiftness and ease.
Once an NFT warranty has been minted, it can be transferred to the customer
without any difficulty. Moreover, NFT-based warranties can streamline the proce-
dure of warranty servicing. Furthermore, NFT-based warranties possess the added
benefit of being resistant to tampering and easily verifiable. NFT-based warranties
can revolutionize the warranty industry by making it more secure, transparent, and
efficient. They offer benefits like reduced fraud, improved customer satisfaction, and
increased sales. Additionally, they can enhance sustainability by reducing paper waste
and conserving resources. Previous scholarly works pertaining to NFT-based sys-
tems offer illustrations of various methodologies for utilizing NFTs, such as the car
rental paradigm[4], the house rent resolver[5], and the renting of playing cards[4].
Furthermore, these NFTs prove beneficial in addressing challenges necessitating the
verification of assets and their proprietors.

1.1 Motivation
The act of issuing warranties presents a dilemma that is anticipated to expand expo-
nentially in the forthcoming years due to the forecasts on retail sales, an expanding
customer base, and the assortment of items dispatched. NFTs will prove to be a
valuable approach in addressing the challenge of issuing, verifying, and disposing of
warranties whenever the need arises.

1.2 Objectives
• To create a NFT-based Warranty Issue System for implementation by various man-
ufacturers and retail sellers in order to distribute NFTs upon sale of warranted
items.

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• To provide an algorithm to verify and authenticate valid owners of the warranties.
• To automate the burning process of NFT for expired warranties.
• To implement account abstraction to decrease gas cost on user.

2 Literature Review
The authors in [6] define the characteristics of the OpenSea NFT marketplace, which
is one of the largest platforms for trading NFTs. The researchers collected and ana-
lyzed sales data from January 2019 to December 2021, focusing on user behaviour,
economic trends, and network properties. Their research concludes that a small subset
of buyers and sellers, known as heavy-hitters, dominated the marketplace. They have
also observed a shift in sales from gaming-related NFTs to art and collectibles. The
findings contribute to a better understanding of the NFT market and its development.
The authors suggest that further research is needed to explore market trends within
specific NFT categories and across different platforms. On the other hand, the authors
in [3] offer a comprehensive examination of the potential influence of NFTs within the
realm of electronic commerce. The researchers systematically collected and organized
research papers, in addition to conducting a survey aimed at gauging public perspec-
tives on NFTs. The outcomes suggest that the majority of respondents hold a positive
view on the potential benefits of NFTs for e-commerce, citing various factors such as
authentication, trust, customer value, commodity, security, and proof of ownership.
The article emphasizes the necessity for industry-wide security standards and further
research to address concerns pertaining to environmental impact, security, fraud, and
intellectual property rights. Figure 1 and Figure 2 present the familiarity with digital
assets and familiarity ratings with digital assets among users respectively.

Fig. 1 Familiarity with Digital Assets[3].

The authors in [4] focus on Ethereum Improvement Proposal (EIP) ERC-4519,

which aims to standardize the definition of NFTs on the Ethereum blockchain. NFTs
are unique assets that can generate their own Ethereum addresses[4] and have different
owners. The article illuminates the benefits of ERC-4519 in diverse scenarios, encom-
passing tangible resources such as IoT devices. The Ethereum blockchain is explained

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Fig. 2 Familiarity ratings with digital assets[3].

as a public blockchain that allows for the execution of smart contracts[4]. The benefits
of ERC-4519 in diverse utilization scenarios are illustrated. Instances encompass the
application of ERC-4519 non-fungible tokens in the realm of the digital art market,
where individuals may grant or lease their creative masterpieces. In music platforms,
the melodies can be vented and their permits can be shared temporarily.
The authors in [5] present a proof of concept for renting and selling smart homes
using blockchain technology, specifically the Ethereum network. The study explores
the features of ERC-4519 NFTs and discusses their application in the rental process.
By deploying a smart contract on the Goerli Testnet and utilizing a Pycom Wipy
3.0 device as the smart home gateway[5], the researchers successfully demonstrated
the feasibility of their proposed rental solution. Overall, the research work presents a
promising solution for renting and selling smart homes using blockchain technology.
The proposed system has the potential to improve the security, transparency, and
efficiency of smart home rental transactions.
The research work in [7] put forward a proposal for a warranty system that is
based on blockchain technology and utilizes NFTs as a means to tackle the chal-
lenges associated with traditional physical and digital warranties. The proposed system
generates product warranties that possess unique token IDs, with the product and
warranty details being stored in the metadata. Additionally, the image and metadata
are uploaded to the Inter Planetary File System (IPFS) for permanent storage on
the blockchain. This ensures that the warranties are resistant to tampering, can be
verified, and transferred, and their ownership can be tracked. The system offers var-
ious advantages, such as protection against physical damage, evidence of ownership,
authenticity, the ability to trace the history of the product, and simplified transfer of
ownership in the event of resale.
The authors in [8] discuss the significance of safeguarding NFTs and digital art-
works in the long run. It delves into the existing body of literature on blockchain
technology in the management of art and heritage, with a specific focus on NFT-based
digital art.
The research work presented in [9] [10] explores the integration of EIP-4337 as a
foundational standard for account abstraction (AA) in Ethereum’s Splurge phase, aim-
ing to enhance user accessibility and expand DApp functionalities. The study delves

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into the operating mechanisms of account abstraction, advancements in accounts,
wallets, and standards related to its development, and conducts a preliminary secu-
rity evaluation. The paper recognizes the potential security enhancements achieved
through AA updates and provides an in-depth analysis of security vulnerabilities and
their mitigation with the adoption of account abstraction. The analysis covers various
Ethereum account-related vulnerabilities and demonstrates that account abstraction
can mitigate these issues by introducing a set of security enhancements. The research
work provides a comprehensive overview and evaluation of the concept of account
abstraction and its potential impact on Ethereum’s ecosystem. [9]

2.1 Research Gap

Previous research conducted on NFT-based systems works with standards are not
widespread, thereby rendering the adoption challenging with exceedingly limited doc-
umentation and support. Certain systems also employ centralized databases, which
undermine the fundamental nature of Decentralized Applications. Additionally, the
utilization of automation is exceedingly sparse necessitating further research. The
scalability and security concerns are also matters that promote the use of account
abstraction to reduce cost to end users.

3 Methodology
3.1 System Environments
For the proposed methodology, it is essential that both the seller and buyer pos-
sess a Metamask wallet[14] in order to securely store their respective accounts. These
accounts serve as a means for issuing and receiving warranties. Additionally, the
buyer’s wallet address plays a pivotal role in the authentication process. Furthermore,
a resolver contract must be uploaded to Gelato Ops in order to effectively address
any warranties that have surpassed their expiry dates. Gelato Network is web3’s
automation network, enabling developers to automate & relay arbitrary smart contract
executions on and across all EVM-based compatible blockchains such as Ethereum[15].
Also, a Paymaster has to be set as an entry point into the Warranty Manager con-
tract so that the total gas costs can be paid by the Paymaster contract rather than
the user accounts. Therefore, the user needs to just sign a transaction and do not
need to pay the gas fees for it. Paymaster and Account Abstraction are set up using
Alchemy’s Account Abstraction Infrastructure. The prerequisites for minting the NFT
encompass the following elements: the wallet address of the seller and buyer, a unique
product ID, the URI of the product image, the time of creation, and the expiration
time. Technologies used are: React, Gelato Network, Gelato Ops, Alchemy, Polygon
Testnet, Solidity, IPFS.

3.2 Proposed Approach

The objective of this proposed methodology is to establish a warranty distribution
system based on non-fungible tokens (NFTs) that makes use of web3 automation.
The use of GelatoOps automates the process of destroying NFTs along with Account

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Fig. 3 Schematic Representation of the proposed NFT Warranty system

Abstraction to make sure that gas fees are sponsored for the users for a better user
interface. This ensures that expired NFTs are transferred to an account that cannot
be spent, thereby rendering them useless and preventing any retrieval. The verification
of the warranty is achieved by utilizing the information stored in the metadata of the
NFT.

3.2.1 Creating a new NFT Warranty

To begin, the seller generates a new NFT Warranty on their Dashboard by provid-
ing the seller’s address, Expiry Date, and Product ID. Then, the bundler contacts the
Paymaster to validate the transaction and after validation forwards the user operation
to Entry Point Contract. The Seller Address and Product ID are combined to form a
unique identifier for the specific warranty, which is then used to associate it with the
various products sold by the seller and the corresponding warranties issued for each.
Next, a verifyHash is generated, which is a hash produced through the utilization of
the keccak 256 hashing mechanism. This hashing mechanism encodes both the buyer
address and the productId simultaneously. This hash is subsequently employed to
authenticate the specific seller who possesses the corresponding warranty. The meta-
data of the NFT Warranty is then amended to encompass all the essential information,
including the verifyHash and ID.

3.2.2 Verifying and Claiming Warranty

The NFTs are displayed in the buyer’s Dashboard as a Pending Warranty that requires
verification and must be claimed by the Buyer. To authenticate ownership of a specific
warranty, a hash is once again generated using the keccak 256 hashing functions. The
input for this process includes the user address and the product ID of the purchased

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Fig. 4 Sequence Diagram of proposed NFT Warranty System

item. This resulting hash is compared with the verifyHash variable found in the NFTs
metadata. If these hashes are a match, the owner’s identity is confirmed, granting
them the ability to claim and create the NFT. Consequently, the NFT Warranty is
activated, enabling the buyer to utilize any services offered under the warranty.

3.2.3 Expiry of Warranty

The burn function is an uncomplicated function that dispatches the non-fungible token
(NFT) to a wallet that cannot be spent and is inaccessible to any individual. In
addition, the NFT Warranty is designated as Expired. When the current block time

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Fig. 5 User Operations in Account Abstraction

Fig. 6 Read Operations in Contract

surpasses the expiry time linked to the warranty, a Gelato Ops-uploaded NFT Resolver
contract triggers the burn function for a specific warranty ID. However, the seller
retains the ability to peruse the preceding data.

3.2.4 Sponsoring Gas Fees using Paymaster

All user operations that require a gas fee to be paid are first validated by the bundler
with the paymaster. So the user just signs the transaction then the paymaster signs
the transaction with the gas fees and it is then forwarded to the entry point contract
that executes the user operation using the NFT Warranty Contract.
Figure 3 represents the flow diagram of the proposed system and Figure 4 shows the
sequence diagram of the proposed NFT Warranty System and represents the seller and

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Fig. 7 Write Operations in Contract

Table 1 Requirements of the proposed system

S. no Software Version
1. Solidity 0.8.0
2. React 18.1.0
3. React Router 6.3.0
4. Web3.js 1.7.3
5. Tailwind CSS 3.3.1
6. IPFS 56.0.1
7. Gelato Ops 2.0.0
8. Ethereum 1.12.2
9. Polygon 4.4.5

buyer interaction with the proposed system. User Operations in Account Abstraction
is represented in Figure 5.

4 Results and Analysis

4.1 Requirements
Table I lists all software and frameworks required for the proposed system.

4.2 Results
Figure 6 and Figure 7 show the read and write functions of the deployed and verified
smart contracts on Polygon Mumbai [14] Testnet. By implementing Account Abstrac-
tion we have successfully sponsored the gas fees of all write operations. This has

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 Table 2 Gas fees paid by users

Gas Options Traditional Proposed

Systems System
Low 0.0005545 ETH 0 ETH
Market 0.0007555 ETH 0 ETH
Aggressive 0.0009564 ETH 0 ETH

decreased the gas cost on the user from 0.0007555 ETH per warranty created to zero
wei per warranty thus decreasing the burden on users and acting as an incentive for
users to use the proposed system over other traditional systems.
Table II represents the difference in gas paid by the users while using different gas
options.
However, as there is a single Entry Point Contract and one Paymaster, it increases the
time taken for a transaction to be included in a block. Even though the time taken is
not significantly large for a small number of users the effect is significantly large for a
large number of users.
To overcome this bottleneck the proposed approach has a Bundler to bundle user
ops to decrease the time required to complete a transaction by bundling some user
operations in the mempool and sending them for validation and execution by the
handleOps function in the Entry Point Contract.

5 Conclusion
The proposed warranty system employs an innovative methodology that utilizes NFTs,
web3 automation, and account abstraction to enhance the security, transparency, effec-
tiveness, and convenience of warranties for both purchasers and vendors. The system
operates by generating an NFT Warranty for each item, subsequently associating it
with the purchaser’s wallet address. The NFT Warranty encompasses all pertinent
warranty details, such as the expiration date and the terms and conditions. Upon the
expiration of the warranty, a Gelato Ops-uploaded NFT Resolver contract automati-
cally eliminates the NFT Warranty, guaranteeing that it cannot be reused or redeemed.
The proposed framework is substantiated by preceding investigations on the utiliza-
tion of NFTs for warranties and the potential advantages of NFTs for e-commerce.
Nonetheless, it is imperative to acknowledge that there are certain difficulties linked
to NFTs, such as the danger of misplacement. It is crucial to implement suitable pre-
cautions to safeguard NFTs and ensure their enduring conservation.
In future, we plan to further address certain pertaining issues. One area of concentra-
tion pertains to the integration of the mechanism with e-commerce platforms, thereby
simplifying the process of purchasing products along with warranties for purchasers.
Another area of concentration is the development of a mobile application for the mech-
anism, facilitating users in managing their warranties while on the move. In general,
the suggested mechanism holds the potential to substantially enhance the warranty
encounter for both purchasers and vendors

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