Use a contract method to provide virtual functions which can generate a human-readable description at the same time as the machine-readable bytecode, allowing the user to agree to the human-readable component in a UI while the machine can execute the bytecode once accepted.
When using an Ethereum Wallet (e.g. MetaMask, Clef, Hardware Wallets) users must accept a transaction before it can be submitted (or the user may decline).
Due to the complexity of Ethereum transactions, wallets are very limited in their ability to provide insight into the effects of a transaction that the user is approving; outside special-cased support for common transactions such as ERC20 transfers, this often amounts to asking the user to sign an opaque blob of binary data.
This EIP presents a method for dapp developers to enable a more comfortable user experience by providing wallets with a means to generate a better description about what the contract claims will happen.
It does not address malicious contracts which wish to lie, it only addresses honest contracts that want to make their user's life better. We believe that this is a reasonable security model, as transaction descriptions can be audited at the same time as contract code, allowing auditors and code reviewers to check that transaction descriptions are accurate as part of their review.
The description (a string) and the matching execcode (bytecode) are generated simultaneously by evaluating the method on a contract:
The human-readable description can be shown in any client which supports user interaction for approval, while the execcode is the data that should be included in a transaction to the contract to perform that operation.
The method must be executable in a static context, (i.e. any side effects, such as logX, sstore, etc.), including through indirect calls may be ignored.
During evaluation, the ADDRESS (i.e. to), CALLER (i.e. from), VALUE,
and GASPRICE must be the same as the values for the transaction being
described, so that the code generating the description can rely on them.
When executing the bytecode, best efforts should be made to ensure BLOCKHASH,
NUMBER, TIMESTAMP and DIFFICULTY match the "latest" block. The
COINBASE should be the zero address.
The method may revert, in which case the signing must be aborted.
There have been many attempts to solve this problem, many of which attempt to examine the encoded transaction data or message data directly.
In many cases, the information that would be necessary for a meaningful description is not present in the final encoded transaction data or message data.
Instead this EIP uses an indirect description of the data.
For example, the commit(bytes32) method of ENS places a commitment
hash on-chain. The hash contains the blinded name and address;
since the name is blinded, the encoded data (i.e. the hash) no longer
contains the original values and is insufficient to access the necessary
values to be included in a description.
By instead describing the commitment indirectly (with the original information
intact: NAME, ADDRESS and SECRET) a meaningful description can be computed
(e.g. "commit to NAME for ADDRESS (with SECRET)") and the matching data can
be computed (i.e. commit(hash(name, owner, secret))).
This technique of blinded data will become much more popular with L2 solutions, which use blinding not necessarily for privacy, but for compression.
To prevent signed data being used across contracts, the contract address
is entanlged into both the transaction implicitly via the to field.
NatSpec and company are a class of more complex languages that attempt to describe the encoded data directly. Because of the language complexity they often end up being quite large requiring entire runtime environments with ample processing power and memory, as well as additional sandboxing to reduce security concerns. One goal of this is to reduce the complexity to something that could execute on hardware wallets and other simple wallets. These also describe the data directly, which in many cases (such as blinded data), cannot adequately describe the data at all
Custom Languages; due to the complexity of Ethereum transactions, any language used would require a lot of expressiveness and re-inventing the wheel. The EVM already exists (it may not be ideal), but it is there and can handle everything necessary.
Format Strings (e.g. Trustless Signing UI Protocol; format strings can only operate on the class of regular languages, which in many cases is insufficient to describe an Ethereum transaction. This was an issue quite often during early attempts at solving this problem.
The signTypedData EIP-712 has many parallels to what this EIP aims to solve
This does not affect backwards compatibility.
I will add deployed examples by address and chain ID.
Wallets must be careful when displaying text provided by contracts and proper efforts must be taken to sanitize it, for example, be sure to consider:
<span style="display:none">not-</span>ricmoo.eth or  ricmoo.eth, which if rendered without care would appear as ricmoo.eth, which it is not"), formatting (\n (new line), \f (form feed), \t (tab), any of many non-standard whitespaces), back-slassh (\)Copyright and related rights waived via CC0.