Account-based chains store a balance per address and increment a nonce with each transaction from it. It reads like a bank ledger and makes smart contract state far simpler to reason about than the utxo model.
The tradeoffs are practical. Transactions from one address must execute in nonce order, so a single stuck transaction blocks everything behind it. Balances are also easier to link across activity, which reduces privacy.
Example: you send three transactions with nonces 7, 8 and 9. If nonce 7 is underpriced and stalls in the mempool, 8 and 9 cannot confirm at all, no matter what fee they carry, until 7 confirms or is replaced.
Related: utxo