The Future of User Sovereignty Confronts Bundler Power

Today's dominant bundlers like Pimlico and Stackup operate as trusted sequencers, creating a single point of failure and censorship. This recreates the MEV and trust issues of traditional block builders.

• Centralized Control: A few entities dictate transaction ordering and inclusion.
• Censorship Vector: Bundlers can blacklist addresses or dApps.
• MEV Extraction: Users lose value to centralized bundler strategies.

Decentralize the bundler role via staking and slashing, similar to Ethereum's validator set. Projects like EigenLayer and AltLayer are pioneering this with restaking mechanisms.

• Staked Security: Bundlers post bond, slashed for misbehavior.
• Leader Election: Random, fair selection for transaction ordering rights.
• Credible Neutrality: Eliminates centralized profit motives from sequencing.

Users have zero visibility into how bundlers set fees or capture value. The lack of a transparent auction (like Ethereum's base fee) leads to rent-seeking and unpredictable costs.

• Hidden Margins: Fees are a black box between gas cost and user payment.
• No Competition: Users cannot shop for execution among bundlers.
• Volatile Pricing: Costs disconnected from actual network state.

Shift from transaction submission to outcome declaration. Users express what they want, not how to do it. Systems like UniswapX and CowSwap prove this model.

• Solver Competition: Bundlers compete on price to fulfill user intents.
• Better Pricing: Solvers absorb volatility and find optimal routes.
• User Sovereignty: Control shifts back to the user's desired outcome.

Bundlers are a critical, monolithic component. If a major bundler's RPC fails, entire ecosystems (like Safe{Wallet} or Biconomy) go offline. This is worse than L1 failure.

• Systemic Risk: Dependence on a few infrastructure providers.
• No Redundancy: Failover mechanisms are manual and slow.
• Upgrade Bottlenecks: Protocol improvements require bundler coordination.

Decompose the bundler into specialized modules: mempool, solver, executor. This enables redundancy and rapid innovation, akin to Celestia's data availability layer.

• Fault Isolation: A failing module doesn't crash the entire system.
• Specialized Providers: Best-in-class solvers for MEV, privacy, etc.
• Permissionless Innovation: New modules can be plugged in without forks.

Bundlers control transaction ordering and inclusion, creating a single point of failure. They can censor users or extract maximal value via MEV, undermining user intent.

• Permissioned Sets: Most networks rely on a small, permissioned bundler set, creating de facto cartels.
• Intent Exploitation: Generalized solvers (like those in UniswapX or CowSwap) can be gamed by bundlers to capture surplus.
• Regulatory Attack Surface: A sanctioned bundler could blacklist entire classes of user operations.

Adapting Proposer-Builder Separation (PBS) from Ethereum's consensus layer to the mempool. Decouples transaction bundling from block building to enforce fair ordering.

• Permissionless Bundling: Projects like EigenLayer and AltLayer are building decentralized sequencer sets for rollups, a model applicable to bundler networks.
• Commit-Reveal Schemes: Force bundlers to commit to a bundle order before seeing the full content, limiting MEV extraction.
• Reputation & Slashing: Staked bundlers face slashing for censorship, aligning incentives with network health.

Paymasters enable sponsored transactions but become trusted third parties. They see all user activity and control financial access, creating a data honeypot and choke point.

• KYC/AML On-Ramp: Regulatory-compliant paymasters (Visa, Stripe) will require identity linking, destroying pseudonymity.
• Single Point of Failure: A dominant paymaster going offline halts entire application ecosystems.
• Profit Motive: Paymasters can extract rent via unfavorable token exchange rates or fees.

Moving paymaster logic into verifiable smart contracts and leveraging atomic swaps to remove intermediary trust.

• ZK-Paymasters: Use zero-knowledge proofs to allow sponsorship without revealing transaction details.
• DEX-Powered Sponsorship: Integrate with DEX aggregators like 1inch for atomic token swaps to pay fees, removing the need for a centralized balance.
• P2P Voucher Systems: Users can receive fee sponsorship from friends or dApps via non-custodial vouchers, decentralizing the sponsor role.

Smart accounts are not portable. Users are trapped by their wallet's chosen infrastructure (bundler, paymaster, signature scheme), limiting choice and creating vendor lock-in.

• Fragmented Liquidity: Staked assets in one account abstraction stack cannot be used to pay fees on another.
• Signature Wars: Competing standards (ERC-4337, EIP-3074, Solana's system) force developers to choose sides, fracturing the ecosystem.
• Upgrade Cabals: Wallet developers control account upgradeability, potentially forcing unwanted changes.

Building account abstraction layers that are chain-agnostic and governed by open, modular standards to ensure user mobility.

• Chain-Agnostic ERC-4337: Implementations using interoperability protocols like LayerZero and Axelar to unify accounts across ecosystems.
• Account Abstraction Hubs: Dedicated chains (e.g., Fuel) acting as neutral settlement layers for user operations across all rollups.
• Community-Governed Upgrades: Moving upgrade control to decentralized, multi-sig or DAO-governed modules to prevent unilateral changes.

Bundlers are the new validators, deciding transaction order and inclusion. A dominant client like Pimlico or Stackup could extract MEV and censor users, replicating L1 miner power dynamics. The PBS (Proposer-Builder Separation) model from Ethereum is not natively enforced in AA.

• Centralization Risk: Top 3 bundlers could control >60% of AA volume.
• Censorship Surface: A compliant bundler could blacklist sanctioned smart accounts.
• MEV Extraction: Transaction ordering becomes a privatized, opaque market.

Sponsored gas via Paymasters is a killer feature, but creates dependency. A dominant Paymaster like Biconomy could impose rent-seeking fees or enforce policy rules (e.g., blocking DApp access). This centralizes the 'who pays' decision, contradicting permissionless ideals.

• Economic Capture: Paymaster could charge 10-30% fees once network effects are locked.
• Gatekeeping Power: Can deny service based on token, DApp, or user profile.
• Fragmentation: Competing paymaster standards break interoperability.

EOAs have one key; smart accounts have infinite logic. Each new feature (social recovery, session keys, multi-chain ops) expands the attack surface. Auditing a Safe{Wallet} module is harder than verifying a seed phrase. Mass adoption means mass exploitation targets.

• Attack Surface: Every 4337-compliant wallet is a unique, complex smart contract.
• Upgrade Risks: Admin keys for account logic could be compromised.
• Standardization Lag: Security best practices will trail innovation, leading to $100M+ hacks.

AA standards (ERC-4337) exist, but each L2 implements its own bundler/paymaster ecosystem. A user's Arbitrum AA wallet may not work seamlessly on Optimism or zkSync. This recreates the multi-chain wallet problem AA promised to solve, with bundlers as the new chain-specific gatekeepers.

• Interop Failure: Cross-chain user ops require trusted relayers, adding latency and cost.
• Balkanized Liquidity: Paymaster gas tanks are siloed per chain.
• Developer Overhead: Must integrate with each L2's AA stack (AltLayer, Polygon zkEVM).

The very programmability that enables recovery also enables compliance-enforced logic. A regulated Paymaster could require identity attestation for gas sponsorship. Governments could mandate 'licensed smart accounts', baking surveillance into the wallet layer via ZK-proofs of personhood or worse.

• Sovereignty Erosion: 'Account' becomes a permissioned service, not a primitive.
• Censorship Code: Blacklist logic becomes a standard module.
• Privacy Loss: Social recovery exposes social graphs.

Bundlers and Paymasters need profitable business models. If gas sponsorship dries up or MEV becomes less lucrative, the service layer collapses. Unlike L1 validators secured by block rewards, AA infrastructure relies on volatile, competitive service fees. This could lead to consolidation or abandonment.

• Fee Market Volatility: Bundler margins could be <1%, making decentralization uneconomic.
• Subsidy Dependency: Current growth is fueled by VC-subsidized gas (see Biconomy).
• Centralization Pressure: Only large, vertically-integrated entities (e.g., Coinbase's Smart Wallet) will survive thin margins.

Bundlers in ERC-4337 and SUAVE-like systems control transaction ordering and MEV extraction, creating a centralization vector. Their power to censor or front-run is the core conflict with user sovereignty.

• Control Point: They decide which UserOperations get into a block.
• MEV Capture: They can extract value from user intent via arbitrage or sandwiching.
• Risk: A few dominant players (e.g., Stackup, Alchemy, Pimlico) could form an oligopoly.

Frameworks like UniswapX, CowSwap, and Across shift power from transaction executors (bundlers) to solvers competing on fulfillment. Users submit what they want, not how to do it.

• Sovereignty Benefit: User gets optimal outcome; solvers bear execution risk.
• Competitive Landscape: Prevents bundler monopolies by introducing solver markets.
• Trade-off: Introduces complexity in solver trust and attestation.

Mitigate bundler power by designing systems that require verifiable proofs of correct execution. Use ZK proofs for privacy and validity, or optimistic schemes with fraud proofs.

• ZK Bundlers: Projects like Polygon zkEVM and zkSync demonstrate provable batch processing.
• SUAVE's Vision: Aims for a decentralized block builder network with commit-reveal schemes.
• Builder Mandate: Architect so that malicious bundler behavior is economically punishable or cryptographically detectable.

Cross-chain intent execution via LayerZero, Axelar, or Wormhole amplifies bundler risk. A sovereign user's cross-chain swap depends on multiple, opaque relayer/bundler networks.

• Attack Surface: Each hop is a potential censorship or MEV extraction point.
• Solution Path: Standardize on shared security models or use light-client bridges for verification.
• Critical Design: Never let the bridging primitive become the single point of failure for user intent.

A perfectly decentralized technical stack is useless if economic incentives favor centralization. Design staking, slashing, and fee markets that actively punish cartel formation among bundlers or solvers.

• Stake-for-Access: Require bundlers to stake, slash for censorship.
• Proposer-Builder Separation (PBS): Adopt Ethereum's PBS philosophy to separate block building from proposal.
• Real Data: Model scenarios where a cartel controls >33% of the market and ensure your incentives break it.

The final defense is user-controlled software. Wallets like Safe, Rabby, and Privy must evolve beyond signers to become intent orchestrators, simulating outcomes and selecting bundlers/solvers based on reputation and proof.

• Critical Function: Pre-transaction simulation and bundler reputation scoring.
• User Empowerment: Allow users to set hard constraints (max cost, privacy requirements).
• Build Here: The wallet/agent layer is the most direct point to architect for sovereignty.