Why Smart Account Adoption is a Governance Problem

Smart accounts need gas sponsorship (paymasters) for seamless UX, but DAO treasuries can't approve open-ended gas subsidies. This creates a chicken-and-egg problem: no users without sponsorship, no sponsorship without users.

• Stalled Proposals: Proposals to fund paymasters for AAVE or Uniswap get bogged down in liability debates.
• Treasury Risk: DAOs fear uncapped, non-revenue gas commitments from their $100M+ treasuries.

Migrating core protocol functions (e.g., permit2 for signatures) to be smart account-native requires a hard governance consensus most teams avoid.

• Vendor Lock-In: Entrenched infrastructure like MetaMask's dominance creates resistance to new signature standards like ERC-4337.
• Coordination Overhead: Upgrading a $10B+ TVL protocol is a multi-month governance marathon, delaying critical UX improvements.

DAO multisigs are themselves Externally Owned Accounts (EOAs), making them structurally incapable of managing smart account risk models like session keys or social recovery.

• Blind Spots: Governance can't natively audit complex multi-sig or time-locked logic within a smart account.
• Liability Shift: Delegating security to Safe{Wallet} or Argent creates opaque dependency layers, a legal nightmare for decentralized governance.

Bundlers are the gatekeepers of the ERC-4337 user operation mempool. Without a credible, decentralized bundler network, the system is vulnerable to censorship and MEV extraction, creating a massive governance risk for protocols.

• Key Risk: Centralized bundlers can front-run or censor transactions.
• Key Solution: Projects like Ethereum Foundation's Pimlico and Stackup are building infrastructure to decentralize this layer, but economic incentives remain nascent.

Paymasters allow sponsors (dApps, protocols) to pay gas fees for users. This is the primary adoption lever, but it's a governance nightmare of subsidy design and fraud detection.

• Key Problem: Who pays, for how long, and how do you prevent Sybil attacks?
• Key Players: Biconomy, Candide, and ZeroDev are building programmable paymaster policies, turning gas sponsorship into a strategic growth tool.

Smart account wallet providers (Safe, Argent, Ambire) aren't just UI builders. They curate bundler and paymaster networks, manage upgrade keys, and set security policies. Their business models dictate the user experience and security trade-offs for millions.

• Key Tension: Profit via service fees vs. user sovereignty.
• Key Metric: Safe{Core} kit and its Protocol Guild model attempt to align ecosystem incentives, but vendor lock-in is a real threat.

Networks like Optimism, Arbitrum, and zkSync have the capital and motivation to bootstrap smart accounts. They can fund paymaster pools, run canonical bundlers, and embed AA natively to drive user growth and lock-in.

• Key Lever: Native account abstraction at the L2 VM level (e.g., zkSync Era).
• Key Goal: Capture the next 100M users by making onboarding frictionless, turning L2s into walled gardens with better UX.