Audit Trails and Opaque Sponsored Transactions

Gas abstraction via ERC-4337 Account Abstraction and relayers severs the payer's on-chain identity from the transaction. This breaks the most basic forensic tool: tracing the funding source.

• Blind Spot: The final user's address is absent from the tx.origin and msg.sender fields for the fee payment.
• Scale: ~60% of Polygon PoS transactions are now relayed, creating massive opaque volumes.
• Entity: Pimlico, Biconomy, and Stackup dominate this infrastructure layer.

Systems like UniswapX, CowSwap, and Across separate user declaration from execution. A solver network fulfills the intent, obfuscating the execution path.

• Forensic Gap: The on-chain settlement transaction reveals only the solver's address, not the user's original trade logic or route.
• Volume: UniswapX has settled >$10B+ in volume through this opaque model.
• Amplifier: Cross-chain intents via LayerZero or Chainlink CCIP extend the obfuscation across domains.

MEV searchers and builders use private mempools (Flashbots Protect, Titan) and threshold encryption to hide transaction flow until inclusion. Privacy pools like Aztec take this further.

• Blind Spot: Transaction intent and ordering logic disappear from public view pre-execution.
• Scale: ~90%+ of Ethereum blocks are built by builders using private orderflow.
• Consequence: Regulatory 'travel rule' compliance becomes technically impossible for these segments.

The convergence of sponsored tx, intents, and private MEV creates a Compliance Dead Zone where traditional blockchain analytics (Chainalysis, TRM) fail. The audit trail terminates at the infrastructure intermediary.

• Problem: Liability shifts to relayers, solvers, and builders who lack full user KYC.
• Entity Risk: Protocols like Across and UniswapX become de facto regulated entities.
• Outcome: A new stack of ZK-proofs of compliance (e.g., zkKYC) emerges to fill the void, adding overhead.

ERC-4337 and native account abstraction enable sponsored transactions, but they create a black box for compliance. Auditors cannot natively trace who paid for a transaction or why, breaking traditional AML/KYC and fund-flow analysis.

• Breaks Chain-of-Custody: Cannot prove a user's gas was paid by a sanctioned relayer.
• Blinds Risk Engines: Fraud detection systems lose a critical signal (payment source).
• Hinders Enterprise Adoption: Institutions require full audit trails for liability and reporting.

Shift from transaction-level to intent-level logging. Systems like UniswapX and CowSwap already separate declaration from execution. This creates a canonical, on-chain record of user intent before a relayer fulfills it.

• Immutable Intent Proof: The signed user intent is the audit root, separate from execution.
• Clear Attribution: Links final settlement (e.g., on Across or LayerZero) back to the original user request.
• Enables Compliance: Provides the 'who, what, why' for regulators without exposing private mempool data.

A proposed standard for explicit, on-chain sponsorship receipts. When a paymaster (e.g., Biconomy, Stackup) sponsors a tx, it must emit a structured event linking its identity, the user's intent hash, and the fee covered.

• Non-Repudiation: Paymaster cannot later deny sponsoring a specific transaction.
• Real-Time Monitoring: Compliance dashboards can track sponsor exposure and policy violations.
• Fee Transparency: Users and protocols can verify true cost abstraction versus hidden premiums.

Full transparency can leak user intent to searchers, recreating MEV. The solution is selective disclosure via zero-knowledge proofs or trusted relay networks like Flashbots SUAVE. The audit trail is cryptographically verifiable but only revealed to authorized parties.

• ZK-Attestations: Prove compliance (e.g., sponsor is whitelisted) without revealing user data.
• Delegated Auditing: Designate a neutral entity (e.g., Chainalysis Oracle) to receive plaintext logs.
• Preserves UX: Users get seamless sponsored gas without becoming open books for extractors.