Why ERC-4337's Dominance Is Not Inevitable

ERC-4337's UserOperation mempool is permissionless in theory, but economic incentives and MEV will centralize bundling power. This recreates the validator centralization problem at the application layer.

• No native PBS: No Proposer-Builder Separation, leading to vertical integration and extractive bundling.
• Sticky Client Infrastructure: Bundlers require complex, stateful nodes, creating high barriers to entry.
• MEV Capture: The most profitable bundlers will dominate, similar to today's block builders.

L1/L2 native AA (e.g., zkSync, Starknet, Solana) bypasses the 4337 middleware entirely. This offers superior performance and simplicity by baking smart account logic into the protocol consensus.

• Zero Gas Overhead: No need for a separate UserOperation mempool or bundler network.
• Atomic Composability: Native operations enable seamless, single-transaction interactions with DeFi protocols.
• Vendor Lock-in Risk: Creates ecosystem silos, but offers a compelling user experience.

Systems like UniswapX, CowSwap, and Across solve for user intent, not transaction execution. This paradigm shift makes the smart account itself less critical, moving complexity to solvers and fillers.

• Declarative Model: Users specify what they want, not how to do it.
• Cross-Chain Native: Intents are naturally chain-agnostic, unlike 4337's Ethereum-centric design.
• Solver Competition: Drives better prices and execution via layerzero-style messaging.

Solana's protocol-level design makes ERC-4337 irrelevant. Its single global state and low fees enable native account abstraction without a separate mempool or bundler network.

• No Bundler Overhead: Transactions are native objects, eliminating a critical failure point and cost layer.
• Sub-Second Finality: Enables ~400ms UX for social recovery or batched ops, vs. Ethereum's 12-second block time.
• Protocol Integration: Features like Priority Fees and Versioned Transactions are built-in, not retrofitted.

Protocols like UniswapX and CowSwap abstract the wallet itself. Users sign intents ("get me the best price"), and off-chain solvers compete to fulfill them.

• User Doesn't Pay Gas: Solver submits the winning bundle, absorbing costs—a superior UX to gas sponsorship.
• Cross-Chain Native: Solvers can route intents across chains via LayerZero or Axelar, making single-chain AA obsolete.
• Market Efficiency: Solvers extract MEV for user benefit, turning a problem into a feature.

Starknet treats the entire chain as a unified operating system. Account abstraction is a native primitive, not a standard to be adopted.

• Single-VM Execution: Smart accounts and contracts run in the same VM, enabling atomic composability ERC-4337 can't match.
• Fee Abstraction: Starknet's fee model allows sponsors to pay for specific transactions natively.
• Vendor Lock-In as a Feature: By building a superior, vertically integrated stack, they capture developers who value capability over EVM compatibility.

App-specific rollups and L2s (e.g., dYdX, Lyra) bypass the need for generalized AA by baking custom account logic directly into the chain's rule set.

• Tailored Security: Validators/Sorters are optimized for the app's specific transaction types, enabling faster and cheaper execution than a general-purpose bundler.
• Sovereign Economics: The appchain captures all value from its transaction flow, disincentivizing a move to a shared AA standard.
• Protocol as the Account: The chain's state transition function is the account abstraction, making external standards redundant.

Products like Privy, Web3Auth, and Safe{Wallet} implement AA features at the client layer, making the on-chain standard irrelevant for most users.

• Key Management is the Real Problem: MPC and social recovery solve the seed phrase issue today, which is 90% of AA's value proposition.
• Faster Time-to-Market: These are live products with millions of users, while ERC-4337's infrastructure is still maturing.
• Chain Agnostic: They provide a consistent UX across Ethereum, Solana, and Polygon, reducing developer incentive to adopt a chain-specific standard.

ERC-4337 adds unnecessary complexity to Ethereum's modular stack. A dedicated Account Abstraction Rollup (an "AAR") could be cleaner and more efficient.

• Separation of Concerns: Let L1 handle security & consensus, a dedicated AA rollup handle user ops, and another for execution. Celestia and EigenDA enable this.
• Avoids L1 Bloat: Keeps the core Ethereum protocol lean, avoiding the complexity of baking AA into consensus.
• Competitive Bundler Markets: Multiple AA rollups can compete on speed and cost, unlike a monolithic standard.

ERC-4337's design centralizes power in the Bundler, a single actor who orders and submits UserOperations. This creates a new, extractable layer and potential censorship vector.

• Single Point of Failure: A dominant bundler (e.g., a large validator) can front-run or censor transactions.
• Fee Market Capture: Bundlers can extract MEV, undermining user savings from gas sponsorship.
• Fragmented Liquidity: Paymasters must pre-fund each bundler, creating capital inefficiency.

Layer 1 and L2 chains are implementing account abstraction at the protocol level, bypassing ERC-4337's overhead. This is the existential threat.

• Zero Gas Abstraction: Chains like zkSync and Starknet have native AA; users don't pay gas, sponsors do.
• Simpler Security Model: No need to trust a separate bundler network; security inherits from the base chain.
• Performance: ~50% lower latency by removing the UserOperation mempool and bundler relay step.

ERC-4337 automates transactions, but next-gen systems like UniswapX and CowSwap solve for user intents, a higher-level abstraction.

• Better Execution: Solvers compete to fulfill the user's desired outcome (e.g., best swap rate), not just a signed tx.
• Cross-Chain Native: Intents are chain-agnostic, enabling seamless experiences across LayerZero and Axelar.
• User Experience: Sign a declarative message ("swap X for Y") instead of managing gas and nonces.

ERC-4337 assumes a monolithic smart contract wallet. The future is modular: pluggable signature schemes, session keys, and recovery modules from different providers.

• Vendor Lock-In: ERC-4337 wallets are hard to upgrade or customize post-deployment.
• Innovation Speed: New schemes (e.g., stealth addresses, multi-PKI) require new wallet deployments, not module swaps.
• Examples: Solana's Token-2022 and Cosmos' CosmWasm show faster iteration on account primitives.

ERC-4337's gas sponsorship model (Paymaster) is capital-heavy and operationally complex, limiting adoption to deep-pocketed dApps.

• Capital Lockup: Paymasters must pre-stake ETH on every chain they support, creating $10B+ in opportunity cost at scale.
• Oracle Dependency: To pay fees in ERC-20 tokens, Paymasters need constant price feeds, adding risk and cost.
• Alternative: Layer 2s with sequencers can abstract gas fees at the protocol level with no user-side smart contract.

Every ERC-4337 wallet is a unique, auditable smart contract. This creates massive security overhead versus battle-tested, protocol-level account logic.

• Security Fragmentation: Each new wallet contract introduces new bug surface; one exploit can drain all similar wallets.
• Audit Costs: $50k-$500k per wallet implementation, stifling innovation and favoring incumbents.
• Counter-Example: BTC Lightning or Cosmos SDK accounts have standardized, audited logic at the protocol layer.