Why AA Will Dictate the Winners in the Modular Era

Native wallets and gas tokens are a user acquisition killer. New users can't transact without acquiring native ETH or SOL first, a ~$100B+ onboarding barrier. Modular chains fragment liquidity, making this worse.\n- Gas Sponsorship: Protocols can pay fees, enabling true freemium models.\n- Multi-Chain Gas: Pay on Polygon with USDC, settle on Arbitrum.\n- Session Keys: Enable 0-click transactions for gaming and trading.

EOA wallets force users to be protocol operators. AA smart accounts let users declare what they want, not how to do it. This enables intent-based architectures like UniswapX and CowSwap to dominate.\n- Abstracted Execution: Users sign outcomes; solvers (e.g., Across, Socket) compete for optimal routing.\n- Atomic Composability: Bundle a cross-chain swap, stake, and NFT mint into one signature.\n- MEV Protection: Built-in privacy RPCs and batch auctions reclaim value for the user.

Seed phrases are a single point of failure for ~$500B in assets. AA replaces this with modular security policies defined in smart contract logic.\n- Social Recovery: Use Google Auth or a friend's wallet as a guardian, no seed phrase.\n- Transaction Policies: Set spending limits, whitelist DApps, enforce time locks.\n- Quantum Resistance: Migrate to new signature schemes (e.g., ERC-4337) without changing the account address.

Wallets become the new OS. Smart accounts are programmable endpoints for delegated authority, enabling novel business models. Think Stripe for Web3.\n- Subscription Services: Auto-invest $10 in ETH weekly from your USDC balance.\n- DeFi Vault Managers: Grant limited, non-custodial control to yield strategies.\n- Enterprise Onboarding: HR deploys a batch of 1000 gasless accounts for employees.

Rollups, app-chains, and L2s create a liquidity and state fragmentation problem. AA smart accounts are the portable identity layer that bridges them.\n- Unified Address: Same 0x account works on Ethereum, Arbitrum, zkSync, Base.\n- Cross-Chain Session Keys: A single permission grants action across multiple chains.\n- Native Abstraction: Protocols like LayerZero and CCIP can message the account, not the chain.

EOAs are anonymous, isolated keys. AA accounts are rich, programmable entities. This creates a verifiable on-chain social graph for hyper-targeted growth.\n- Attestation Layers: Build credit scores via EAS (Ethereum Attestation Service).\n- Loyalty Programs: Protocol can identify and reward its most active users across chains.\n- Ad-Supported Models: Serve relevant ads, prove engagement, and share revenue directly to the user's account.

Ethereum's core devs bet that a standard, not a single L2, must own the AA narrative. ERC-4337 creates a permissionless, protocol-level user operation mempool.

• Decouples innovation from L1 consensus, enabling Visa-scale transaction batching.
• Unlocks a meta-market for bundlers and paymasters, akin to MEV searchers and relays.
• Forces L2s like Arbitrum, Optimism, and Polygon to compete on AA implementation quality, not just specs.

StarkWare bypassed ERC-4337 to build native AA directly into their ZK-Rollup. Every account is a smart contract.

• Eliminates EOA overhead, making social recovery and multisig logic a first-class primitive.
• Enables atomic composability across dApps within a single transaction, a killer app for DeFi.
• Proves that the most seamless UX wins, even if it means sacrificing short-term EVM compatibility.

Polygon's AggLayer isn't just a bridge; it's an AA-powered unified liquidity layer for sovereign chains.

• Solves the chain abstraction problem by making gas and asset origin irrelevant to the user.
• Turns every chain using its CDK into a seamless extension of Polygon PoS's $1B+ TVL and user base.
• Positioned as the front-end for enterprises and gaming studios who need a single entry point to a fragmented landscape.

Solana's answer to AA is to make the base layer so fast and cheap that abstraction is less critical.

• Renders gas sponsorship trivial with $0.0001 average transaction costs.
• Leverages state compression and compressed NFTs to onboard millions at near-zero cost, a form of batch-level AA.
• Demonstrates that raw performance can be a viable alternative to complex abstraction stacks for specific use cases.

ERC-4337's success depends on a robust bundler market. These players are building the infrastructure for reliable user ops.

• JiffyScan focuses on maximum uptime and speed, becoming the default RPC for AA transactions.
• Pimlico builds a full-stack toolkit with paymaster services, enabling gasless onboarding for any dApp.
• This competition drives down latency and cost for end-users, just like L2 sequencers did for rollups.

The front-end is shifting from MetaMask to AA-native clients like Safe{Wallet}, Biconomy, and ZeroDev.

• Turns wallets into feature-rich OS layers with session keys, subscription billing, and fraud monitoring.
• Creates sticky user relationships where the wallet, not the chain, holds the social graph and identity.
• The ultimate winner may not be a chain, but the wallet SDK that achieves critical mass across all of them.

Modularity fragments liquidity across rollups and appchains. Without a universal AA standard, each chain's wallet becomes a silo. The winning AA layer will be the one that unifies this liquidity, making it programmatically accessible.

• User Lock-in: Apps are forced to build per-chain, losing composability.
• Winner's Reward: The dominant AA standard captures a tax on all cross-chain intent flow.
• Precedent: See the network effects of EIP-4337 bundlers and paymasters.

Bundlers in AA (like those in EIP-4337 or Starknet's native AA) are the transaction ordering entities. In a modular world with shared sequencers (e.g., Espresso, Astria), the bundler becomes a centralized choke point for censorship and MEV.

• Centralization Risk: A few dominant bundler services (e.g., Stackup, Alchemy) could control UX.
• MEV Capture: Bundlers extract value from user intents before they hit the sequencer.
• The Battle: Winning requires controlling or decentralizing the bundler network.

Paymasters sponsor gas fees, enabling gasless UX. The entity that controls subsidy capital and risk models becomes the gatekeeper. In a modular ecosystem, this power is exponential.

• VC-Backed Subsidies: Deep-pocketed paymasters (e.g., Biconomy, Candide) can buy market share, creating temporary monopolies.
• Credit Risk: The winning paymaster network must manage cross-chain credit exposure at scale.
• Outcome: The 'Visa' of web3 emerges not from a chain, but from the dominant paymaster protocol.

Modular AA moves security from the L1 (EOA) to smart contract logic and social recovery networks. A critical bug in a widely adopted smart account factory (e.g., Safe, ZeroDev) becomes a systemic, cross-chain risk.

• Single Point of Failure: A hack could compromise millions of accounts across dozens of rollups simultaneously.
• Audit Lag: The complexity of modular interactions outpaces audit cycles.
• The Imperative: The winning AA stack must have formal verification and decentralized recovery as first-class features.