The Hidden Centralization of 'Permissionless' Bundler Networks

Permissionless in name only: The current generation of bundler networks for ERC-4337 accounts is a facade of decentralization. While the protocol specification is open, the operational reality is dominated by a handful of centralized entities like Pimlico and Stackup, who control the majority of user operations and MEV extraction.

The validator-bundler divergence: Unlike Ethereum's validator set, where node operation is economically aligned and geographically distributed, bundler centralization creates systemic risk. A single point of failure in a major RPC provider like Alchemy or Infura can cripple the entire user experience layer, defeating the purpose of a resilient network.

Evidence of concentration: Data from Etherscan's 4337 tracker shows that a single bundler frequently processes over 40% of all UserOperations. This concentration mirrors the early centralization problems seen in sequencer networks for L2s like Arbitrum and Optimism before their decentralization roadmaps.

Bundlers are the new miners. The role is identical: aggregating transactions, ordering them, and submitting them to a base layer for a fee. The economic incentives for pooling are identical: smoothing revenue, reducing variance, and sharing infrastructure costs.

Permissionless access is a mirage. While anyone can run a bundler, the capital requirements and technical complexity create a high barrier. This mirrors the early days of Bitcoin mining, where solo mining became economically irrational.

The MEV threat accelerates centralization. Just as mining pools captured MEV in PoW, bundler pools will capture cross-domain MEV. This creates a winner-take-most dynamic where the largest pools with the best data access dominate.

Evidence: Look at the data. In Ethereum PoW, the top 3 mining pools controlled >50% of hashrate. Today, in early ERC-4337 implementations, a handful of entities like Pimlico, Stackup, and Alchemy process the majority of UserOperations.

Staking is a false solution. Requiring a bond for bundlers, as proposed by EIP-4337's future roadmap, does not prevent centralization. The capital cost is trivial for large players like Coinbase or Lido, creating a permissioned cartel of deep-pocketed entities. It replaces a permissionless market with a permissioned one.

Randomized selection is gamed. A naive lottery for bundle inclusion is vulnerable to Sybil attacks and predictable manipulation. The MEV-Boost ecosystem demonstrates that sophisticated actors will always find ways to influence pseudo-random processes to capture value, replicating the validator centralization problem.

Proposer-Builder Separation (PBS) shifts, not solves. PBS, as seen in Ethereum's consensus layer, separates block building from proposing. This creates a specialized builder market but concentrates power in a few optimized entities like Flashbots. The economic pressure to maximize MEV guarantees that the most efficient, centralized builders win.

Evidence: The L2 Precedent. Look at Arbitrum and Optimism sequencer models. Despite decentralization roadmaps, their temporary centralized control demonstrates the immense inertia. The operational advantage and revenue capture of a single entity are too powerful to cede voluntarily, setting the precedent for bundler networks.