Why Account Abstraction Turns User Onboarding into a Platform Play

Traditional EOA wallets require users to manage seed phrases, pay gas in native tokens, and sign every transaction. This UX is a non-starter for the next billion users.

• ~90% drop-off at the seed phrase stage for non-crypto natives.
• Zero native token liquidity on new chains creates a cold-start paradox.
• Batch transactions (e.g., approve & swap) are impossible without complex relayers.

ERC-4337 and similar standards turn wallets into programmable smart contracts. This creates a new infrastructure layer—Account Abstraction factories—that protocols compete to own.

• Session keys enable gasless transactions sponsored by dApps.
• Social recovery and multi-factor auth replace brittle seed phrases.
• Atomic multi-op bundles allow single-click DeFi strategies.

StarkWare controls the stack from L1 (Starknet) to L2 to the AA wallet (Braavos, Argent). This vertical integration allows for native account abstraction at the protocol level, not just a standard.

• Cairo-native accounts enable features impossible on EVM, like transaction fee insurance.
• ~1M+ AA accounts already deployed, creating a first-mover moat.
• Direct integration with zk-rollup scalability for sub-cent fees.

These L2s are aggressively subsidizing AA adoption to drive ecosystem growth. They provide SDKs, gas grants, and partner with wallet builders like Safe{Core} and ZeroDev.

• Polygon's $50M+ fund for AA dApps and infrastructure.
• zkSync's native AA in its LLVM compiler, making it the default.
• Strategy: Commoditize the wallet to capture value in the application layer.

Safe isn't just a multisig; it's building a modular AA stack (Safe{Core}) that any chain or wallet can plug into. They aim to be the Android of smart accounts.

• $100B+ in assets secured across Ethereum, Base, Optimism.
• Plugin marketplace for recovery, spending limits, and automation.
• Decentralized governance via SAFE token creates a credibly neutral standard.

Coinbase is leveraging its 430M+ verified users and on-ramp dominance to bypass the factory war entirely. Their new Smart Wallet embeds AA directly into the world's largest fiat gateway.

• Instant, gasless onboarding using embedded MPC wallets.
• Seamless integration with Coinbase's L2, Base, and its dApp ecosystem.
• The play: User distribution beats superior tech. If you own the faucet, you own the flow.

User operations must be bundled and submitted by a trusted third party. This creates a new, unavoidable middleman layer.

• Economic Power: The top 3 bundlers could control >60% of transaction flow, extracting MEV and setting fees.
• Censorship Risk: Bundlers become the new validators, with the power to blacklist addresses or dApps.
• Single Point of Failure: A bug in a dominant bundler client (like Ethereum's Flashbots SUAVE) could halt entire AA ecosystems.

The entity paying gas fees (the paymaster) dictates economic policy and user lock-in.

• Platform Lock-In: Projects like Coinbase's Smart Wallet or Visa's paymaster will subsidize fees only for their own ecosystem, creating walled gardens.
• Unstable Economics: Subsidies are a marketing cost. When they dry up, user experience collapses overnight.
• Regulatory Target: A sanctioned paymaster could freeze all associated smart accounts instantly, a power no EOA ever had.

Replacing ECDSA with arbitrary verification logic (social recovery, multi-sig) breaks the security model.

• Opaque Security: Users can't audit the custom signature scheme of their smart wallet. A Safe{Wallet} module is not as battle-tested as Ethereum's native cryptography.
• Liability Diffusion: When funds are stolen via a malicious session key, who is liable? The dApp, the wallet provider, or the user?
• Quantum Vulnerability: Post-quantum secure schemes are not standardized, leaving AA accounts exposed while EOAs can upgrade at the protocol level.

AA wallets are not native to most L2s or alternate L1s, fracturing the user experience they promise to unify.

• Chain-Specific Wallets: Your Argent account on Starknet is a different contract than your Argent on Arbitrum. Recovery mechanisms and features may not cross chains.
• Bundler Fragmentation: A bundler network like Stackup or Pimlico must be deployed and trusted on every chain, recreating infrastructure battles.
• Vendor Lock-in at Scale: Migrating your AA identity and transaction history between wallet providers becomes technically impossible, cementing platform dominance.

The entity that bundles and submits user operations becomes the critical infrastructure layer, akin to how Alchemy and Infura dominate RPC access. This creates a natural monopoly on user flow and gas monetization.

• Control Point: Bundlers see 100% of user intent before it hits the mempool.
• Revenue Stream: Earn fees on every user action, not just initial onboarding.
• Data Advantage: Possess unparalleled insight into on-chain user behavior patterns.

Protocols and dApps will compete to sponsor gas fees via Paymasters to acquire users, mirroring web2 customer acquisition battles. The winning Paymaster infrastructure captures this multi-billion dollar spend.

• Acquisition War: Expect $1B+ in annual subsidized gas as the battleground.
• Sticky Users: Sponsored sessions create ~40% higher retention by removing friction.
• B2B Model: Paymaster services become a SaaS-like product for protocols.

Externally Owned Accounts (EOAs) and generic wallets like MetaMask become commodities. Value accrues to vertically integrated stacks that bundle AA-native wallets with specific use cases (e.g., gaming, DeFi).

• Vertical Lock-in: Gaming studios embed AA wallets for seamless asset onboarding.
• Feature Monopoly: Native integration of session keys, social recovery, and batched transactions creates unbeatable UX.
• Distribution Win: The application is the wallet, capturing the entire user journey.

AA's user operation mempool is a primitive for intent-centric systems. Solvers (like those in CowSwap or UniswapX) will compete to fulfill complex user intents, with bundlers and paymasters as the settlement layer.

• Paradigm Shift: Users declare what they want, not how to execute it.
• Efficiency Gain: Solver competition reduces costs by ~15-30% via MEV capture and optimization.
• Network Effects: The system with the most solvers and liquidity provides the best execution, creating a winner-take-most market.