Why ERC-4337 Fails the Mass Adoption Test

ERC-4337's reliance on on-chain paymasters for gas sponsorship creates a centralization vector and cost overhead. Every transaction requires a paymaster's signature and on-chain validation, adding latency and cost.

• Centralized Reliance: Dominated by few entities like Stackup and Biconomy.
• Added Latency: Introduces ~300-500ms of extra validation delay.
• Fee Complexity: Users face abstracted, often higher, effective gas costs.

Bundlers are the system's backbone but have no protocol-level incentives, leading to fragile service and potential censorship. They operate as extractive MEV searchers, not neutral infrastructure.

• No Native Incentives: Profit solely from arbitrage and frontrunning.
• Service Fragility: No SLA guarantees for user operations (UserOperations).
• Censorship Risk: Bundlers can filter or reorder transactions based on profit.

ERC-4337 mandates all validation logic executes on-chain, inheriting Ethereum's block time and gas price volatility. This defeats the instant UX expectations of mainstream applications.

• Block Time Bound: UserOperations wait for ~12 seconds per Ethereum block.
• Gas Volatility: Sponsorship fails during network spikes, breaking UX.
• No Pre-Confirmation: Unlike Solana or Aptos, no sub-second finality guarantees.

Despite a standard, each smart account wallet (Safe, ZeroDev, Biconomy) implements its own SDK, recovery, and fee logic. This fragments developer integration and confuses users, mirroring early EOA wallet chaos.

• Non-Standard SDKs: Developers must integrate multiple wallet providers.
• Recursive Complexity: Social recovery setups are often more confusing than seed phrases.
• Onboarding Friction: Still requires bridging funds or complex paymaster setups to start.

Deploying ERC-4337 on L2s like Arbitrum or Optimism reduces cost but amplifies systemic issues. Cross-chain UserOperations are impossible, locking users and assets into siloed rollup environments.

• Chain Silos: An account on Arbitrum cannot natively execute on Optimism.
• Amplified Fragility: L2 sequencer downtime breaks the entire 4337 stack.
• Bridge Dependency: Requires traditional bridges, negating the seamless abstraction promise.

Solutions like UniswapX, CowSwap, and Across demonstrate that the endgame is declarative intents, not imperative transactions. ERC-4337 is a complex stepping stone towards this, where users specify what they want, not how to do it.

• User-Centric: Declare outcomes, not transaction steps.
• Off-Chain Efficiency: Solvers compete to fulfill intents optimally.
• Chain-Agnostic: Native cross-chain functionality via solvers like Across and LayerZero.

ERC-4337's design centralizes transaction ordering power with bundlers, creating a single point of failure and rent-seeking. This recreates the miner extractable value (MEV) problem at the application layer.

• Permissionless in theory, oligopolistic in practice: High capital/staking requirements for profitable bundling.
• User Experience Black Box: Users cannot audit or choose their transaction ordering, leading to unpredictable delays and costs.

Gas sponsorship via paymasters is a critical feature, but it introduces a powerful censor. Most implementations rely on a single, trusted entity to pay fees, creating regulatory and operational choke points.

• Protocol-Level Censorship: A paymaster can refuse to sponsor transactions to specific dApps or from specific users.
• Single Point of Failure: If the dominant paymaster (e.g., a large exchange) goes offline, entire user segments lose functionality.

ERC-4337 introduces a new UserOperation mempool separate from the base layer. This fragments liquidity, complicates transaction simulation, and is vulnerable to spam and denial-of-service attacks that standard EOA mempools resist.

• Simulation Complexity: Bundlers must simulate complex, state-dependent UserOps, creating high overhead and vulnerability to simulation griefing.
• No Native Fee Market: Lack of a robust, cross-bundler fee auction leads to poor transaction prioritization and bundler inefficiency.

Every smart contract wallet is a unique, non-upgradable contract. This fragments on-chain state, bloats node storage, and makes widespread social recovery and key rotation a scalability nightmare.

• State Bloat: Billions of user accounts mean billions of singleton contracts, not just key-value pairs.
• No Native Key Rotation: Changing a signing key requires a new wallet deployment, abandoning all previous on-chain history and relationships.

While ERC-4337 is L2-agnostic, its core operations (signature verification, storage reads) are prohibitively expensive on rollups. It fails to leverage L2-native account abstraction features, making it a suboptimal, high-overhead standard for its intended scaling environment.

• Cost Inefficiency: Paying for signature verification in the EVM on an L2 negates the cost savings of moving off L1.
• Missed Native Optimizations: Competing with L2-native AA (e.g., StarkNet, zkSync) that bake abstraction into the protocol with far lower gas costs.

Emerging intent-based architectures (UniswapX, CowSwap, Across Protocol) solve the user experience problem more elegantly. They let users declare what they want, not how to do it, delegating complex execution to a competitive solver network, making ERC-4337's rigid transaction model look archaic.

• Superior UX: Users sign intents, not transactions. No gas, no failed tx, no slippage.
• Efficient Execution Market: Solvers compete to fulfill intents optimally, capturing value for users instead of bundlers.

ERC-4337 centralizes transaction ordering and censorship power with bundlers, recreating the validator centralization problem it aimed to solve. This creates a single point of failure and rent extraction.

• No native PBS: Unlike Ethereum's proposer-builder separation, bundlers are monolithic.
• MEV capture: Bundlers can front-run user operations for profit.
• Relayer risk: Users must trust the bundler's liveness.

UserOperations introduce complex, unpredictable gas pricing that defeats the 'simplicity' promise. Paymasters add another layer of abstraction and cost.

• Two-phase gas: Must prepay for both validation and execution, complicating estimates.
• Sponsorship overhead: Paymaster services add ~10-20% overhead to gas costs.
• No batch discounts: Unlike native EOA txns, no inherent savings for grouped actions.

Every smart account wallet (Safe, Biconomy, ZeroDev) implements its own factory and entry point version, breaking composability. This is the new 'wallet connect' problem.

• No universal recovery: Social recovery schemes are siloed by vendor.
• Entry point upgrades: Breaking changes require coordinated migration.
• Fractured liquidity: Session keys and modules are not portable between wallets.

While designed for L2s, ERC-4337's storage overhead and validation logic can make UserOperations more expensive than native L2 transactions on chains like Arbitrum or Optimism.

• Storage bloat: Account nonces and signature aggregation increase calldata.
• Validation compute: Signature verification on-chain is costly vs. EOA native txn.
• No L2-native benefits: Misses optimizations like Alt-DAO or EIP-7702-style approaches.

ERC-4337 is a transaction-based paradigm. The next wave is intent-based systems that declare what users want, not how to do it, abstracting complexity further.

• Solver competition: Drives better prices and success rates vs. fixed bundler paths.
• Cross-chain native: Projects like Across and LayerZero execute intents atomically across domains.
• User experience: Sign a single intent, not multiple UserOperations.

ERC-4337 doesn't solve the seed phrase problem. Social recovery is a bolt-on, not a default, and most implementations still rely on traditional EOA signers behind the scenes.

• Cold start: Users must still secure a seed phrase to create the smart account.
• Recovery latency: Social recovery takes ~1-7 days, defeating 'smart' account promises.
• MPC superiority: Native MPC wallets (like Web3Auth) offer better key management out-of-the-box.