Why ERC-4337 is Just the Beginning

Sponsored gas is a trojan horse. The entity paying your fees controls transaction ordering, creating centralized MEV extraction points and censorship risk.

• Key Benefit 1: Decentralized Paymaster Networks like Ethereum's PBS for bundles prevent single-entity control.
• Key Benefit 2: MEV-Aware Bundlers (e.g., Flashbots SUAVE) can return value to users, turning a cost into a rebate.

Declarative transactions ("swap this for that") are the next UX leap, abstracting away implementation details like bridges and liquidity sources.

• Key Benefit 1: Anoma, UniswapX, and CowSwap solve this by letting solvers compete to fulfill your intent, driving down cost.
• Key Benefit 2: Enables seamless cross-chain interactions without users managing gas on 5 different chains.

ERC-4337's mempool is permissionless, but bundler execution is not. A few dominant nodes (e.g., Stackup, Alchemy) create a single point of failure.

• Key Benefit 1: Alt Mempool Designs (e.g., EigenLayer AVS for Bundling) create economic security and liveness guarantees.
• Key Benefit 2: Specialized L2 Bundlers optimize for local state access, reducing latency to ~100ms and cost by >40%.

ERC-4337's paymaster model centralizes transaction sponsorship and censorship risk. A malicious or faulty paymaster can block or frontrun user ops.

• Key Benefit 1: Decentralized Verifiable Paymasters (DVPs) like Etherspot's Skandha or Stackup use a network of operators with fraud proofs.
• Key Benefit 2: Enables non-custodial gas sponsorship for dApps without trusting a single entity.

Approving every transaction kills UX for gaming and social apps. Native session keys are impossible with EOAs.

• Key Benefit 1: Biconomy and ZeroDev enable gasless transaction sessions where users pre-approve rules (e.g., max spend, time limit).
• Key Benefit 2: Drives ~10x higher user engagement in dApps by mimicking Web2 'logged-in' states without custodial risk.

The bundler role in ERC-4337 is a natural MEV extractor. They can reorder, censor, or sandwich UserOperations for profit.

• Key Benefit 1: Rhinestone and Kernel are building trust-minimized bundlers with commit-reveal schemes and fair ordering.
• Key Benefit 2: Protects intent-based transactions (like those from UniswapX or CowSwap) from being exploited by the infrastructure layer itself.

Over 80% of ERC-4337 UserOperations are bundled by Alchemy's centralized service. This recreates the RPC provider centralization problem.

• Key Benefit 1: Stackup and Candide are building geographically distributed bundler networks to decentralize this critical layer.
• Key Benefit 2: Redundant bundling ensures sub-second transaction inclusion even if a major provider fails.

Smart accounts are trapped on their native chain. True UX requires seamless movement across Ethereum L2s, Solana, and Cosmos.

• Key Benefit 1: Polygon AggLayer and Chainlink CCIP are enabling native cross-chain smart accounts where state and logic are synchronized.
• Key Benefit 2: Enables single onboarding flow for a user whose assets and activity span multiple ecosystems, moving beyond simple bridges like LayerZero or Across.

Seed phrases and gas are initial barriers. Social logins (Web3Auth) introduce custodial vectors and fragmented key management.

• Key Benefit 1: Privy and Dynamic embed non-custodial smart wallets directly into dApps using embedded MPC.
• Key Benefit 2: ~60% higher conversion from visitor to active user by abstracting wallet creation entirely, making the first transaction native.

ERC-4337's security model assumes a permissionless, competitive bundler market. Early data shows high centralization risk, with a few nodes like Pimlico and Stackup processing the majority of UserOperations. A dominant bundler can censor transactions or extract MEV at scale.

• Centralization Vector: Top 2 bundlers control ~70%+ of relayed ops.
• MEV Extraction: Bundlers are the new block builders, creating a fresh arena for proposer-builder separation (PBS) debates.
• Staking Requirement: No slashing yet, making cartel formation cheap.

Paymasters abstract gas fees, but their solvency and policies become critical trust points. A dominant USDC-paymaster could blacklist addresses, and a volatile gas market could bankrupt under-collateralized services, stranding user assets.

• Single Point of Failure: Reliance on a few entities like Circle or Gelato for sponsored transactions.
• Regulatory Attack Surface: Paymasters are clear KYC/AML choke points.
• Liquidity Risk: Requires $10M+ in gas liquidity per chain to scale, creating high barriers.

To save gas, ERC-4337 allows signature aggregation off-chain, but the on-chain verifier is a new, complex, and unaudited cryptographic primitive. A bug here compromises all accounts using that aggregator, a systemic risk reminiscent of early multisig vulnerabilities.

• Unproven Cryptography: New BLS or custom schemes lack battle-testing.
• All-or-Nothing Failure: One verifier bug breaks every wallet that adopted it for savings.
• Implementation Fragmentation: No standard aggregator leads to security debt across Safe, ZeroDev, Biconomy.

Each Optimism, Arbitrum, and zkSync implements its own slightly modified ERC-4337 mempool and paymaster contracts. This fragments liquidity, complicates bundler operations, and defeats the standard's interoperability promise, mirroring the early EVM-compatibility wars.

• Non-Standard Mempools: Bundlers must run separate integrations for each L2.
• Contract Divergence: Incompatible entry points increase integration overhead 10x.
• User Experience: Seamless cross-chain AA remains a distant goal, hurting Chainlink CCIP and LayerZero visions.