EIP-4337 is the base layer, but L2s implement proprietary extensions that create fragmentation. Arbitrum, Optimism, and zkSync each deploy custom bundlers and paymasters, forcing developers to choose a chain-specific integration path.
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Blog
Who Controls the L2 AA Standard?
Account Abstraction is the next L2 moat. This analysis dissects the governance battle for AA upgrades between core teams, token holders, and bundler consortiums, and why it will define chain neutrality and developer lock-in.
introduction
THE STANDARDIZATION BATTLE
Introduction
The control of the L2 account abstraction standard dictates developer lock-in and user experience across the ecosystem.
The winner controls the user funnel. The dominant AA standard will dictate wallet defaults, gas sponsorship models, and transaction flow, similar to how MetaMask dominates EOA access. This creates a powerful platform moat.
Evidence: Starknet's native AA and zkSync's paymaster system demonstrate how L2s bypass the need for external smart contract wallets, embedding control directly into the protocol layer.
key-trends
WHO CONTROLS THE L2 AA STANDARD?
The Three Contenders for the AA Throne
The battle for account abstraction dominance is a proxy war for ecosystem control, with each contender offering a distinct path to user sovereignty.
01
The EVM Cartel: ERC-4337
The Problem: Fragmented, non-interoperable smart accounts across chains. The Solution: A canonical, EVM-native standard for permissionless bundlers and paymasters.
- Key Benefit: Maximal Ecosystem Buy-In. Backed by Ethereum Foundation, adopted by Base, Optimism, Arbitrum.
- Key Benefit: Decentralized Core. No single entity controls the bundler or paymaster network.
10+
L2s Live
~1M
Accounts
02
The Appchain Play: Starknet & zkSync
The Problem: ERC-4337's gas overhead and limited opcode support for advanced logic. The Solution: Native, protocol-level AA with custom validity proofs and state models.
- Key Benefit: Unmatched UX. Sponsorship, batch transactions, and session keys are first-class citizens.
- Key Benefit: Performance. Native integration avoids the ~42k gas overhead of ERC-4337's entry point.
~0 Gas
For Users
Native
Protocol Layer
03
The Wallet Hegemony: Safe & Coinbase Smart Wallet
The Problem: User experience is still dictated by wallet implementations, not standards. The Solution: Deploy massive, multi-chain smart account infrastructures that become the de facto standard.
- Key Benefit: Distribution & Trust. Safe's $40B+ TVL and Coinbase's 100M+ users create instant network effects.
- Key Benefit: Cross-Chain Abstraction. Users interact with a single account address across Ethereum, Polygon, Base, Gnosis Chain.
$40B+
TVL
10+
Chains
WHO CONTROLS THE STANDARD?
L2 AA Governance: A Comparative Matrix
A feature and governance comparison of the primary Account Abstraction (AA) standards and implementations for Layer 2s.
| Governance Feature | ERC-4337 (Ethereum) | L2 Native AA (e.g., Starknet, zkSync) | Vendor SDK (e.g., Biconomy, ZeroDev) |
|---|---|---|---|
Standard Body | Ethereum Foundation (ERC Process) | L2 Core Dev Team | Private Company |
Upgrade Authority | Ethereum Hard Fork | L2 Sequencer/Prover | Vendor Smart Contract Owner |
Bundler Client Diversity | 5+ (e.g., Skandha, Rundler) | 1 (Native Sequencer) | 1 (Vendor-Operated) |
Paymaster Portability | Cross-L2 via ERC-4337 | L2-Specific | Vendor Network (if supported) |
EntryPoint Contract Owner | Immutable (0x5FF...C8) | L2 Governance Multisig | Vendor Admin Key |
UserOp Mempool Decentralization | Permissionless Public Pool | Centralized Sequencer Queue | Vendor-Managed Queue |
Gas Fee Abstraction Sponsor | Any Paymaster (ERC-4337) | L2 Native Sponsorship | Vendor Gas Tank |
deep-dive
THE STANDARDIZATION WAR
The Slippery Slope of Proprietary AA
Layer 2s are weaponizing account abstraction to create captive user bases, fracturing the ecosystem.
Proprietary AA is a lock-in strategy. L2s like Starknet and zkSync implement custom account abstraction (AA) standards that are incompatible with others. This forces developers to build L2-specific smart accounts, creating high switching costs and a captive user base.
The winner controls the user. The dominant AA standard will define the default wallet experience for millions. This is a replay of the EVM wars, where network effects from tooling and developer mindshare create a de facto monopoly.
ERC-4337 is the battleground. While a neutral standard, its implementation is being co-opted. L2s add proprietary extensions and bundler incentives, creating a fragmented landscape where a 'universal' smart wallet is a myth without costly integration work.
Evidence: The Bundler Market. Arbitrum and Optimism now subsidize transaction fees for their native AA implementations, directly disincentivizing users from adopting third-party bundlers like Stackup or Alchemy, centralizing control at the L2 level.
counter-argument
THE REALITY OF PROTOCOL EVOLUTION
Steelman: Centralized Upgrades Are Necessary for Speed
A core development team's ability to push rapid, centralized upgrades is the primary driver for establishing a dominant L2 account abstraction standard.
A standard requires momentum. The winner-take-all nature of network effects in crypto means the first standard to achieve critical mass captures the ecosystem. This race favors teams that can iterate without committee paralysis.
Decentralized governance kills velocity. Contrast the upgrade pace of a core team like StarkWare with a DAO-managed protocol. On-chain votes for every EIP-4337 bundler tweak or paymaster policy create fatal latency against competitors.
Look at Ethereum's own history. Vitalik Buterin and core devs pushed through major upgrades like the Merge via centralized coordination, not on-chain DAO votes. This precedent validates temporary centralization for protocol supremacy.
Evidence: StarkNet's account abstraction lead. StarkWare's centralized control enabled the rapid deployment of native AA, smart accounts, and fee abstraction, forcing the entire EVM ecosystem to play catch-up via slower, fragmented EIP-4337 implementations.
risk-analysis
WHO CONTROLS THE L2 AA STANDARD?
The Bear Case: Risks of Captured AA Governance
The push for Account Abstraction (AA) standardization on L2s risks centralizing control over the fundamental user experience of the entire ecosystem.
01
The Arbitrum Foundation's ERC-4337 Monopoly Play
Arbitrum's aggressive bundler subsidy program and native integration of ERC-4337 creates a dominant, foundation-controlled entry point. This risks turning the open standard into a vendor-locked service.
- $3M+ in initial subsidies to centralize bundler activity.
- Foundation-managed "Permissionless" mempool and bundler create a single point of failure and censorship.
- Sets a precedent where the L2 with the deepest pockets, not the best tech, dictates AA's future.
$3M+
Initial Subsidy
1
Govt. Mempool
02
The Cartel of Core Devs & VCs
The ERC-4337 reference implementation and its core infrastructure (Bundlers, Paymasters) are controlled by a small consortium of teams like Ethereum Foundation, Stackup, Alchemy, and Biconomy. This creates an informal governance cartel.
- Zero on-chain governance for critical parameter updates like gas overhead calculations.
- Roadmap and fee market mechanics are decided by private working groups, not token holders.
- VC-backed entities have a structural incentive to prioritize extractable fees over user savings.
~4
Core Teams
0
On-Chain Votes
03
Stifling Alternative AA Architectures
The massive momentum behind ERC-4337 as the L2 standard actively drowns out research into more decentralized, efficient, or L1-native approaches like RIP-7560 or native smart contract accounts.
- Creates a path dependency where L2s must adopt 4337's heavy bundler/paymaster model to be "compatible".
- Diverts developer mindshare and funding from exploring radically simpler models that could reduce fees by >90%.
- Risks baking inefficiencies (e.g., signature aggregation limits) into the foundation of the multi-chain ecosystem.
1
Dominant Model
>90%
Potential Fee Save
04
The Paymaster as a Censorship Tool
ERC-4337's Paymaster mechanism, while enabling gas sponsorship, introduces a powerful new vector for transaction-level censorship and surveillance. The entities controlling major paymaster services become de facto gatekeepers.
- Paymasters can blacklist dApps or user addresses by refusing to sponsor their gas, a more granular control than block builders have.
- Alchemy's "Sponsored Transactions" and similar services create a data honeypot, exposing full user transaction graphs.
- Regulatory pressure could turn compliant paymasters into mandatory KYC checkpoints for L2 access.
100%
Tx Visibility
New Vector
For Censorship
future-outlook
THE STANDARD WAR
The Path to Neutral Infrastructure
The battle for the L2 account abstraction standard is a proxy war for ecosystem control, with neutrality as the ultimate prize.
EIP-4337 is the baseline, but its minimalism created a power vacuum. L2s like Arbitrum and Optimism must now choose between building proprietary systems or adopting a neutral standard. This decision dictates whether user ownership is portable or becomes a vendor-locked feature.
Proprietary stacks create moats. Starknet's native AA and zkSync's custom paymasters are powerful but trap users. This is a classic platform play: superior UX today in exchange for sovereignty tomorrow. The trade-off is intentional and valuable for the chain.
Neutral infrastructure requires ceding control. A truly portable standard, like one built on top of EIP-4337 by a third-party like Biconomy or Stackup, must be adopted by all major L2s. This requires them to prioritize ecosystem health over individual competitive advantage.
The winner defines the UX layer. Whoever's bundler and paymaster standards achieve dominance will control the gateway for millions of users. This is why Polygon aggressively promotes its AA stack—it's a land grab for the post-wallet application layer.
takeaways
THE BATTLE FOR USER ABSTRACTION
TL;DR for Protocol Architects
The L2 account abstraction standard is a winner-take-most market for user acquisition and protocol revenue.
01
The Problem: Fragmented User Experience
Every L2 and wallet vendor pushes its own AA implementation, forcing developers to choose sides and fracturing liquidity.\n- No interoperability between Arbitrum's stylus, zkSync's native AA, and Optimism's account abstraction.\n- High integration cost for dApps needing multi-chain support.\n- User lock-in to a specific L2's wallet ecosystem.
5+
Competing Standards
~$100K
Dev Cost per Chain
02
The Solution: ERC-4337 as the De Facto Standard
A protocol-layer standard that moves AA logic off-chain to a global mempool and bundler network, making it chain-agnostic.\n- Decouples innovation (Bundlers, Paymasters) from L2 core development.\n- Enables cross-chain intent flows, similar to UniswapX or Across.\n- Creates a new market for bundler services and paymaster subsidies.
10+
L2s Live
$1B+
Sponsored Gas
03
The Battleground: Bundler & Paymaster Control
ERC-4337's real power lies in the off-chain infrastructure layer, not the smart contract interface.\n- Bundlers (like Stackup, Alchemy) control transaction ordering and MEV capture.\n- Paymasters (protocols, L2 foundations) control subsidy models and user onboarding.\n- Wallet vendors (Safe, Zerodev) are the distribution channel, influencing default service providers.
~80%
Bundler Market Share
~500ms
Latency Advantage
04
The Endgame: Vertical Integration Wins
The dominant player will control the full stack: L2 sequencer, bundler network, and popular smart wallet.\n- Arbitrum BOLD + Stylus + native bundler integration creates a closed-loop system.\n- zkSync's native AA bypasses ERC-4337 entirely, favoring its own hyperchain ecosystem.\n- LayerZero's Omnichain Abstraction could become the cross-chain bundler, linking all L2s.
50%+
TVL Capture
10x
User Onboarding Speed
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