Can Account Abstraction Obfuscate MEV?

Traditional EOA wallets create a transparent, sequential path for searchers. Every signature, nonce, and gas bid is public mempool data, enabling front-running and sandwich attacks on a $1B+ annual MEV market.

• Transaction intent is broadcast before execution.
• User is the direct, identifiable transaction signer.
• Gas auctions are won by the highest public bid.

AA enables declarative transactions. Users submit signed intents (e.g., 'swap X for Y at best price') to a Solver Network (like UniswapX or CowSwap). Solvers compete privately, obfuscating the execution path.

• User signs an intent, not a specific tx.
• Execution logic is delegated to competitive solvers.
• MEV is internalized as solver profit, potentially returned to the user.

AA doesn't eliminate MEV; it shifts and consolidates it. The Bundler (the entity that packages UserOperations) becomes a powerful new extractor. It can reorder, censor, or insert its own transactions within the bundle, creating ~500ms latency opportunities invisible to the public mempool.

• MEV moves from public mempool to private bundler queues.
• Centralization risk around dominant bundlers (like Flashbots SUAVE).
• Requires Trusted Execution Environments (TEEs) or cryptographic proofs for fairness.

AA makes generalized, predatory MEV harder and more expensive by breaking the transparent EOA model. However, it creates new centralized choke points (Bundlers, Solvers) and more complex forms of value extraction. The net effect is a shift from democratized, chaotic MEV to institutionalized, protocol-captured MEV.

• Reduces wallet-draining sandwich attacks for end-users.
• Increases capital and technical barriers for independent searchers.
• Final outcome depends on bundler/solver market structure.

Public mempools broadcast intent. Searchers front-run profitable swaps, extracting ~$1.2B annually from users. This is a direct, measurable cost.

• Intent Leakage: Every vanilla transaction reveals its strategy.
• Value Extraction: Profits are siphoned before execution.
• User Experience: Results in failed trades and worse prices.

Projects like Ethereum's ERC-4337 and Starknet's native AA enable private transaction submission. Bundlers receive signed UserOperations, not raw calldata.

• Intent Obfuscation: Searchers see a commitment, not the trade logic.
• Bundler Competition: Bundlers bid for the right to include the op, capturing MEV for the user/network.
• Architecture: Relies on a decentralized network of Pimlico, Stackup, or Alchemy bundlers.

Flashbots' SUAVE is a dedicated mempool and decentralized block builder. It's the logical extension of AA's private flow, creating a neutral marketplace.

• Universal Preference: Users express intents (e.g., "best price for 100 ETH").
• Solver Competition: Solvers (like CowSwap, 1inch) compete privately to fulfill it.
• Chain Agnostic: Aims to be the preferred mempool for all EVM chains and rollups.

AA hides the path to execution, not the result. On-chain arbitrage (e.g., DEX price differences) and liquidations remain extractable.

• Execution-Gas MEV: The first transaction to call a profitable function after a block wins.
• Architectural Bound: This is a fundamental limit of public blockchain state.
• Mitigation: Requires application-layer design (e.g., CowSwap's batch auctions, Chainlink's Fair Sequencing).

The bundler role in ERC-4337 centralizes power. They choose which UserOperations to include and can extract MEV themselves.

• Risk of Re-Centralization: A few dominant bundlers (e.g., Alchemy, Blocknative) could control flow.
• PBS for Bundlers: The solution is Proposer-Builder Separation for the bundler network, a la EigenLayer's MEV+.
• Staked Bundlers: Reputation or stake-based systems to ensure fair ordering.

AA enables generalized intents that span multiple chains. Protocols like Across and Circle's CCTP use fillers who compete in a unified auction, obfuscating cross-chain MEV.

• Unified Liquidity: Solvers use liquidity anywhere to fulfill a cross-chain request.
• Price, Not Speed: Winning is about offering the best net price, not being fastest to a public mempool.
• Future State: This model converges with SUAVE and UniswapX, making MEV a commodity.

ERC-4337 bundles and Paymasters create new, centralized choke points for order flow. Searchers can pay Paymasters for exclusive rights to bundle user transactions, creating a pay-for-play market for MEV. This obfuscates the transaction origin, making fair ordering and censorship resistance harder to audit.\n- New MEV Surface: Paymaster-as-auctioneer for bundle priority.\n- Censorship Risk: Paymasters can filter or reorder user ops based on profit.

AA enables complex intents, shifting trust from the chain to off-chain solvers (like those in CowSwap or UniswapX). A malicious or compromised solver executing a user's signed intent can extract maximum value, with the user's signature as blanket authorization. The verification gap between intent signing and execution is a new attack surface.\n- Blank Check Risk: A signed intent can be exploited for maximal extractable value.\n- Solver Monopolies: Lead to centralized MEV capture and reduced competition.

Paymasters that sponsor gas fees create a meta-MEV opportunity. Searchers can frontrun a user's sponsored transaction with their own, identical transaction, but paid directly, displacing the sponsored one. The user's transaction fails, but the searcher captures the arbitrage. This turns gas sponsorship into a honeypot revealing profitable opportunities.\n- Honeypot Effect: Sponsored tx reveals profitable arbitrage path.\n- Wasted Subsidies: User's gas is paid, but their transaction reverts.

To combat opaque order flow, encrypted mempool protocols like EigenLayer's MEV-Boost++ and Flashbots' SUAVE aim to separate transaction dissemination from execution. User operations are encrypted until inclusion, preventing frontrunning. SUAVE's decentralized network of executors and block builders intends to democratize MEV capture.\n- Execution Fairness: Prevents pre-execution data leaks.\n- Decentralized Auction: Moves order flow auction on-chain.

Mitigating solver risk requires standardizing intent schemas (e.g., Anoma, Essential) to make them verifiably constrained. This allows users to sign only specific outcomes, not blanket permissions. Combined with solver reputation systems and real-time auditing of fulfillment proofs, this reduces the trust surface.\n- Constrained Intents: Limit solver's discretionary power.\n- Proof-of-Fulfillment: On-chain verification of correct execution.

To prevent subsidy frontrunning, Paymasters and users can adopt commit-reveal schemes where the transaction content is hidden until block inclusion. Using private RPCs (like Flashbots Protect) or direct bundler submission bypasses the public mempool entirely. This requires deeper integration between wallet, Paymaster, and bundler.\n- Mempool Bypass: Submit userOps directly to trusted bundlers.\n- Hidden Content: Commit-reveal prevents frontrunning of intent.

ERC-4337's UserOperations are aggregated by Bundlers, which become centralized MEV extraction points. This creates a trusted relay problem similar to PBS.

• Centralized Control: Bundlers can front-run, censor, or reorder transactions.
• Fee Skimming: They can siphon value from user gas subsidies or sponsored transactions.
• New Attack Surface: Malicious Bundlers can exploit atomic batch execution for sandwich attacks.

Flashbots' SUAVE aims to decentralize the mempool and execution market, acting as a neutral platform for AA operations.

• Decentralized Sequencing: Separates transaction ordering from execution, preventing Bundler monopoly.
• Encrypted Mempool: Protects UserOp intent from front-running via threshold encryption.
• Cross-Chain MEV: Enables intent-based routing across chains, competing with LayerZero and Across.

AA enables declarative "intents" (e.g., "swap X for Y at best rate"), shifting MEV from adversarial extraction to competitive solving, akin to UniswapX and CowSwap.

• Solver Competition: Solvers compete to fulfill user intents, returning surplus value.
• MEV Recycling: Extracted value can be partially refunded to users or the protocol.
• Privacy Gains: Intents hide precise transaction paths, reducing front-running surface.

Paymasters and signature aggregators can introduce regulatory compliance at the protocol level, a more potent threat than miner-level censorship.

• KYC'd Gas: Paymasters can refuse to sponsor non-compliant UserOperations.
• Blacklist Enforcement: Smart accounts can be programmed to reject interactions with sanctioned addresses.
• Irreversible Policy: Rules are hardcoded in immutable smart contracts, not social consensus.

Projects like EigenLayer AVSs and Espresso Systems are building secure enclave-based Bundlers and shared sequencers to neutralize MEV.

• Trusted Execution (TEE): Bundlers in secure enclaves cannot see or reorder plaintext UserOps.
• Shared Sequencing: Decouples ordering from any single chain, enabling cross-rollup MEV resistance.
• Verifiable Delay: Introduces latency to prevent time-based exploits, a trade-off for privacy.

The ultimate measure of AA's success is the shift from Maximal Extractable Value (MEV) to Maximal Usable Value (MUV) returned to users and dApps.

• User Rebates: Direct refunds from Bundler/Solver profits via Paymaster logic.
• Protocol Revenue: MEV captured as sustainable treasury income for AA infrastructure.
• Net Negative MEV: The ideal state where user gains from competition exceed losses to extraction.