MEV Cascades in Smart Account Ecosystems

A bundler's paymaster transaction can be front-run to steal its gas sponsorship or alter validation logic. This breaks the atomicity of the user operation, creating a race condition for the entire bundle.

• Attack Vector: Pre-state dependency in paymaster validatePaymasterUserOp.
• Cascade Effect: Failed sponsorship cascades to all dependent user ops in the mempool.
• Entity Example: Pimlico's Verifying Paymaster is a prime target due to its on-chain validation.

Intent-based solvers (like those in UniswapX or CowSwap) post solution transactions that reveal profitable arbitrage. Searchers can snipe this liquidity before the solver's tx lands.

• Attack Vector: Time delay between off-chain solution discovery and on-chain execution.
• Cascade Effect: Failed solver tx cascades to all user intents in the batch, forcing re-solution.
• Systemic Risk: Centralizes solver infrastructure to mitigate latency, defeating decentralization goals.

Smart accounts using cross-chain state proofs (e.g., for gasless tx on L2 via L1 balance) create a fragile oracle dependency. A delayed or reorged proof on the destination chain invalidates the atomic bundle.

• Attack Vector: LayerZero, Chainlink CCIP, or native bridge message delays.
• Cascade Effect: A single delayed state proof can brick hundreds of pending user operations.
• Mitigation: Requires synchronous cross-chain protocols, which don't exist at scale.

Paymasters are the new centralized point of failure. A single compromised or malicious paymaster can trigger a cascade of liquidations and failed transactions across thousands of accounts it sponsors.

• Solvency attacks can drain pooled funds.
• Censorship by a dominant paymaster can brick user operations.
• Creates a too-big-to-fail dynamic contrary to decentralization.

Decouple transaction construction from execution to obscure intent and prevent frontrunning. This moves the system from a predictable state-based model to a goal-based one.

• Use UniswapX or CowSwap-style solvers for DEX trades.
• Route sensitive operations through Flashbots SUAVE or RIP-7212 private RPCs.
• This neutralizes the most extractable, predictable MEV that cascades target.

Bundlers (like Stackup, Alchemy, Pimlico) are the new block builders. Their opaque, off-chain bundling logic is a prime target for time-bandit attacks and transaction reordering, creating unpredictable outcomes for dependent smart accounts.

• Lack of credible neutrality in the bundling process.
• Cross-bundle MEV where one bundle's outcome influences another's profitability.
• No standardized MEV redistribution (like PBS) to users.

Formalize the separation between the entity that creates a bundle (Builder) and the entity that includes it (Validator). This is the ERC-4337 equivalent of Ethereum's PBS.

• Enables competitive bidding for bundle space, capturing value.
• Allows for MEV smoothing and redistribution back to smart accounts via ERC-4337's paymaster or aggregator.
• Makes bundle inclusion verifiably neutral and auditable.

Smart accounts enable complex, multi-contract actions in a single user operation. This atomicity, while a feature, allows a failure in one step to poison the entire transaction, creating perfect conditions for Denial-of-Service (DoS) extortion and cascading reverts.

• Attackers can frontrun with a revert to block legitimate ops.
• Gas estimation becomes highly unpredictable, leading to widespread failures.
• Increases the attack surface for state-based logic bugs.

Design account logic to be resilient to partial failure. Use patterns like ERC-7579 modular accounts to isolate critical components and enable fallback execution paths.

• Implement circuit breakers for dependent external calls.
• Use keeper networks like Gelato or Chainlink Automation for retry logic on non-atomic steps.
• Reduces the blast radius of any single failed component.