Gas abstraction kills wallets. Traditional wallets like MetaMask require users to hold the native gas token for every chain, creating a fragmented and hostile onboarding experience. User operation bundling, as defined by ERC-4337, separates the payment of transaction fees from the user's wallet, enabling sponsorship and paymaster systems.
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Blog
Why User Operation Bundling Is the End of Gas Token Wallets
Native gas sponsorship and ERC-20 fee payment within ERC-4337 bundles eliminate the need for users to hold a separate gas token, rendering dedicated gas token wallets a legacy architecture.
introduction
THE END OF AN ERA
Introduction
User operation bundling is a fundamental architectural shift that makes gas token wallets obsolete.
The bundler is the new wallet. The critical infrastructure is no longer the user's key store but the network of bundlers (like Stackup, Alchemy, Pimlico) that batch and submit operations. This shifts the competitive landscape from wallet UX to bundler reliability and paymaster economics.
Evidence: The Ethereum mainnet processes over 200,000 user operations monthly via this stack, with protocols like Friend.tech and Base's Onchain Summer defaulting to gasless experiences. The wallet is becoming a signature generator, not a payment instrument.
thesis-statement
THE UX FAILURE
The Core Argument: Gas Tokens Are a UX Bug
Native gas token management is a fundamental design flaw that user operation bundling directly solves.
Gas tokens are a UX bug because they force users to pre-fund wallets with a specific asset for a generic resource. This creates friction, fragmentation, and security risk for every new chain interaction.
User operation bundling eliminates this by abstracting the payer. Protocols like Ethereum's ERC-4337 and Solana's versioned transactions allow a third-party bundler to pay fees in the chain's native token, while the user pays in any asset.
This renders dedicated gas token wallets obsolete. Wallets like MetaMask with its gas tank feature or Rabby Wallet become intermediaries for a problem that disappears at the protocol layer.
Evidence: The success of UniswapX and Across's intents demonstrates users prefer abstracted execution. Bundling extends this abstraction to the transaction's foundational cost.
key-trends
THE INTENT-CENTRIC SHIFT
The Three Trends Killing Gas Token Wallets
The direct management of gas tokens is becoming a UX relic, obsoleted by new architectural paradigms.
01
The Problem: Intent-Based Architectures
Users don't want to manage gas; they want an outcome. UniswapX, CowSwap, and Across abstract the execution layer entirely, letting users sign intents (e.g., 'swap X for Y') while solvers compete to fulfill them. The winning solver pays the gas.
- User never holds native gas token
- Solver competition drives cost efficiency
- Enables cross-chain actions without bridging
0
Gas Tokens Held
Multi-Chain
Execution
02
The Solution: Paymaster Proliferation
ERC-4337 Account Abstraction delegates gas payment to third-party paymasters. Users can pay with ERC-20 tokens, have sponsors cover fees, or use novel systems like gas credits.
- Sponsor transactions for onboarding (e.g., Stackup, Biconomy)
- Pay with any token (USDC, ETH, etc.)
- Session keys enable gasless UX for dApps
ERC-4337
Standard
100%
ERC-20 Compatible
03
The Enforcer: User Operation Bundling
Bundlers aggregate UserOps from smart accounts, creating economies of scale. They use MEV-aware algorithms and private mempools (like Flashbots SUAVE) to optimize execution and subsidize costs.
- Batch processing reduces overhead per operation
- MEV capture can fund user subsidies
- Creates a professionalized gas market separate from the user
~30%
Cost Reduction
MEV-Aware
Optimization
deep-dive
THE ARCHITECTURAL SHIFT
Mechanics of Obsolescence: How Bundling Works
Bundling abstracts gas management from the user, making the direct ownership of a gas token wallet an unnecessary and inefficient relic.
User Operation Bundling abstracts gas. The ERC-4337 standard introduces a new transaction object, the UserOperation, which is submitted by a User to a global mempool. A specialized actor, the Bundler, packages these operations, pays for their execution on-chain in the native token, and charges the user in any asset via a Paymaster. The user's wallet address is now just a logical endpoint, not a funded Ethereum account.
Bundlers are the new liquidity layer. This creates a competitive market for transaction inclusion, similar to MEV searchers on Flashbots. Bundlers profit from efficient bundling and Paymaster subsidies, not user gas overpayments. Wallets like Safe{Wallet} and Coinbase Smart Wallet now default to this model, rendering the act of manually acquiring and managing ETH for gas a user-hostile anachronism.
The Paymaster enables asset abstraction. The killer feature is paying fees in the token you're using. A user swaps USDC on Uniswap and pays the network fee from that same USDC stream via a Paymaster contract. This eliminates the gas token premium and onboarding friction, a direct attack on the utility of holding base-layer tokens solely for fees.
Evidence: Adoption is vertical. Since its inception, ERC-4337 has facilitated over 5 million UserOperations. Account Abstraction-powered wallets now dominate new smart contract wallet creation, with infrastructure from Stackup, Alchemy, and Biconomy making bundler services a commodity. The network effect is irreversible.
THE END OF GAS TOKENS
Architectural Showdown: Gas Wallet vs. Bundled Smart Account
A first-principles comparison of two dominant models for abstracting gas fees, highlighting why user operation bundling is a systemic upgrade.
| Architectural Metric | Gas Wallet (e.g., Gas Station Network) | Bundled Smart Account (e.g., ERC-4337, Safe{Core}) | Why Bundling Wins |
|---|---|---|---|
Core Abstraction Layer | Relayer Network | Bundler Network & Paymaster | Decouples payment from execution, enabling any token |
User Pre-Funding Requirement | Native gas token only | Any ERC-20 token or sponsored | Eliminates the need for a base-layer gas balance |
Transaction Atomicity | Bundler ensures entire UserOp succeeds or fails, preventing partial execution | ||
Max Theoretical TPS per UserOp | ~45 (Ethereum mainnet block gas limit) | ~1000+ (via aggregation in mempool) | Bundlers can pack multiple ops, amortizing overhead |
Fee Market Complexity | Direct gas auction (EIP-1559) | Structured auction (priority fee + bundler tip) | Enables sophisticated fee logic and sponsor subsidies |
Protocol-Level MEV Surface | High (relayer can frontrun/censor) | Mitigated (permissionless bundler set, reputation) | Distributes trust and reduces centralized extractive risk |
Smart Account Dependency | false (works with EOAs) | true (requires ERC-4337-compatible account) | Forces a migration to more secure, programmable accounts |
Typical Fee Premium for Abstraction | 5-15% + relay fee | 2-5% (bundler profit margin) | Lower overhead due to pure economic incentive vs. operational cost |
protocol-spotlight
INTENT-BASED INFRASTRUCTURE
Who's Building the Post-Gas-Token Future
The shift from gas token wallets to User Operation (UserOp) bundlers abstracts away transaction mechanics, enabling a new paradigm of user experience and economic efficiency.
01
The Problem: Wallets as a UX Bottleneck
Native wallets force users to manage gas tokens, sign every transaction, and navigate complex RPC endpoints. This creates friction for ~90% of non-technical users and fragments liquidity across chains.\n- Manual Execution: Users must sign and pay for each atomic action.\n- Chain-Specific Gas: Requires holding native tokens for every network.
90%
Friction
10+
Tokens Held
02
The Solution: ERC-4337 & Bundlers
ERC-4337 introduces a mempool for User Operations, decoupling transaction intent from execution. Bundlers (like Stackup, Alchemy, Pimlico) package UserOps, sponsor gas, and handle chain-specific logic.\n- Paymaster Abstraction: Users pay fees in any token via sponsored transactions.\n- Atomic Multi-Ops: Complex intents (swap + bridge) execute as a single, guaranteed bundle.
~500ms
Bundling Speed
-70%
Gas Cost
03
The Aggregator: UniswapX & CowSwap
Intent-based DEX aggregators like UniswapX and CowSwap are early adopters, acting as specialized bundlers. They outsource order routing to a network of solvers who compete to fulfill user intents at the best rate.\n- Gasless Trading: Solvers absorb gas costs, priced into the trade.\n- MEV Protection: Batch auctions and private mempools mitigate frontrunning.
$10B+
Volume
0 Gas
User Cost
04
The Cross-Chain Future: Across & LayerZero
Cross-chain intents are the logical endpoint. Protocols like Across (using UMA's Optimistic Oracle) and LayerZero's DVN network act as cross-chain bundlers, fulfilling intents that span multiple domains.\n- Unified Liquidity: Single asset pool used across all connected chains.\n- Guaranteed Settlement: Cryptographic proofs or economic guarantees ensure cross-chain execution.
15+
Chains
<2 min
Settlement
05
The Economic Shift: From Users to Solvers
Gas costs shift from end-users to professional solvers and bundlers, who optimize execution for profit. This creates a competitive execution market similar to high-frequency trading.\n- Efficiency Extraction: Solvers profit from MEV and bundling efficiency, reducing net user cost.\n- Stake-for-Access: Solvers often stake bonds (e.g., in Espresso Systems sequencing) for the right to bundle.
$100M+
Solver Revenue
>50%
Efficiency Gain
06
The Endgame: Wallets as Intent Orchestrators
Wallets like Safe{Wallet} and Rabby evolve from signers to intent orchestrators. They generate UserOps, select optimal bundlers/paymasters via APIs from Pimlico or Stackup, and guarantee outcome.\n- Plug-in Architecture: Modular security (multisig, 2FA) and execution modules.\n- Session Keys: Users pre-approve intent parameters for seamless, batched interactions.
1-Click
Complex Tx
Zero-Knowledge
Privacy
counter-argument
THE INCENTIVE MISMATCH
The Bear Case: Why Gas Tokens Might Linger
User operation bundling eliminates the need for users to hold gas tokens, but economic and technical inertia will delay their obsolescence.
Gas token liquidity is entrenched. Projects like EIP-4337 and ERC-4337 account abstraction wallets (e.g., Safe{Wallet}) require bundlers to pay gas fees. These bundlers must hold native tokens on every chain they operate on, creating a massive, sticky demand layer for ETH, MATIC, and AVAX.
Bundlers are profit-maximizing entities. Services like Stackup, Alchemy, and Pimlico compete on bundler fees and efficiency. Their business models depend on arbitraging gas prices and MEV, not on eliminating the underlying asset. They are sophisticated gas token holders, not replacements.
Cross-chain intent systems rely on them. For a user to execute a cross-chain swap via UniswapX or CowSwap, the solver's final settlement on the destination chain requires the native gas token. LayerZero and Axelar messages are gas-paid on arrival. The gas token is the universal settlement layer.
Evidence: Ethereum's base fee burn and Arbitrum's sequencer revenue models are billion-dollar systems built on gas token consumption. Bundling abstracts the user experience, but the economic foundation remains unchanged.
risk-analysis
THE END OF GAS TOKEN WALLETS
New Risks in a Gas-Abstracted World
ERC-4337 and Paymasters abstract gas, but the bundling layer introduces new centralization vectors and systemic risks.
01
The Bundler as a Single Point of Failure
User operations are not transactions until a bundler picks them up. This creates a new, centralized choke point for censorship and MEV extraction.
- No Direct Inclusion: Users cannot force their ops onto the base layer.
- Bundler Monopolies: Top bundlers like Stackup and Alchemy dominate, risking network liveness.
- MEV Re-Ordering: Bundlers can front-run or sandwich user ops for profit.
>70%
Market Share
0s
User Leverage
02
Paymaster Solvency is a Systemic Risk
Paymasters sponsor gas fees, but their off-chain credit systems and on-chain deposits create cascading failure modes.
- Credit Default: A major paymaster (e.g., Biconomy, Candide) going offline bricks all dependent accounts.
- Deposit Drain: Malicious ops can be crafted to drain a paymaster's staked deposit, causing mass transaction reversion.
- Oracle Reliance: Fiat-denominated gas requires price oracles, adding another external dependency.
$10M+
Stake at Risk
1
Oracle Failure
03
Intent-Based Architectures Inevitable
The bundler problem makes the shift from transaction-based to intent-based systems like UniswapX and CowSwap unavoidable. Users declare outcomes, solvers compete.
- Competitive Execution: Solver networks (e.g., Across, Anoma) reduce reliance on a single bundler.
- Better Price Discovery: Auction-based models improve UX and reduce extracted MEV.
- Protocols Become Bundlers: L2s and apps will internalize bundling to control the stack.
~500ms
Solver Latency
-90%
Failed Txs
04
The New Wallet Stack is a MEV Supply Chain
Account abstraction doesn't eliminate MEV; it formalizes it into a supply chain of searchers, bundlers, and builders.
- Searcher-Bundler Collusion: Tight integration (e.g., Flashbots SUAVE) creates opaque order flow auctions.
- Wallet as a Business: Wallets must monetize via order flow, not gas tokens, aligning with Robinhood's model.
- Regulatory Target: This centralized order flow is a clear target for SEC action on front-running.
$1B+
Extractable Value
3
Layers of Rent
future-outlook
THE END OF GAS WALLETS
The 24-Month Outlook: Wallets as Intent Orchestrators
User operation bundling abstracts gas and execution complexity, making native token wallets obsolete.
Gas abstraction kills token wallets. Users will not hold native tokens for gas. Wallets like Safe{Wallet} and Coinbase Smart Wallet already sponsor gas via paymasters, letting users pay with any asset. The wallet's role shifts from fund custody to intent expression.
Bundlers are the new RPC endpoint. The ERC-4337 bundler is the system's workhorse, converting user intents into executable on-chain transactions. This creates a competitive market for bundlers like Stackup and Pimlico, who optimize for speed and cost, similar to MEV searchers.
Wallets become intent marketplaces. The frontend aggregates solvers, similar to UniswapX or CowSwap. A user's 'swap' intent is auctioned to a network of solvers who compete to fulfill it via the optimal route across Across, Stargate, or 1inch.
Evidence: 99% of Safe transactions are sponsored. Data from Safe shows users overwhelmingly choose gasless experiences. This adoption curve mirrors the shift from direct RPC calls to MetaMask Snaps for broader functionality, signaling demand for abstraction.
takeaways
THE END OF GAS TOKEN WALLETS
TL;DR for CTOs & Architects
User operation bundling abstracts gas and execution complexity, making native token wallets a UX and operational liability.
01
The Problem: Gas Abstraction is a Feature, Not a Product
Wallets requiring native tokens for gas (ETH, MATIC) create massive onboarding friction and fragment liquidity. The real product is seamless user intent execution.
- User Drop-off: >60% at first transaction due to gas complexity.
- Liquidity Silos: Users must hold different tokens per chain, tying up ~$30B+ in non-productive gas reserves.
- Competitive Disadvantage: Apps like dYdX v4 or Friend.tech clones that bake in gas abstraction will win.
>60%
Drop-off
$30B+
Locked in Gas
02
The Solution: Bundlers as the New Transaction Layer
ERC-4337 bundlers (like Stackup, Alchemy, Pimlico) batch user ops, sponsor gas, and enable paymasters. This shifts the economic model from user-held gas to app-subsidized or fee-abstracted sessions.
- Cost Efficiency: Batch processing cuts L1 gas costs by ~30-40% vs. individual txs.
- Session Keys: Enable ~500ms UX for sequences of actions (gaming, trading).
- Business Model: Apps pay pennies for acquisition, users pay zero upfront.
30-40%
Gas Saved
~500ms
Session UX
03
The Architecture: Smart Accounts & Intent Standards
Smart Accounts (ERC-4337) + Intents (UniswapX, CowSwap) decouple signing from execution. The wallet becomes a key manager, not a gas broker.
- Modular Security: Social recovery, hardware modules via Safe{Core}.
- Intent Flow: User signs "what" (swap X for Y), bundler/MEV searcher figures out "how".
- Interop Play: This stack works across any EVM chain or intent-centric network (like Anoma).
ERC-4337
Standard
Safe{Core}
Stack
04
The Consequence: Wallets Become OS Modules
The frontend wallet (Rainbow, MetaMask) is demoted to a signature interface. The real infrastructure is the bundler network and smart account SDKs.
- Distribution Shift: Wallet growth will hinge on integration depth with bundler APIs, not token swaps.
- VC Reality Check: Valuations based on wallet installs are obsolete; value accrues to infra (Pimlico) and apps.
- New Attack Surface: Centralization risk in ~5-10 major bundler nodes requires decentralized bundler networks.
5-10
Major Bundlers
Infra
Value Accrual
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