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wallet-wars-smart-accounts-vs-embedded-wallets
Blog

Why the 'Sign-In With Ethereum' Model Is Fundamentally Broken

SIWE's core flaw is conflating authentication (proving identity) with authorization (controlling actions). This creates a dangerous security gap where a single signature grants unlimited, silent access, a problem solved by smart accounts and session keys.

introduction
THE AUTHENTICATION FLAW

The Deceptive Simplicity of a Signature

The 'Sign-In With Ethereum' model fails because it treats a cryptographic signature as a complete identity solution, ignoring the complexities of session management, key security, and user intent.

Sign-In With Ethereum (SIWE) conflates authentication with authorization. A signature proves key ownership, not user intent for a specific session. This creates a session management vacuum where applications must build their own stateful security layers, defeating the purpose of a standard.

Private key security is a user problem, not a protocol one. SIWE shifts the entire burden of account recovery and key custody onto users, unlike mature Web2 OAuth flows managed by Google or Apple. This results in catastrophic, irreversible loss for non-technical users.

The signature is a one-time proof, not a persistent identity. It lacks the revocable session tokens and granular permissions of OAuth 2.0. Every interaction requiring a fresh signature creates a poor UX, as seen in early dApp wallets, forcing constant pop-ups.

Evidence: The ERC-4337 Account Abstraction standard emerged precisely to solve these flaws. Projects like Safe{Wallet} and ZeroDev implement session keys and social recovery, proving that raw EOA signatures are insufficient for mainstream authentication.

deep-dive
THE ARCHITECTURAL FLAW

Authentication ≠ Authorization: The Great Conflation

The 'Sign-In With Ethereum' (SIWE) model conflates identity verification with access control, creating systemic security and user experience failures.

SIWE is not a permission system. It proves wallet ownership, a single authentication event. Modern applications require dynamic, granular authorization—who can do what, for how long. This mismatch forces developers into insecure workarounds like storing mutable permissions off-chain.

The conflation breaks composability. An authenticated session from Uniswap cannot securely authorize a governance vote on Aave. Each dApp rebuilds its own brittle authorization layer, fragmenting user identity and security models across the ecosystem.

ERC-4337 Account Abstraction exposes the flaw. Smart accounts like those from Safe or Biconomy natively separate signer keys from the account's rule engine. This architecture makes SIWE's static key-based model obsolete for session management.

Evidence: The proliferation of off-chain attestation services like EAS and Verax proves the market demand. These systems exist to patch SIWE's authorization gap, creating verifiable credentials that dApps must still manually interpret and enforce.

WHY SIWE IS A DEAD END

The Security Spectrum: EOAs vs. SIWE vs. Smart Accounts

A first-principles comparison of user account models, exposing the fundamental architectural flaws in Sign-In With Ethereum (SIWE) for on-chain security.

Security & UX DimensionEOA (Externally Owned Account)SIWE (Sign-In With Ethereum)Smart Account (ERC-4337 / AA)

Account Abstraction Core

Transaction Sponsorship (Gasless)

Native Multi-Sig / Social Recovery

Atomic Batch Transactions

Key Rotation Without Migration

On-Chain Intent Execution

Phishing Surface Area

Single private key

Session key + off-chain service

Modular, policy-based

Protocol-Level Fee Payment

ETH only

ERC-20 via relayer

Any token via Paymaster

Post-Quantum Security Path

None (ECDSA)

None (Relies on ECDSA)

Upgradable (ZK, MPC modules)

counter-argument
THE MISCONCEPTION

The Steelman: "But It's Just a Login!"

The 'Sign-In With Ethereum' model is a UX Trojan horse that fails to deliver on its core promise of user sovereignty.

It's a key, not a passport. SIWE authenticates a wallet address, not a user's identity or reputation. This creates a cold-start problem for every new application, forcing users to rebuild their social graph and trust from zero on each site.

The session is the vulnerability. SIWE's reliance on ephemeral signatures for session management is fundamentally insecure. A single phishing attack or malicious dApp can drain assets, unlike OAuth's scoped, revocable permissions used by Google or Apple.

It ignores the social layer. Real-world identity requires attestations from verifiable credentials (like Ethereum Attestation Service) or social proofs (like ENS with Proof of Humanity). SIWE alone provides none of this, making it useless for credit, governance, or compliance.

Evidence: The failure of Web3 social platforms like Lens Protocol to achieve mainstream adoption stems from this identity gap. Users cannot port their Twitter followers; they port an empty cryptographic address.

takeaways
BEYOND SIWE

The Path Forward: Key Takeaways for Builders

The 'Sign-In With Ethereum' model fails because it treats wallets as glorified password managers, ignoring the power of programmability and user intent.

01

The Problem: Wallets as Passive Gatekeepers

SIWE reduces the wallet to a simple signer, creating a user-hostile experience. Every action requires a new signature, leading to pop-up fatigue and transaction abandonment.

  • User Drop-Off: Each signature request loses ~30% of users.
  • No Session Management: Forces re-authentication for every micro-interaction.
  • Missed Context: The wallet has no insight into user goals, only raw transaction data.
~30%
Drop-Off Per Pop-up
0
Session Context
02

The Solution: Intent-Based Architectures

Shift from signing transactions to declaring outcomes. Let users express what they want (e.g., 'swap ETH for USDC at best rate'), not how to do it. Systems like UniswapX, CowSwap, and Across solve this.

  • User Declares Goal: Signs a single, high-level intent.
  • Solvers Compete: Off-chain networks find optimal execution, abstracting gas and complexity.
  • One Signature, Many Actions: Bundle complex cross-chain swaps or multi-step DeFi actions.
1
User Signature
10x+
UX Simplicity
03

The Problem: The Privacy Paradox

SIWE creates a permanent, on-chain link between your wallet address and every service you use. This enables full behavioral tracking and profiling across dApps.

  • Permanent Correlation: Your ENS name or address becomes a universal tracker.
  • No Selective Disclosure: Can't prove a credential (e.g., 'over 18') without revealing your entire identity.
  • Contradicts Web3 Ethos: Replaces opaque corporate databases with a public, immutable ledger of your activity.
100%
Public Correlation
0
Selective Disclosure
04

The Solution: Zero-Knowledge Identity Primitives

Use ZK proofs to verify attributes or membership without exposing the source. Projects like Sismo, Worldcoin, and zkEmail are pioneering this.

  • Prove, Don't Reveal: Verify you hold an NFT or are human without doxxing your wallet.
  • Session Keys with Conditions: Grant temporary, scoped permissions (e.g., 'this dApp can move up to 0.1 ETH for 24 hours').
  • Break the Correlation: Use stealth addresses or ZK-based identity containers for each service.
ZK Proof
For Verification
0
Data Leaked
05

The Problem: Centralized Reliance & Censorship

Most SIWE implementations depend on centralized relayers or RPC providers to forward signatures. This reintroduces single points of failure and censorship.

  • RPC Bottleneck: Infura/Alchemy can censor or degrade service.
  • Relayer Risk: The service you're signing into controls transaction submission.
  • Fragile Stack: Defeats the purpose of decentralized identity with centralized infrastructure.
1
Central Point
High
Censorship Risk
06

The Solution: Decentralized Signing Networks & Account Abstraction

Leverage smart accounts (ERC-4337) and peer-to-peer signing networks. Let users pay fees in any token via paymasters and use social recovery.

  • Smart Accounts (ERC-4337): Enable batched transactions, sponsored gas, and key rotation.
  • P2P Networks: Use protocols like Waku or libp2p for decentralized message relay.
  • Sovereign Execution: User's intent is fulfilled by a permissionless network of solvers, not a single relayer.
ERC-4337
Smart Account Std
Permissionless
Solver Network
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Why Sign-In With Ethereum Is Fundamentally Broken | ChainScore Blog