Why Smart Account Interoperability is a Governance Nightmare

ERC-4337 is a specification, not an implementation. Bundlers and Paymasters from Stackup, Alchemy, and Biconomy are not inherently compatible. This forces dApp developers to choose a vendor, fragmenting liquidity and user experience.

• Vendor Lock-in Risk: Dependence on a single bundler's mempool.
• Inconsistent Gas Policies: Paymaster subsidies differ per provider.
• Fragmented State: UserOps may not propagate across all networks.

The entity sponsoring gas fees (Paymaster) holds ultimate power. They can censor transactions, extract value via opaque fee models, or become a central point of failure. This recreates the bank-led permissioning ERC-4337 aimed to solve.

• Centralized Gatekeeping: A dominant Paymaster can blacklist addresses.
• Economic Capture: Opaque fee models extract rent from user flows.
• Systemic Risk: A failed Paymaster bricks all dependent accounts.

The fix is a neutral, permissionless public mempool for UserOperations, akin to Ethereum's tx pool. Projects like Ethereum's P2P mempool extension and RISC Zero's zkVM verifiers are exploring this. This decouples bundling from execution and prevents censorship.

• Neutral Ground: Any bundler can pick up any UserOp.
• Censorship Resistance: No single entity controls transaction flow.
• Market Efficiency: Competition between bundlers drives down costs.

Move beyond low-level UserOp execution to a higher-level intent standard. Let users declare what they want (e.g., 'swap X for Y at best price'), not how to do it. Systems like UniswapX, CowSwap, and Across prove this model works for swaps and bridges.

• User-Centric: Abstracts away implementation complexity.
• Best Execution: Solvers compete to fulfill the intent optimally.
• Composable: Intents can be nested and batched across domains.

A smart account on Ethereum cannot natively control assets on Arbitrum or Base. Each chain requires a separate account deployment and key management, destroying the unified user experience. Bridging assets between account instances adds latency, cost, and security risk.

• Siloed Identities: User has a different 'address' on every chain.
• Bridge Risk: Moving funds between account instances introduces new trust assumptions.
• State Fragmentation: Session keys or social recovery settings are not synchronized.

A cross-chain smart account protocol that uses a canonical root on Ethereum (like EigenLayer AVS or a Cosmos hub) to manage state and permissions for derivative accounts on any VM. This mirrors how LayerZero and CCIP abstract messaging, but for account logic.

• Single Source of Truth: Root contract manages all chain instances.
• Atomic Cross-Chain Actions: Execute transactions across chains in one intent.
• Unified Recovery: Social recovery or key rotation applies globally.

A governance proposal to upgrade a core smart account module (e.g., a signature scheme) passes on Ethereum but is rejected on Arbitrum. This creates a hard fork in account logic, fragmenting user identity and breaking cross-chain applications.

• Splits user base across incompatible account standards.
• Forces dApps to maintain multiple client implementations.
• Creates arbitrage opportunities from state inconsistencies.

A dominant rollup sequencer (e.g., Arbitrum, Optimism) modifies its EntryPoint contract to favor its native token for gas or impose extra fees, holding user transactions hostage. This recreates the validator extractable value (VEV) problem at the account abstraction layer.

• Extracts rent from all smart accounts on that chain.
• Creates a single point of failure for account operations.
• Undermines the permissionless ethos of the underlying L1.

A widely used cross-chain paymaster (e.g., Biconomy, Pimlico) suffers a compromise or malicious upgrade. Because paymasters sponsor gas, a breach allows an attacker to drain sponsored gas allowances or front-run user operations across every integrated chain simultaneously.

• Systemic risk scales with paymaster adoption.
• Cross-chain contagion via a single contract.
• Audit and upgrade cycles become a critical path dependency for ecosystem security.

Ethereum's ERC-4337 standard competes with L2-native account abstraction (e.g., StarkNet, zkSync). This creates a standards war where dApps must choose a side, fracturing developer mindshare and forcing users into walled gardens based on their account type.

• Fragments liquidity and composability.
• Duplicates R&D effort across competing stacks.
• User experience becomes chain-dependent, not universal.

A centralized 'blessed' registry for smart account modules (recovery, session keys) emerges, controlled by a foundation or DAO. It becomes a de facto app store, deciding which innovations reach users and extracting fees, stifling permissionless experimentation.

• Centralizes innovation and creates a review bottleneck.
• Introduces political attack vectors for module approval.
• Recreates the Web2 platform tax model.

A user's smart account executes a batched operation across Ethereum, Polygon, and Base. One chain succeeds, two fail due to congestion. The account is now in an inconsistent state with partial executions, requiring complex, manual recovery logic that may not exist.

• Breaks atomicity guarantees for cross-chain intents.
• Exposes users to stranded assets and unrecoverable states.
• Makes cross-chain transaction simulation nearly impossible.

The battle between modular (ERC-6900) and monolithic (ERC-4337) account logic creates incompatible security models. Protocols must now govern and audit for both, doubling attack surfaces and fragmenting user onboarding.

• Key Risk: A vulnerability in a popular modular plugin (e.g., a social recovery module) becomes a systemic risk.
• Key Cost: Maintaining dual integration paths for Bundler and Validator networks.

Smart accounts don't natively travel. Moving a Safe{Wallet} from Arbitrum to Base requires re-deployment, fracturing identity and governance state. This breaks DAO tooling and forces protocols to manage chain-specific governance contracts.

• Key Problem: A user's voting power and delegated stakes are siloed per chain.
• Key Limitation: LayerZero and Axelar messages can't port a full account state, only assets.

ERC-4337 Bundlers are inevitable MEV hotspots. Without a decentralized, credibly neutral network like Ethereum's base layer, a few dominant players (e.g., Stackup, Alchemy) could censor or front-run user operations, corrupting governance votes and treasury management.

• Key Threat: A Bundler cartel delays or reorders governance proposal transactions.
• Key Metric: ~80% of UserOps could be routed through <3 major providers.

Who governs the plugins that govern the wallet? A smart account using a Zodiac module for Gnosis Safe introduces a recursive governance problem. Protocol treasuries are now exposed to the security council of a third-party plugin they don't control.

• Key Vulnerability: A malicious plugin upgrade can drain all integrated accounts.
• Key Complexity: Multi-sig thresholds must be managed across account and plugin layers.

Paymasters allowing fee payment in ERC-20 tokens abstract gas but obscure true costs and create subsidy dependencies. A protocol subsidizing votes via a Paymaster faces unpredictable bills and attack vectors via gas price manipulation.

• Key Risk: Sybil attackers drain subsidy contracts with spam transactions.
• Key Cost: $10M+ TVL protocols must budget for unknown gas liability.

The only exit is to ruthlessly advocate for ERC-6900 as the core, treat plugins as untrusted peripherals, and build protocol governance around account abstraction-agnostic primitives. Use EIP-5003 (rentable accounts) for migration and design for state-less verification.

• Key Action: Lobby for Ethereum Foundation to bless a single modular standard.
• Key Design: Anchor governance on chain-agnostic identifiers (e.g., ENS) not contract addresses.