Smart accounts centralize developer power by abstracting user keys into programmable logic. This transfers sovereignty from the individual's private key to the code and the entities that deploy it, creating new centralization vectors at the protocol and bundler layers.
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Why Smart Accounts Will Centralize Developer Power
The battle for the smart account SDK layer will define the next era of crypto UX. This analysis argues that infrastructure teams like Biconomy and Stackup, not wallet frontends, will become the new gatekeepers by controlling the developer experience.
introduction
THE ARCHITECTURAL SHIFT
Introduction
Smart accounts shift power from users to the developers who control the account logic and infrastructure.
The bundler is the new validator. Unlike a simple EOA transaction, a smart account's user operation must be processed by a network like Ethereum's ERC-4337 bundlers or Starknet's sequencers. This creates a mandatory, rent-extractive intermediary layer controlled by a few node operators.
Account abstraction enables protocol lock-in. Wallets like Safe{Wallet} and Argent dictate the feature set and upgrade paths. Cross-chain intents via UniswapX or Across are executed by their designated solvers, not user-selected validators.
Evidence: Over 90% of ERC-4337 bundles are processed by just two providers, Pimlico and Alchemy, demonstrating immediate infrastructural centralization from this model.
thesis-statement
THE POWER SHIFT
The Core Argument: SDKs Are the New Moats
Smart account adoption will centralize developer power in the SDK providers, not the underlying blockchains.
Smart accounts shift power to SDKs. The user experience and functionality of an ERC-4337 account are defined by its Bundler and Paymaster, not the L1/L2 it's deployed on. The entity controlling the account abstraction SDK (like Starknet's Account Abstraction or Biconomy's SDK) dictates the user's on-chain reality.
Interoperability creates vendor lock-in. A wallet built on Safe's Core SDK or ZeroDev's Kernel inherits its gas sponsorship logic and signature schemes. Migrating users between these stacks is a protocol-level migration, not a simple key export. This creates deep, infrastructural moats.
Evidence: The Bundler as a choke point. The Pimlico paymaster and Alchemy's Bundler service demonstrate that relayer infrastructure is the critical path. Whoever optimizes and subsidizes this path captures the application layer, making the base chain a commodity.
market-context
THE INFRASTRUCTURE LAYER
The Current Battleground: Key Smart Account SDKs
The SDK is the new middleware, dictating user experience, security models, and ultimately, developer lock-in.
01
The ZeroDev Kernel: The Modular Purist
A minimalist, audited smart account kernel that forces developers to choose their own signature scheme, paymaster, and bundler. This creates ultimate flexibility but shifts integration burden onto the app team.\n- ERC-7579 compliant, enabling account modularity\n- Gas abstraction via native integration with Pimlico, Stackup, and Alchemy\n- ~$0.01 average sponsorship cost per user session
ERC-7579
Standard
Modular
Architecture
02
The Stackup Bundler: The Vertical Integrator
Stackup bundles the entire stack—bundler, paymaster, and RPC—into a single service, abstracting complexity for developers. This creates a seamless on-ramp but risks vendor lock-in to their economic and technical layer.\n- Dominant market share in bundler services with ~60% of UserOps\n- Pay-as-you-go gas sponsorship with fiat on-ramps\n- Sub-second latency for UserOp inclusion
~60%
Market Share
Vertical
Stack
03
The Pimlico Paymaster: The Economic Gatekeeper
Pimlico doesn't build accounts; it powers them by controlling the gas economics. Their paymaster-as-a-service dictates which tokens are spendable and subsidizes onboarding, making them a critical dependency for any app seeking users.\n- ERC-20 gas sponsorship enabling token-native UX\n- Integrates with every major SDK (ZeroDev, Biconomy, Rhinestone)\n- Manages ~$50M+ in deposited gas funds for clients
ERC-20 Gas
Sponsorship
Critical Dep
Dependency
04
The Biconomy Hyphen: The All-in-One Suite
Biconomy offers a monolithic, proprietary SDK that bundles account, bundler, paymaster, and relay services. It's the fastest path to market but creates complete dependency on their closed ecosystem and fee structure.\n- Proprietary multi-chain intent engine for cross-chain actions\n- ~10M+ smart accounts created through their SDK\n- High abstraction at the cost of protocol-level control
10M+
Accounts
Monolithic
Suite
FEATURED SNIPPETS
The Centralization Vector: Control Points in Smart Account SDKs
Comparison of critical control points that determine who governs user accounts, transaction flow, and protocol upgrades across major smart account SDKs.
| Control Point | AA-SDK (ERC-4337) | Safe{Core} SDK | ZeroDev Kernel |
|---|---|---|---|
Bundler Client Lock-in | |||
Paymaster Dependency | Required for gas sponsorship | Optional (Self-custody) | Required for gas sponsorship |
Account Upgrade Authority | Developer via EntryPoint | SafeDAO Multi-sig | Developer via Kernel Factory |
Default Signer Scheme | Single EOA (Secp256k1) | Multi-sig (Gnosis Safe) | Passkeys (WebAuthn) |
On-chain Dependency Registry | EntryPoint v0.7 | Safe Singleton v1.4.1 | Kernel Factory v3.0 |
Relayer Network Required | |||
Fee Extraction Point | Bundler & Paymaster | Protocol DAO Treasury | Bundler & Paymaster |
User Op Censorship Surface | Bundler & Paymaster | Safe Guardians | Bundler & Paymaster |
deep-dive
THE ARCHITECTURAL SHIFT
The Slippery Slope: From Convenience to Captivity
Smart accounts centralize power by shifting critical infrastructure from user-run nodes to developer-controlled services.
Smart accounts invert the client-server model. Traditional wallets like MetaMask execute transactions locally on user hardware. Account Abstraction (ERC-4337) moves this execution to a bundler network, creating a new, centralized dependency layer.
Bundlers are the new validators. The entity controlling the dominant bundler or Paymaster service (e.g., Stackup, Biconomy, Alchemy) controls transaction ordering and censorship. This is analogous to MEV extraction at the protocol level.
Standardization creates monoculture risk. Widespread adoption of a single smart account implementation (e.g., a popular Safe{Wallet} module) centralizes upgrade power. A critical bug or malicious update becomes a systemic vulnerability.
Evidence: In early ERC-4337 deployments, a single bundler processed over 60% of UserOperations. This mirrors the initial centralization of early rollup sequencers before decentralization efforts began.
counter-argument
THE CENTRALIZATION TRAP
Counterpoint: Isn't This Just Healthy Competition?
Smart accounts shift power from users to the developers who control the account logic and infrastructure.
Account abstraction centralizes development power by making the wallet a platform. The team that controls the smart account's verification logic and bundler network dictates which operations are possible and profitable, creating a new form of vendor lock-in.
This is not like DApp competition. A user can switch from Uniswap to Curve, but switching a smart account's core infrastructure requires a full migration, akin to changing your operating system, not just an app.
Evidence: Look at the bundler market. Today, Ethereum's EntryPoint is a singleton, and major bundler services like Stackup and Alchemy dominate the relay network. This creates a fee market and censorship point controlled by a few entities.
takeaways
THE ARCHITECTURE SHIFT
Key Takeaways for Builders and Investors
Smart Accounts (ERC-4337) are not just a UX upgrade; they are a fundamental re-architecting of user sovereignty that will consolidate power in the application layer.
01
The Bundler as the New RPC Endpoint
User operations don't hit the public mempool; they go to a bundler. This creates a critical infrastructure choke point controlled by dApp developers or wallet providers.
- Who controls the bundler controls transaction flow, ordering, and MEV capture.
- Expect a land grab similar to RPC providers, with winners like Stackup, Alchemy, and Pimlico becoming gatekeepers.
- ~500ms latency and fee market control will be the new battlegrounds for user retention.
1
Critical Chokepoint
~500ms
Latency Battleground
02
Paymasters Centralize Subsidy & Sponsorship
Gas abstraction via paymasters moves economic power from users to applications. This isn't just about onboarding; it's about locking in user behavior.
- Apps can sponsor specific actions (e.g., first trade, liquidity provision) to drive metrics.
- Paymaster logic dictates which tokens are 'money' (e.g., USDC-only gas), creating embedded finance moats.
- This enables programmable business models where apps pay for the transactions they profit from, centralizing the subsidy lever.
100%
Gas Abstraction
Key Lever
Business Model
03
Aggregators Will Eat the Wallet
The 'best' wallet will be the one with the smartest intent-solver network and aggregated liquidity. User loyalty shifts from key storage to execution quality.
- Wallets like Ambire or Safe must compete with UniswapX and CowSwap on cross-chain intent fulfillment.
- Execution becomes a commodity; the aggregator with the best routing (via Across, Socket, LayerZero) wins.
- This leads to vertical integration where the top execution layer also controls the account interface.
Commoditized
Execution
Vertical Integration
End State
04
Modular Security Creates Vendor Lock-In
Smart Accounts enable modular security (multisig, 2FA, session keys). However, the module marketplace will be dominated by a few audited, insured providers.
- Developers will default to integrated modules from Safe{Core}, ZeroDev, or Biconomy for liability reduction.
- This creates a security stack moat; switching costs for users and developers become prohibitive.
- The entity controlling the dominant module standard effectively controls the security policy for millions of accounts.
High
Switching Cost
Policy Control
Ultimate Power
05
Data Becomes the Real Asset
Bundlers and paymasters see the full graph of user intent before it's on-chain. This pre-chain data is a proprietary asset far more valuable than on-chain analytics.
- Predictive modeling for MEV and liquidity provisioning will be built on this private data firehose.
- Entities like Chainlink (CCIP) or Polygon (AggLayer) that position as intent coordinators will amass this data.
- Who sees the intent flow controls the future of on-chain finance.
Proprietary
Data Asset
Pre-Chain
Visibility
06
The New Stack: From L1 to Application Chain
The endgame is application-specific chains where the app is the infrastructure. Smart Accounts are the wedge.
- A dominant dApp bundles its own bundler, paymaster, and modular rollup (via Arbitrum Orbit, OP Stack).
- This creates closed-loop ecosystems with optimized economics, akin to dYdX v4 but for generalized applications.
- The winning L2s will be those that best enable this vertical integration, turning Ethereum into a settlement backplane for app-chain empires.
Vertical
Integration
Settlement Layer
Ethereum's Role
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