Bundler Node

The Bundler's primary function is to collect UserOperations from the mempool. It monitors a peer-to-peer network where users and dApps broadcast these intent messages, which are not standard transactions but structured data packets containing the user's desired actions and signature. The Bundler aggregates multiple UserOperations into a single batch for efficient processing.

Before submitting to the chain, the Bundler must simulate each UserOperation to ensure it is valid and will pay its required fees. This involves:

• Running the operation through the EntryPoint contract's validation logic.
• Verifying the user's signature and paymaster sponsorship (if used).
• Checking that the user's smart contract account has sufficient funds for gas. This step prevents the Bundler from paying for failed transactions.

The Bundler is responsible for creating and submitting a valid Ethereum transaction that calls the EntryPoint contract's handleOps method. Key duties include:

• Determining the optimal gas price for the batch.
• Paying the upfront gas costs in the native currency (e.g., ETH).
• Structuring the batch to maximize efficiency and minimize costs for end-users. The Bundler is later reimbursed for gas via the EntryPoint, plus a priority fee.

A critical role is interfacing with Paymasters, which can sponsor gas fees for users. The Bundler must:

• Identify UserOperations that specify a paymaster.
• Ensure the paymaster's validation rules are met during simulation.
• Interact with the paymaster contract to secure a commitment to pay for gas, often in exchange for ERC-20 tokens from the user. This enables gasless transactions and payments in stablecoins.

Bundlers maintain a local mempool of pending UserOperations. They must decide on a ordering rule (often First-Come-First-Served or highest fee priority) for including operations in a batch. They also implement anti-censorship measures and may participate in a peer-to-peer network to share UserOperations, ensuring decentralization and user choice among bundlers.

In the proposed Proposer-Builder Separation (PBS) roadmap for ERC-4337, Bundlers may be required to stake ETH. This creates a cryptoeconomic security model where:

• Staked Bundlers are trusted to order transactions honestly.
• Malicious behavior (e.g., censorship, reordering) can lead to slashing of their stake.
• This system aims to prevent MEV (Maximal Extractable Value) extraction and ensure fair processing for users.

The primary role of a bundler is to aggregate multiple UserOperations from the mempool into a single on-chain transaction. This process involves:

• Collecting pending operations from the public mempool or private relayers.
• Simulating each operation to ensure it will pass validation and pay fees.
• Batching valid operations into a single bundle transaction for submission to an EntryPoint contract. This aggregation is critical for amortizing gas costs and enabling efficient paymaster sponsorship models.

Several teams operate managed bundler services that provide public RPC endpoints for developers. These handle node operation, uptime, and optimization. Prominent examples include:

• Stackup: Offers a robust public bundler and a managed service with advanced features.
• Alchemy's account-kit: Provides a bundler as part of its Account Abstraction developer suite.
• Biconomy's paymaster-and-bundler: A modular implementation often used with its paymaster services. These services abstract away the complexity of running bundler infrastructure.

Beyond the reference implementation, alternative bundlers offer different performance profiles and language choices:

• skandha: A high-performance bundler implementation in Rust, focused on speed and efficiency for high-throughput environments.
• Rust-based Bundlers: Other projects leverage Rust's safety and performance for core bundling logic, often integrating with existing Rust blockchain client ecosystems. These alternatives demonstrate the modularity of the ERC-4337 standard, where the bundler logic is independent of the underlying execution client.

Bundlers are profit-maximizing actors in the account abstraction ecosystem. Their economic incentives include:

• Priority Fee Collection: Earns the priority fees (maxPriorityFeePerGas) specified by UserOperations.
• MEV Opportunities: Can reorder or exclude operations within a bundle to capture value, similar to block builders in traditional Ethereum.
• Paymaster Kickbacks: May receive compensation from paymasters for including their sponsored transactions. This creates a competitive bundler market where users and dapps may choose bundlers based on reliability, cost, and censorship resistance.

A bundler node does not operate in isolation; it is a key piece in the ERC-4337 stack:

• Paymaster Coordination: Must correctly simulate and handle transactions where fees are paid by a third-party paymaster contract.
• Wallet SDKs: Smart contract wallets and SDKs (like ZeroDev, Safe{Wallet}) send UserOperations to bundler RPC endpoints.
• Alternative Mempools: Can be configured to listen to private transaction relays or P2P networks for UserOperations, beyond the public mempool. This integration enables the full user experience of gasless transactions and session keys.

A UserOperation is a pseudo-transaction object that represents a user's intent in the ERC-4337 standard. It is the fundamental data structure that a Bundler Node processes.

• Contains fields for the sender, nonce, call data, signature, and paymaster data.
• Is not a native Ethereum transaction, but is packaged into one by the bundler.
• Its validity is checked against the user's smart contract wallet logic.

The EntryPoint is a singleton, system-level smart contract that acts as the trust anchor and execution coordinator for ERC-4337. The Bundler Node's primary job is to submit a bundle of UserOperations to this contract.

• Validates and executes UserOperations according to the protocol rules.
• Manages deposit staking for paymasters to prevent spam.
• Aggregates gas payments and refunds.

A Paymaster is a smart contract that can sponsor transaction fees for users, enabling gasless UX or payment in ERC-20 tokens. The Bundler Node must interact with the paymaster specified in a UserOperation.

• Validates if it will pay for the operation and provides a signature.
• Must stake ETH in the EntryPoint as a security deposit.
• Allows for abstracted gas payment logic, separating fee payment from transaction execution.

An Aggregator is an optional component that allows a user to validate a batch of UserOperations with a single signature, optimizing gas costs. The Bundler Node can utilize an aggregator to validate bundled operations more efficiently.

• Implements signature aggregation schemes (e.g., BLS).
• The user's smart contract wallet must support the specific aggregator.
• Reduces on-chain validation overhead for complex multi-op sessions.

A Smart Contract Wallet is the user's on-chain account in ERC-4337, replacing Externally Owned Accounts (EOAs). The Bundler Node executes transactions on behalf of this contract.

• Contains the user's logic for signature validation, nonce management, and transaction execution.
• Is the sender of a UserOperation.
• Enables features like social recovery, batch transactions, and custom security rules.

The Alternative Mempool (or UserOperation mempool) is a peer-to-peer network where Bundler Nodes broadcast and receive pending UserOperations before submitting them on-chain.

• Separate from the Ethereum transaction mempool.
• Uses its own gossip protocol for propagating UserOperations.
• Bundlers compete to select the most profitable operations from this pool to include in their next bundle.