How to Architect a Decentralized Bundler Network

A decentralized bundler network is a peer-to-peer system of nodes that compete to package and submit UserOperation objects to the blockchain on behalf of ERC-4337 smart accounts. Unlike a single, centralized bundler, this architecture eliminates a critical point of failure and censorship. The core architectural challenge is coordinating a permissionless set of actors to perform a trusted role—ensuring operations are processed reliably, efficiently, and without manipulation. Key design pillars include a robust peer-to-peer (P2P) mempool, a verifiable execution engine, and a cryptoeconomic incentive layer that aligns participant behavior with network goals.

The foundation is a gossip-based P2P mempool where user operations are propagated. This mempool must implement strict validation rules to prevent spam and invalid operations from flooding the network. Each bundler node runs a local simulation (using the eth_call RPC) against a recent blockchain state to verify the operation's validity and the sufficiency of its prefunded gas. Only operations that pass this simulation are forwarded. To prevent Denial-of-Service (DoS) attacks, implementations like the one in the Ethereum Foundation's reference bundler use reputation systems and gas-based throttling.

The execution layer requires a sandboxed Ethereum Virtual Machine (EVM) environment. When a bundler selects operations from its mempool to create a bundle, it must re-simulate the entire batch to ensure success and calculate the required gas. This simulation must be deterministic and produce a paymaster signature if one is required. Architecturally, this is often a dedicated module separate from the P2P client. For decentralization, the design must assume bundlers run on heterogeneous hardware, so the simulation logic must be efficient and have clear gas and opcode limits to prevent resource exhaustion.

Incentive mechanisms are critical for security and liveness. Bundlers earn fees from the gas overhead included in user operations. A decentralized network must prevent MEV (Maximal Extractable Value) exploitation and censorship through protocol rules. One approach is to enforce a first-come-first-served ordering within the P2P mempool or implement a commit-reveal scheme for bundle submission. Reputation systems can penalize bundlers that consistently fail to include valid operations or attempt to reorder them for profit. Staking or bonding mechanisms can be added to slash malicious actors, though they increase participation barriers.

Implementation typically involves several open-source components. The core is often a modified Ethereum execution client (like Geth or Nethermind) or a specialized client like Reth bundled with the P2P and bundler logic. The js-4337 library provides a reference implementation in TypeScript. For production, you would need to integrate with a relayer for transaction submission, monitoring services for chain reorgs and state updates, and frontrunning protection services like Flashbots Protect. The network's performance is measured by its inclusion rate, latency, and resistance to centralized pressure.

A decentralized bundler network is a peer-to-peer system of nodes that execute, bundle, and submit user operations for ERC-4337 accounts. The core architectural goal is to decentralize the critical role of the bundler, which is responsible for transaction ordering and inclusion on-chain. Before development, you need a strong grasp of the ERC-4337 specification, including the UserOperation mempool, the EntryPoint singleton contract, and paymaster mechanics. Familiarity with the official ERC-4337 reference implementation and the current state of bundler clients like Stackup, Alchemy, and Pimlico is essential for understanding existing design patterns.

The network's architecture revolves around several key software components. First, you need a bundler client that can receive UserOperation objects, simulate them via an eth_simulateBundle RPC call to ensure they are valid and will pay fees, and then package them into a single on-chain transaction. This client must integrate with a relayer or block builder to ensure transaction inclusion, often using services like Flashbots Protect or a private mempool. For decentralization, a consensus mechanism or reputation system is required to coordinate which bundler submits a given bundle and to prevent malicious behavior like censorship or front-running.

A critical prerequisite is setting up a robust signer and wallet management system. Each bundler node requires a funded Ethereum account to pay gas for the bundled transactions, which is later reimbursed by the user's account or paymaster. You must implement secure key management, potentially using a Hardware Security Module (HSM) or a cloud KMS solution like AWS KMS or GCP Cloud HSM. The architecture must also account for fee management, dynamically adjusting for base fee spikes and priority fees to ensure timely inclusion, often by integrating with gas estimation oracles.

For the network layer, you must choose a peer-to-peer communication protocol. Options include using libp2p (as seen in Ethereum's devp2p) or a custom gossip protocol to broadcast UserOperation objects between nodes. This layer must be designed for low latency and high reliability to prevent operations from being stuck. Implementing a shared mempool state across nodes is a significant challenge, requiring solutions for deduplication, operation expiry, and conflict resolution when multiple bundlers attempt to process the same operation.

Finally, the architecture requires monitoring and slashing components to maintain network health and security. This includes logging and alerting systems for failed simulations or submissions, and a mechanism to penalize nodes that act maliciously. Many designs incorporate a staking system using a smart contract, where operators deposit collateral (e.g., 32 ETH) that can be slashed for provable offenses like censorship. The complete system forms a decentralized marketplace for block space, where bundlers compete to provide the best service for ERC-4337 users.

A decentralized bundler network is the execution layer for ERC-4337 account abstraction, responsible for collecting, simulating, and submitting user operations (UserOps) to the blockchain. Unlike a single centralized service, a network distributes this critical function across multiple independent nodes. The primary architectural goals are censorship resistance (ensuring no single entity can block transactions), high availability (maintaining service uptime), and economic efficiency (optimizing gas costs and profitability for node operators). Key components include the bundler node software (like the official Stackup or Pimlico implementations), a peer-to-peer mempool for operation propagation, and a block builder/relay interface for transaction inclusion.

The network's core logic revolves around the UserOp mempool. Nodes must implement the ERC-4337 eth_sendUserOperation RPC and maintain a local mempool of pending operations. A decentralized network requires a shared mempool, which can be achieved via a libp2p pubsub protocol or a dedicated service like The Graph for indexing. Before adding an operation, nodes must perform simulation using the eth_call method to verify its validity and paymaster sponsorship; invalid simulations must be rejected to prevent DoS attacks. Operations are then bundled into a single on-chain transaction, which requires careful gas optimization and MEV (Maximal Extractable Value) consideration to ensure profitability.

Node incentivization is critical for network security and liveness. The primary revenue stream is the priority fee included in the bundled transaction. Architectures often implement a builder/relay model, where specialized builder nodes compete to create the most profitable bundle and sell it to a relay, which then submits it to a block builder like Flashbots. This separates bundling logic from block building, allowing for optimization. To prevent centralization, the network can use a stake-weighted selection for the next block's bundler or a proof-of-stake mechanism where nodes stake ETH or a network token to participate, with slashing for malicious behavior like censorship.

For production deployment, you must choose between a permissioned or permissionless node set. A permissioned set, used initially by networks like Polygon's Biconomy, offers easier coordination and security auditing. A permissionless set, the long-term goal, requires robust sybil resistance. Implementing partial block auctions can help, where nodes bid for the right to bundle the next block, with proceeds distributed to stakers. Monitoring is also essential; each node should expose metrics for operations per second, simulation failure rates, and bundle inclusion latency using tools like Prometheus and Grafana.

Here is a simplified conceptual flow for a bundler node's main loop:

pythonCopy
while True:
    # 1. Receive UserOp from RPC or P2P mempool
    user_op = receive_user_operation()
    # 2. Simulate the operation
    try:
        simulate(user_op)
        mempool.add(user_op)
    except SimulationError:
        reject(user_op)
    # 3. When ready to build a bundle
    if should_create_bundle():
        bundle = create_aggregate_transaction(mempool)
        # 4. Send to builder/relay or submit directly
        tx_hash = send_bundle_to_relay(bundle)
        mempool.remove_included(bundle)

This loop highlights the critical tasks of validation, aggregation, and submission.

Future architectural challenges include interoperability with multiple EVM chains (requiring cross-chain messaging), account reputation systems to filter spam, and ZK-proof batching to reduce on-chain verification costs. The design must remain adaptable to EIP updates, such as changes to the EntryPoint contract. Successful networks will balance decentralization with performance, ensuring user operations are processed reliably and without discrimination, fulfilling the core promise of account abstraction.

A decentralized bundler network is a peer-to-peer system of nodes that compete to aggregate, order, and submit User Operations to an EntryPoint smart contract. Unlike a single, trusted bundler, this network aims for censorship resistance and liveness by distributing this critical role. The core architectural challenge is aligning the economic incentives of independent node operators with the network's security and performance goals. Key components include a p2p mempool for operation propagation, a block builder for constructing valid bundles, and a staking/slashing engine to enforce honest behavior.

Economic security is enforced through a staking and slashing mechanism. To participate as a bundler, a node operator must stake a bond of the network's native token. This stake can be slashed (partially burned) for provably malicious actions, such as censorship (consistently ignoring valid operations), front-running, or submitting invalid bundles that waste gas. Slashing conditions must be objectively verifiable on-chain, often requiring fraud proofs or a decentralized challenge period. The staking contract, typically built using a framework like OpenZeppelin, manages deposits, withdrawals, and the slashing logic.

Node incentives must balance security with liveness. Beyond the threat of slashing, positive rewards are needed. The primary revenue stream is the priority fee included in User Operations. A well-designed network uses a proposer-builder separation (PBS) model or a MEV auction to allocate the right to build the next bundle, ensuring fees are distributed fairly. Additional rewards can come from a protocol treasury that mints new tokens, similar to proof-of-stake blockchains, to subsidize nodes during low-activity periods and ensure network stability.

Implementation requires careful smart contract design. The staking contract must track each operator's stake and enforce a withdrawal delay (e.g., 7 days) to allow time for slashing challenges. A registrar contract maintains a permissionless list of active, staked bundlers. Bundlers listen for new User Operations via a p2p gossip protocol like LibP2P, simulate them locally using a bundler spec client, and then submit transaction bundles to the EntryPoint. Successful execution requires bundlers to handle gas sponsorship via paymasters and manage nonce ordering correctly.

For a production network, consider implementing delegated staking, allowing token holders to delegate their stake to professional node operators, increasing network participation. A reputation system can track node performance metrics like uptime and inclusion rate, influencing their selection probability in the builder auction. Monitoring and alerting for slashing conditions is critical; operators should run services that watch for challenges against their stake. The ultimate goal is a self-sustaining ecosystem where honest bundling is the most profitable strategy.

A decentralized bundler network's primary function is to receive user operations (UserOperations) from various sources—like wallets, dApps, or public mempools—and package them into transaction bundles for the Ethereum EntryPoint contract. The network must handle work distribution to avoid bottlenecks and ensure reliability. Common patterns include a round-robin load balancer directing traffic to available bundler nodes, or a publish-subscribe model where nodes listen for operations on a shared message queue like Redis or Apache Kafka. This decouples the receipt of work from the execution, allowing for horizontal scaling.

Bundle selection is the process where a bundler node decides which set of pending UserOperations to include in its next bundle. The goal is to maximize profit while adhering to constraints like gas limits and dependency rules. A naive approach is First-In-First-Out (FIFO), but this is suboptimal. Advanced bundlers implement a priority queue where operations are scored. The scoring algorithm typically considers the effective gas price (after accounting for priority fees), the operation's age to prevent starvation, and any simulation success status. Operations failing pre-checks are filtered out immediately.

To architect a robust selection system, bundlers often separate the logic into distinct phases. The gathering phase collects operations from the distributed queue. The filtering phase simulates each operation using a eth_call to the EntryPoint's simulateHandleOp to ensure it will succeed and doesn't violate storage access rules. The batching phase then runs a packing algorithm, like a greedy knapsack solver, to fit the highest-scoring operations into the block's gas limit. This algorithm must respect nonce ordering for senders and handle dependencies between operations.

Implementing this requires careful state management. Each bundler node should maintain a local mempool of validated operations. Code for a simple priority queue in TypeScript might look like:

typescriptCopy
class PriorityMempool {
  private queue: MaxHeap<UserOperation>;

  addOp(op: UserOperation): void {
    const score = this.calculateScore(op);
    this.queue.push({ op, score });
  }

  private calculateScore(op: UserOperation): number {
    // Score based on gas price, age, etc.
    return BigInt(op.maxPriorityFeePerGas) - BigInt(op.verificationGasLimit) / 10000n;
  }
}

The actual bundling logic would then pop items from this heap until the gas limit is reached.

For true decentralization, the network needs a consensus mechanism for bundle proposal to prevent malicious bundling or censorship. One approach is to have bundlers commit to a bundle hash (a commit-reveal scheme) on-chain, with other nodes able to challenge invalid bundles. Alternatively, networks like SUAVE aim to provide a decentralized block-building environment that could be leveraged. The architecture must also plan for fallback providers: if a primary bundler node fails, the system should reroute its pending operations to healthy nodes within seconds to maintain user experience.

Finally, monitor key metrics to tune performance: bundle inclusion rate, average operation latency, gas efficiency (used gas vs. limit), and profit per bundle. Tools like Prometheus for metrics and Grafana for dashboards are essential. The end goal is a system that is not only profitable but also reliable and censorship-resistant, forming the backbone of a user-friendly account abstraction ecosystem.

The foundation of a decentralized bundler network is a modular architecture that separates the UserOperation lifecycle into distinct roles. The core components are the Bundler Node, the Paymaster Service, and the Relayer Network. The Bundler Node is responsible for receiving, validating, and simulating UserOperations from clients. It interacts with a mempool, a shared storage layer where pending operations are broadcast and aggregated. This separation ensures that no single entity controls the entire flow, enhancing censorship resistance and reliability. The architecture must be designed for high throughput and low latency to compete with centralized alternatives.

A Bundler Node's primary logic involves the simulation and execution of UserOperations. Upon receiving an operation, the node must first simulate it using a local Ethereum Execution Client (like Geth or Erigon) to verify it will succeed and not revert. This step is critical for preventing wasted gas. The simulation must adhere to the rules defined in ERC-4337 and use the eth_call RPC method with specific validation rules. After successful simulation, the node bundles multiple operations into a single transaction. This involves aggregating signatures, managing gas sponsorship via paymasters, and submitting the final bundle to a public mempool or directly to a relayer.

The mempool and p2p layer is the decentralized communication backbone. Unlike a traditional blockchain mempool, a UserOperation mempool requires custom gossip protocols to share pending operations among bundlers. Implementations often use libp2p or a custom protocol over devp2p. Each Bundler Node runs a client that subscribes to this network, receiving and broadcasting operations. To prevent spam, operations must include a staked deposit or be validated against a reputation system that tracks entities based on their history. This layer ensures operations are widely available, preventing censorship and enabling competitive bundling where multiple nodes can include the same operation, with the most efficient bundle winning.

Integrating Paymaster services adds another layer of complexity. A paymaster is a smart contract that can sponsor gas fees for users. The bundler must interact with the paymaster during simulation to validate sponsorship and may need to prefund the paymaster's deposit on the EntryPoint contract. The code must handle both verifying paymasters (which perform off-chain checks) and sponsorship paymasters (like those for ERC-20 token payments). The bundler's transaction building logic must account for paymaster data and ensure the final bundle transaction correctly reimburses the bundler for any advanced gas costs, which is a core economic incentive.

Finally, the relayer network is responsible for submitting the finalized bundle transaction to the blockchain. While a bundler can submit its own transactions, using a decentralized network of relayers improves efficiency and reduces the risk of transaction censorship or frontrunning. Relayers compete to include bundles, often using a MEV-boost-like auction mechanism. The bundler node's code must package the bundle with a bid for the relayer's service and broadcast it. The entire system's economic security relies on properly incentivizing each actor: users pay fees, bundlers earn priority fees, paymasters charge for service, and relayers earn submission fees.

Architecting a decentralized bundler network requires balancing decentralization, performance, and economic security. The core components—a relay network for order flow, a builder network for block construction, and a staking/auction mechanism for validator selection—must be designed to resist censorship and maximize extractable value (MEV) capture for users. Successful implementations, like the SUAVE initiative by Flashbots, demonstrate that separating the roles of proposer and builder is a viable path forward. Your network's specific design will depend on the target chain's consensus model and the desired level of validator decentralization.

To move from theory to implementation, start by forking and experimenting with existing open-source bundler clients, such as those in the Ethereum Execution Client (EEL) repository or Reth. Focus on integrating with a relayer API to receive user operations and a block builder API to submit constructed blocks. Key development tasks include implementing Paymaster validation logic, managing UserOperation mempools, and designing a secure bid submission process for the builder-proposer marketplace. Testing against a local devnet or a public testnet like Sepolia is essential before mainnet deployment.

The future of decentralized bundling is closely tied to broader EIP-4337 adoption and interoperability across rollups. As an architect, consider how your network will support account abstraction on Layer 2s like Arbitrum, Optimism, and zkSync. Explore cross-chain messaging protocols (e.g., LayerZero, CCIP) to enable bundled operations that span multiple ecosystems. Contributing to standards and participating in working groups with the Ethereum Foundation or ERC-4337 community will help shape the infrastructure that powers the next generation of smart contract wallets and decentralized applications.