How to Architect an ERC-4337 System

ERC-4337 introduces account abstraction through a higher-layer system, allowing wallets to be smart contracts with custom logic for transaction validation, sponsorship, and recovery. Unlike EIP-2938, which required consensus-layer changes, ERC-4337 operates entirely at the application layer using an alternative mempool. This means users can have wallets that support features like social recovery, session keys, and gas fee sponsorship by third parties (paymasters) without requiring all Ethereum nodes to upgrade.

The system architecture revolves around several new actors and data structures. A UserOperation is a pseudo-transaction object submitted by a user's smart contract wallet, known as an Account. This object is bundled by a Bundler, which acts like a specialized block builder, and submitted to a dedicated UserOperation mempool. The Bundler pays for the transaction gas and is reimbursed by the Account or a Paymaster contract. An EntryPoint singleton contract, deployed at a fixed address, acts as the system's orchestrator, validating and executing bundles of UserOperations.

Here is a simplified data flow: 1) A user's frontend constructs a UserOperation with the target call data and signature. 2) This op is sent to the peer-to-peer mempool. 3) A Bundler selects ops, simulates their validation via the EntryPoint, and creates a bundle. 4) The Bundler calls handleOps() on the EntryPoint, which loops through each op, validates the Account's signature and pays the gas via the Paymaster, then executes the intended call. This separation of validation and execution is a core innovation.

Key contracts must follow specific interfaces. The IAccount interface requires a validateUserOp function for signature verification. The IPaymaster interface requires a validatePaymasterUserOp function to determine if it will sponsor the op. The EntryPoint (v0.6) is the reference implementation that enforces security checks, preventing invalid ops from being included on-chain. Developers should audit interactions between these components, as malicious Accounts or Paymasters can attempt to drain funds during the validation phase.

For system architects, critical decisions include choosing a Bundler infrastructure (running your own vs. using a service like Stackup or Alchemy), designing Account contract upgradeability, and integrating Paymaster logic for fee abstraction. Security considerations are paramount: always use the official, audited EntryPoint contract, implement rate-limiting and replay protection in your Account, and thoroughly test UserOperation simulation to prevent bundler censorship or exploitation.

To architect an ERC-4337 system, you must first establish a solid development environment. This includes setting up a Node.js runtime (v18 or later), a package manager like npm or yarn, and a code editor such as VS Code. You will need to install essential libraries, primarily the viem and wagmi SDKs for Ethereum interaction, and a testing framework like Hardhat or Foundry. A local blockchain for development, such as Anvil from the Foundry suite, is crucial for rapid iteration and testing of smart accounts and paymasters without incurring gas costs.

A deep conceptual understanding of the Account Abstraction stack is non-negotiable. You should be comfortable with the separation of concerns: the UserOperation object represents a user's intent, Bundlers are nodes that package these operations, Paymasters can sponsor transaction fees, and Aggregators can batch signature verification. Familiarity with existing smart account implementations like Safe{Wallet}, ZeroDev, or Biconomy provides practical insight into different architectural patterns and security models.

Proficiency in Solidity (0.8.x) for writing smart contracts is essential, as you will be deploying at least a Smart Account and potentially custom Paymasters or Aggregators. You must also understand the Ethereum JSON-RPC API and the new eth_sendUserOperation RPC method introduced by ERC-4337. Knowledge of cryptographic primitives, particularly ECDSA signatures and their aggregation, is important for implementing secure validation logic. Finally, you should have a funded wallet on a testnet (e.g., Sepolia) for deploying contracts and a basic grasp of gas economics to design efficient user operations.

An ERC-4337 bundler is a network participant responsible for collecting, validating, and submitting UserOperations to the blockchain. Its primary function is to act as a transaction relay, but its architecture is critical for system reliability, censorship resistance, and profitability. A well-designed bundler must handle several key tasks: listening for UserOperation events from mempools, performing simulation to validate opcode-level rules, managing a pending pool of valid operations, bundling them into a single transaction, and finally submitting this bundle to an EntryPoint contract on-chain. The design must prioritize security against malicious operations and economic efficiency in gas management.

The core architectural decision involves choosing between a monolithic or microservices design. A single-process bundler is simpler to deploy but can become a bottleneck. For high-throughput requirements, a decoupled architecture is preferable. This typically separates components like the JSON-RPC API (handling eth_sendUserOperation), the mempool listener (monitoring peer-to-peer networks), the simulation engine (executing eth_call validations), and the executor (building and sending bundle transactions). These services communicate via a message queue (e.g., Redis or RabbitMQ) or a shared database, allowing for independent scaling and improved fault isolation.

Simulation is the bundler's primary security mechanism. Before accepting a UserOperation, the bundler must simulate its execution through the EntryPoint's simulateValidation and simulateHandleOp functions. This checks for forbidden opcodes and ensures the operation will pay for its own gas. Architecturally, this requires a dedicated, sandboxed execution environment—often a modified Ethereum client like Geth or a specialized EVM—to prevent simulation from affecting the bundler's core state. You must also implement robust error handling for simulation failures and maintain a local database of banned entities (paymasters, factories, accounts) that consistently cause reverts.

Managing the pending pool and bundle construction requires strategic logic. The bundler maintains a pool of validated UserOperation objects, each with an associated gas price. The bundling algorithm must select operations to maximize fee revenue while staying within the block gas limit. This involves sorting by effective gas price (maxFeePerGas - maxPriorityFeePerGas) and potentially implementing MEV-aware ordering. Furthermore, the bundler needs a nonce management system to track the EntryPoint contract's nonce and handle transaction replacement (bump) strategies if a bundle submission fails or is outbid.

Operational infrastructure is crucial for reliability. A production bundler requires monitoring for metrics like operations per second, simulation success rate, average bundle inclusion time, and profitability. It should integrate with node providers (e.g., Alchemy, Infura, or your own nodes) for reliable chain access and implement high-availability setups, potentially with multiple bundler instances behind a load balancer. Censorship resistance can be enhanced by sourcing UserOperations from a decentralized p2p mempool, like the one implemented by the JS Reference Bundler, rather than solely relying on a private RPC endpoint.

Finally, consider the economic and upgradeability aspects. The bundler's wallet (which pays for the bundle transaction) must be funded and its private key securely managed. The system should be designed to easily adapt to new EntryPoint contract versions and changes in the ERC-4337 specification. By separating concerns, implementing rigorous simulation, and building for observability, you create a bundler infrastructure that is secure, efficient, and maintainable for the long-term growth of your account abstraction ecosystem.

The ERC-4337 architecture decouples transaction validation from gas payment. At its heart is the UserOperation, a pseudo-transaction object signed by a smart contract wallet. This object is broadcast to a network of bundlers, who package multiple operations into a single on-chain transaction. The critical component enabling gasless or sponsored experiences is the paymaster, a smart contract that can validate and pay for a user's gas fees according to customizable logic.

When architecting your system, you must define the interaction flow. A user's client (like a wallet SDK) constructs a UserOperation, specifying the target paymaster. The bundler receives this op and calls paymaster.validatePaymasterUserOp on-chain. This method is where your custom sponsorship logic executes—checking a signature, verifying a subscription NFT, or deducting from a deposit. If validation passes, the paymaster must have sufficient ETH (or the chain's native token) to cover the gas costs when the bundler's transaction is ultimately executed.

Your paymaster contract's validation function is gas-limited, so logic must be efficient. Common strategies include verifying an off-chain ECDSA signature from a trusted server, checking an allowlist of approved users or dApps, or validating a user's ERC-20 token balance for gas reimbursement. For example, a dApp might run a service that signs user operations, and the paymaster contract recovers the signer to confirm it's an authorized server. Always include a postOp function for cleanup, like updating an internal balance after sponsorship.

Security is paramount. Your validatePaymasterUserOp must be reentrancy-guarded and should not trust unverified external calls. Use a storage anti-replay mechanism, like incrementing a nonce per user, to prevent the same signed UserOperation from being executed multiple times. It is also critical to manage the paymaster's deposit in the EntryPoint contract efficiently, ensuring it never runs out of funds to sponsor transactions, which would cause all subsequent user ops to revert.

To implement, start with the official ERC-4337 contracts as a foundation. A basic sponsorship paymaster might inherit VerifyingPaymaster, which handles signature verification. Your development and testing workflow should involve deploying to a testnet, using a bundler service like Stackup or Alchemy, and simulating UserOperations with tools from the account-abstraction SDK before going live.

In production, monitor key metrics: paymaster deposit balance, validation success/failure rates, and gas overhead. Architect for scalability by considering batch sponsorship via a paymaster factory or using a relay server to manage signatures off-chain. By separating concerns—validation logic in the paymaster, execution via bundlers, and settlement in the EntryPoint—you create a flexible system capable of supporting diverse gas sponsorship models for your users.

An ERC-4337 smart account factory is a contract responsible for deploying and initializing user-controlled smart contract wallets (UserOperations). Unlike Externally Owned Accounts (EOAs), these accounts are programmable, enabling features like social recovery, batch transactions, and gas sponsorship. The factory's primary role is to deterministically generate a unique contract address for each user using the CREATE2 opcode, which allows wallets to be deployed at a predictable address even before they exist on-chain. This is crucial for applications that need to pre-compute a user's wallet address for deposits or interactions.

The standard factory interface, defined in the ERC-4337 specification, typically includes a createAccount function. This function takes the user's initial owner/signer address and a salt as inputs. The salt, often a uint256, allows for the creation of multiple accounts per user or specific account versions. The factory combines this salt with the user's signer address and its own immutable bytecode to compute the final CREATE2 address. A critical security best practice is to make the factory immutable after deployment; any upgrade should be handled by deploying a new factory and migrating users, not by modifying the existing one.

When designing your factory, consider gas optimization and modularity. The deployment logic should be minimal. Expensive setup, like installing specific modules or setting up complex guardians, should be deferred to a separate initializer function callable by the new account itself after creation. This keeps the factory's createAccount function cheap. For modular account designs like Safe{Core} AA or ZeroDev Kernel, the factory often deploys a minimal proxy that points to a singleton, immutable implementation contract. This pattern drastically reduces deployment gas costs, as only a small proxy is created per user.

A robust architecture must handle account initialization securely. The factory should emit a standard event, such as AccountCreated, logging the new account address, its owner, and the salt used. This allows indexers and frontends to track deployments. Furthermore, consider implementing counterfactual deployment features: your system should allow users to interact with their smart account address (sending funds, assigning it as an NFT owner) even before the factory contract is invoked to formally deploy it, as the address is pre-deterministic.

For production systems, integrate entry point validation. Your factory should be whitelisted or designed to work seamlessly with a specific EntryPoint contract. Some designs pass the EntryPoint address as a constructor argument to the newly created account, binding it to the ERC-4337 infrastructure. Always include comprehensive tests for edge cases: deploying with the same salt (should revert), calculating off-chain addresses, and verifying the deployed account's bytecode matches the expected implementation. The factory is the foundation of your account abstraction stack; its simplicity and security are paramount.

An ERC-4337 system decentralizes the user experience by separating the User Operation lifecycle from direct blockchain execution. The core architecture consists of four primary components: the User, the Bundler, the EntryPoint contract, and the Smart Contract Wallet (SCW). The user initiates actions by signing a User Operation, a pseudo-transaction object containing the intent, which is then broadcast to a peer-to-peer mempool. This design shifts transaction validation and fee payment logic into the smart contract layer, enabling features like gas sponsorship, batched transactions, and session keys.

The Bundler is the system's workhorse. It monitors the mempool for User Operations, performs initial validation (simulation) against the EntryPoint's rules, and packages valid ops into a single on-chain transaction. Bundlers are typically run by relay services or wallet providers and earn fees via priority gas auctions. They must run a full Ethereum node and implement specific RPC methods like eth_sendUserOperation. Key considerations for bundler architecture include high availability, efficient mempool management, and robust simulation to prevent denial-of-service attacks.

The EntryPoint contract (currently at version 0.6) is the singleton, audited system contract deployed on each supported chain. It defines the security and execution logic for all ERC-4337 operations. Its primary functions are handleOps (for bundlers) and simulateValidation (for pre-execution checks). The EntryPoint orchestrates the flow: it validates the operation's signature and pays the bundler, transfers fees from the SCW's deposit, and executes the wallet's logic. All system security ultimately depends on this contract's correctness.

The Smart Contract Wallet is the user's on-chain account, which must implement the IAccount interface. Its validateUserOp function is called by the EntryPoint to verify the user's signature and pay the prefund. The wallet then executes the desired actions in its execute or executeBatch functions. Wallet design choices are critical: will you use a singleton factory (like Safe's 4337 module) or a custom proxy? How will you manage upgradeability and signer rotation? These decisions impact gas costs and user security.

Data flows through the system in a specific sequence. First, a dapp composes a UserOperation for the user's SCW. The user signs it, and the dapp client sends it via eth_sendUserOperation to a bundler. The bundler simulates the op, and if valid, includes it in a bundle transaction to the EntryPoint. The EntryPoint validates, charges the SCW's deposit, and calls the SCW to run the user's logic. Finally, the bundler transaction is mined, and the results are propagated back to the user. Monitoring this flow requires tracking metrics like op inclusion time, simulation failure rate, and gas overhead.

The ERC-4337 standard introduces a new transaction flow that decouples transaction validation from execution. The core components are the UserOperation object, the Bundler, the EntryPoint contract, and the Smart Account. A UserOperation is a pseudo-transaction object signed by a user. Off-chain bundlers collect these operations, simulate them via eth_call to ensure they will pay fees, and then submit them in a batch to the singleton EntryPoint contract. The EntryPoint orchestrates the entire process, validating each operation and executing the user's intent via their Smart Account contract.

Smart Account design is the first critical security layer. Your account contract must implement the validateUserOp function correctly. Common pitfalls include insufficient signature validation, replay protection failures across different EntryPoint versions or chains, and gas limit miscalculations. Use established, audited account implementations like Safe{Core} AA Protocol or ZeroDev Kernel as a foundation. For custom logic, rigorously test validation with tools like Foundry's forge test and Tenderly simulations to catch edge cases before deployment.

The EntryPoint contract is a trusted singleton. Always use the official, audited version from the eth-infinitism GitHub repository. Do not deploy a custom version, as upgrades are managed collectively by the ecosystem. Your system's security depends on this contract's integrity. Bundlers must perform simulation (eth_call) to verify the UserOperation will compensate them for gas. Implement strict validation rules to reject operations that try to access mutable storage, use banned opcodes, or exceed a specified gas limit during simulation to prevent DoS attacks.

Bundler and Paymaster services introduce off-chain risk. If you operate a bundler, it must be highly available and resistant to MEV extraction and spam. Use a mempool implementation like Skandha or Rundler. For paymasters that sponsor gas fees, implement robust deposit management in the EntryPoint and ensure the sponsorship logic cannot be drained. A common pattern is a verifiable paymaster that checks a signed policy off-chain. All off-chain services should sign data with secure, rotating keys stored in a Hardware Security Module (HSM) or a cloud KMS, never in plain environment variables.

Finally, employ a defense-in-depth monitoring strategy. Track metrics for failed UserOperations, paymaster deposit balances, and bundler submission success rates. Set up alerts for abnormal gas consumption or a high rate of reverted transactions, which could indicate an exploit attempt. Use Etherscan-like block explorers for the EntryPoint and OpenChain for transaction simulation to debug failures. By architecting with these principles—using audited contracts, securing off-chain components, and implementing vigilant monitoring—you build a robust ERC-4337 system resilient to common Web3 threats.

Building with ERC-4337 shifts the paradigm from externally owned accounts (EOAs) to smart contract wallets. Your architecture must now consider the UserOperation lifecycle, the role of Bundlers for transaction inclusion, and Paymasters for gas abstraction. The entry point contract acts as the single, immutable verification and execution hub, ensuring security and standardization across all wallets. This modular design allows for innovation in wallet logic while maintaining a predictable security model for the network.

For implementation, start with a testnet. Deploy your Account Factory, Account Implementation, and optionally a custom Paymaster using the official EntryPoint at 0x5FF137D4b0FDCD49DcA30c7CF57E578a026d2789. Use a Bundler service like Stackup, Alchemy's Rundler, or Pimlico to submit UserOperations. Test critical flows: account creation, a simple token transfer, a batched transaction, and sponsored gas. Monitor for UserOperation events like UserOperationRevertReason to debug validation or execution failures.

The next step is integrating advanced features. Explore session keys for limited-permission interactions, social recovery mechanisms for key management, and signature aggregation to reduce on-chain gas costs. Consider implementing a modular paymaster that can sponsor transactions based on specific rules, like holding a certain NFT or being on an allowlist. The ERC-4337 official GitHub repository and the EntryPoint contract on Etherscan are essential resources for reference implementations and audits.

Security requires diligent auditing. Beyond standard smart contract reviews, focus on the interaction between your account's validateUserOp and execute functions to prevent reentrancy or state corruption. Paymaster logic must carefully manage deposit balances and sponsorship rules. Since Bundlers are permissionless, design your system to handle frontrunning and time-based attacks on UserOperations. Regularly review the Ethereum Account Abstraction Fellowship for ongoing discussions about standards and vulnerabilities.

Finally, evaluate the ecosystem tools. SDKs like ZeroDev, Biconomy, and Candide's account-abstraction package can accelerate development. For user experience, leverage Passkeys or WebAuthn for native biometric signers. As the ecosystem matures, track EIPs like ERC-7562 for native AA on the consensus layer and ERC-7677 for RPC protocol extensions. Building with ERC-4337 today positions your application for a future where smart contract wallets are the default.