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How Does ERC-4337 Work?

ERC-4337 achieves account abstraction through a higher-layer pseudo-transaction object called a UserOperation.

  • Multiple users send UserOperation objects to a separate mempool.
  • Bundlers package UserOperation objects into a transaction for inclusion in a block.
  • Bundlers pay gas for bundled transactions and receive fees from UserOperation executions.
  • Bundlers prioritize UserOperation objects based on fee-prioritization logic.
  • ERC-4337 introduces new functions, such as validate UserOp, and a contract called EntryPoint.
  • EntryPoint serves as a security gate for executing these functions.

These advancements enable seamless integration of smart contract functionality into crypto wallets.

Use Cases for Smart Contract Wallets & Smart Accounts

Although smart accounts are new as an Ethereum standard, they have many use cases. Here are some of the most important ones:

  1. Recoverable wallets: Smart accounts enable the development of recoverable crypto wallets without the need for EOAs, private keys, or seed phrases.
  2. Auto-create wallets for app users: Companies or projects can easily generate new non-custodial crypto wallets for their users the moment they sign up. Users will no longer have to worry about managing private keys or remembering seed phrases.
  3. Team wallets: Teams can set up team wallets using smart accounts, where they can add multiple users with tiered permissions, thus giving them only the required level of control.
  4. Custom transactions: Smart accounts offer a range of customizations for transactions, such as setting transaction limits, specifying durations within which transactions are approved without signers, blocking certain transactions or requests, etc.
  5. Automated transactions: In the case of smart accounts, you can define a range of parameters such as access to specific tokens, spend limits, duration, gas limit.
  6. Batch Transactions: Using smart accounts, we can batch multiple transactions together and approve all of them at once. For the first time, this can make DeFi transactions feel as simple as traditional finance transactions.
  7. Gas upgrades: ERC-4337 introduced the ability for dApp developers to pay the gas on behalf of their users. This can be especially useful for free NFT mints or other kinds of airdrops. Further, smart account users can add fees in any ERC-20 token they prefer, compared to EOAs that only allow gas to be paid in ETH.

Challenges associated with ERC-4337

  1. Compatibility issues: Not all dapps can currently verify the validity of signatures from contract accounts. Implementing EIP-1217will enable this.
  2. Gas costs: Ethereum is still expensive to use. In the near to mid-term, ERC-4337 will gain more adoption on layer-2 chains.
  3. Scalability: ERC-4337 only focuses on making web3 wallets more user-friendly. It doesn’t directly affect scalability or transaction speeds in any way.


ERC-4337 represents a game-changing, user-friendly innovation within the Ethereum ecosystem. By achieving account abstraction without changing the core blockchain protocol, Ethereum has paved the way for creative wallet designs and improved user experiences. With simplified setup processes, worry-free account recovery, enhanced security measures, and customizable wallet functions, ERC-4337 has the potential to accelerate the mass adoption of Ethereum. As developers continue to explore the possibilities offered by this standard, we can expect an exciting future where the crypto interface becomes as simple and accessible as any other mainstream application.

The impact of ERC-4337 will be profound, not only for Ethereum users but for the entire crypto landscape. As we keep an eye on the developments in the coming years, it will be fascinating to witness how ERC-4337 shapes the user-experience and catalyzes the growth and adoption of blockchain.

How MindzKonnected can help

At MindzKonnected, we specializes in smart contracts and helps businesses harness the potential of ERC-4337. With our expertise, we assist businesses in creating user-friendly and secure wallet solutions, leveraging the benefits of simplified setups, improved security, and enhanced functionality.

As the impact of ERC-4337 unfolds, we stay at the forefront, delivering high-quality solutions and empowering businesses to thrive in the new era of user-friendly crypto wallets. Reach out to us for transformative growth & checkout our website for more information.

Blog Highlights

  1. ERC-4337 allows you to bundle and automate transactions on Ethereum.
  2. ERC-4337 allows for social recovery of crypto wallets, biometric authentication of transactions, and the ability to store a wallet’s private keys on a smartphone security module.
  3. The features made possible by the ERC-4337 standard are also available on EVM-compatible blockchains.
  4. The ERC-4337 standard adds new features to Ethereum without the need for a major Ethereum blockchain protocol update.

The goal is to eventually provide the features made possible through ERC-4337 through a major Ethereum protocol update.