ERC-4337 — Misconceptions and Valid Concerns

At ZeroDev, it’s our job to help devs learn and adopt AA, so naturally we have come across a lot of questions, concerns, and objections.

In this post, I’d like to summarize some common pushbacks against ERC-4337 and AA in general, and I will group them into three categories:

• Misconceptions: things that are just not true.
• Yes and no: somewhat true, but the reality is nuanced.
• Valid concerns: real issues that need to be addressed.

Let’s dive in!

Misconceptions

AA is no big deal because SCW has been around for years

Without AA, smart contract wallets (SCW) like Safe/Argent are not “first class citizens” on the blockchain—you cannot initiate transactions directly from them. Rather, you have to:

• Call the SCW from an Externally Owned Account (EOA), meaning you still need a simple wallet before you can own a smart one.
• Rely on a centralized relaying service to relay your transactions, exposing you to risks like censorship and downtime.

With AA, however, you can directly send transactions from an SCW, the same way you can directly send transactions from MetaMask. This makes it possible to use an SCW as your only wallet.

You still need an EOA to own an AA wallet

This confusion stems from the fact that most AA wallets today are owned by a private key (like EOA wallets). However:

• Private key $\ne$ EOA: The key is just a key used to sign transactions for the smart contract account. The corresponding EOA is only used as a public key for validating signatures.
• Since AA enables transactions to be validated with a smart contract, the validation logic can be arbitrary. You don't technically even need a private key. Here’s a proof of concept using fingerprints instead of private keys.

We don’t need AA if we have MPC

MPC (Multi-Party Computation) and AA address different aspects of the user experience:

• MPC improves the key management experience by providing a "virtual private key" without ever having to store it, a huge improvement over seed phrases.
• AA improves the transaction experience by abstracting away who pays gas, what tokens are used, and how transactions are signed.

MPC and AA are complementary. In fact, combining MPC with AA makes it possible to offer social AA wallets.

Yes and No

AA transactions are more expensive

Since AA uses smart contract wallets, each transaction necessarily has some overhead compared to the equivalent EOA transaction, plus the one-time cost of deploying the SCW.

However, multiple factors lower the transaction cost in AA’s favor:

• Batching Transactions: An SCW can batch multiple actions (e.g., approve $\to$ swap $\to$ deposit) into one atomic transaction, saving gas compared to multiple EOA transactions.
• Signature Aggregation: ERC-4337 supports signature aggregation, allowing multiple AA transactions to effectively “share” a signature, lowering the cost for each. Here are some numbers from Vitalik.
• Counterfactual Deployment: ERC-4337 does not deploy the smart contract account until the user’s first transaction. Before then, the account exists “counterfactually” (it has an address but is not deployed), allowing users to receive assets without paying any deployment cost upfront.

As a result, whether AA transactions cost more depends on the workload. For some applications (notably DeFi), AA transactions might end up being cheaper!

AA is not ready for production

While building on AA/ERC-4337 today involves more technical risk as a "trailblazer," everything needed to build a full AA application, including ERC-4337 itself, is already running in production/mainnet.

We are at an inflection point where you are either building one of the last non-AA applications, or one of the first AA applications.

AA is not compatible with existing DApps

AA is compatible with the vast majority of DApps because it correctly uses msg.sender (unlike previous "meta transactions").

The compatibility issue arises when a DApp asks the wallet to sign a message. Since EOA signatures and SCW signatures cannot be verified the same way, DApps must implement the standard ERC-1271 to be compatible with smart contract wallets.

If a DApp requires message signing but doesn’t support ERC-1271, then AA won’t work with that DApp. Fortunately, there is community alignment that ERC-1271 needs to be supported, and new DApps typically support it by default.

ERC-4337 is not real AA. We should wait for real AA

When some say ERC-4337 is not “real” AA, they mean it is NOT integrated into the blockchain protocol itself (unlike "enshrined" AA on networks like zksync and StarkNet).

Ethereum has not enshrined AA because: 1) it would be protocol-breaking and require a hard fork, and 2) there is no consensus on the best implementation approach.

Since ERC-4337 is implemented as smart contracts, deploying it to a new EVM chain is fast. This is why ERC-4337 is already running on all EVM chains today.

The distinction matters little to the end users—from their perspective, their transactions “just work” either way. Given the community buy-in, ERC-4337 is the best near-term hope for achieving AA on EVM blockchains.

Valid Concerns

ERC-4337 is fairly centralized right now

In theory, ERC-4337 is designed so that anyone can spin up relayers (aka “bundlers”).

In practice, however, most bundler implementations except for StackUp are not production-ready. This means most ERC-4337 traffic is currently going through StackUp, similar to how most Ethereum traffic goes through Geth. This is expected to change as other bundlers go into production.

ERC-4337 may still change

While ERC-4337 has been deployed on mainnet, it is not technically finalized. The EIP is still in draft status, and the core team acknowledges that the EIP and core smart contracts could still change.

Fortunately, it's expected that any changes won’t affect the core account interface, meaning current ERC-4337-compatible wallets will most likely remain compatible.

ERC-4337 has not been formally verified

While ERC-4337 has been audited, it has NOT been formally verified. This means one cannot completely rule out the possibility of critical security issues.

Fortunately, teams are working on the formal verification of ERC-4337. Once formally verified, it is expected to be finalized.

The Bottom Line

Anyone building on AA today is a trailblazer taking on technical risks, no doubt about it. But with risk comes reward — if properly executed, your project will dwarf your competition in terms of usability.

At ZeroDev, we’ve developed an AA framework that dramatically shortens the time — and reduces the risks — for devs to build wallets and DApps on AA. Check out ZeroDev and start building the future of Web3 today!