What does EIP-7702 mean for YOU? Part 1 -- The Adoption Cycle of 7702

This article was originally published on X.

This is part 1 of a series examining the impact that EIP-7702 is likely to have on different parts of the crypto world, including users, wallets, DApps, and infrastructure providers. In this first part, we examine how the adoption of 7702 is likely to play out.

What is EIP-7702

EIP-7702 is one of the EIPs slated to go live in Ethereum's next upgrade (Pectra), scheduled for Q1 2025.

With EIP-7702, an EOA (Externally Owned Account) can "upgrade" itself into a smart account, while simultaneously remaining an EOA and keeping the same address. Once upgraded, the user can then experience most of the benefits of Account Abstraction (AA) such as gas sponsorship, transaction batching, and passkeys.

How EIP-7702 Differs from ERC-4337

EIP-7702 is a major boost to AA adoption for critical reasons:

• Upgrade Existing EOAs: You can upgrade existing EOAs into 7702 smart accounts, whereas ERC-4337 requires creating new accounts.
• Best of Both Worlds: A 7702 account is simultaneously an EOA and a smart account. This gives the user smart account capabilities alongside EOA compatibility with legacy DApps.
• Protocol Level: EIP-7702 is an EIP (part of the Ethereum protocol), so L1 and all L2s will get it automatically, unlike ERC-4337 which requires specific contract and infra deployment.

However, EIP-7702 will not "kill" ERC-4337. In fact, 7702 will need to leverage ERC-4337 infrastructure (like bundlers and paymasters) to achieve its full potential.

How Fast Will 7702 Adoption Happen?

The likelihood of adoption scenarios is ranked as follows: Huge adoption over a short time (within a year) > huge adoption over a long period (1–3 years) >> not adopted overnight > completely ignored.

In short, 7702 will likely achieve massive adoption within a few years, but it will not happen overnight. To see why, let's examine the adoption cycle.

How Standalone Wallets Will Adopt 7702

Standalone wallets (e.g., MetaMask, Coinbase Wallet) will be upstream in the adoption cycle. They have three options:

1. Full Embrace (Default On): Implement 7702 and enable it by default for all users. (Less likely for top wallets).
2. Partial Embrace (Opt-In): Implement support for 7702 but require users to opt into the feature. (Most Likely for Top Wallets).
3. Wait-and-See: Do nothing until competition forces adoption. (Most likely for the long tail of wallet companies).

Prediction: The most important wallets, such as MetaMask and Coinbase, will quickly implement support for 7702 but require users to opt into it (Option 2).

Why Top Wallets Will Quickly Support 7702

Top wallets are well-funded, understand the paradigm shift, and have the most to lose in the hyper-competitive wallet space. The fear of missing out will drive them to adopt 7702 quickly.

Why Top Wallets Will Require Opt-In

In one word: Security.

• Security Tradeoffs: 7702 improves security by enabling session keys (privilege de-escalation) to sandbox DApp interactions, reducing phishing risk. However, it also introduces smart contract risk (non-zero chance of bugs) and fails to eliminate the core risk, as users still need to secure their EOA private key (seed phrase).
• Risk Aversion: Because the security trade-offs are nuanced, existing top wallets won't risk user security by enabling 7702 by default. They will offload the decision to users via an opt-in feature.

Will Users Opt Into 7702?

Users will enable 7702 only if they really want to use a DApp or feature that requires 7702; otherwise, they won't. This shifts the focus to DApp adoption.

How DApps Will Adopt 7702

DApps have a strong incentive to leverage AA's value propositions: Gas Sponsorship, Transaction Batching, Transaction Automation (Session Keys), and Chain Abstraction.

The reason DApps haven't adopted AA much yet is that ERC-4337 forced them to exclude 99% of their users (EOA users). With 7702, DApps can offer AA benefits without turning away EOA users, making the cost/benefit calculus much more favorable.

The Chicken-and-Egg Problem: DApps won't support 7702 if few users have enabled it, and users won't enable 7702 if few DApps support it.

How Embedded Wallets Will Break the Cycle

Wallet services (embedded wallets)—like Privy, Dynamic, and Turnkey—will play a key role.

• Developer Choice: The choice to enable 7702 for embedded wallets will rest with the DApp developer (as these are new wallets created for users).
• No Waiting: Developers won't need to wait for users to opt into 7702 for their MetaMask; they can immediately use 7702-enabled embedded wallets to offer AA features.
• Inclusivity: Crucially, with 7702, developers do not have to exclude EOA users when building with embedded wallets, as their app can support both.

Putting Everything Together (The Virtuous Cycle)

1. Embedded Wallets implement 7702 support for DApp developers.
2. Innovative DApps implement AA features using 7702-enabled embedded wallets.
3. Adventurous EOA Users see these DApps and turn on 7702 for their standalone wallets.
4. Slower DApps see the user numbers and begin leveraging 7702.
5. Slower Users enable 7702 to access new apps and experiences.
6. The Long-Tail of Wallets is forced to support 7702 to remain relevant.

This virtuous cycle of wallets $\to$ dapps $\to$ users $\to$ wallets is expected to drive the space toward massive AA adoption, bringing a 10x improvement to Web3 UX.