ERC-4337: Redefining the way Ethereum accounts work

Why We Need ERC-4337

Ethereum wallets once faced a difficult “dilemma”: either use EOA (Externally Owned Account) for simplicity but sacrifice flexibility and security; or use a smart contract wallet, gaining programming logic but needing to manage two accounts simultaneously. This is why ERC-4337 emerged.

In March 2023, the ERC-4337 standard was officially deployed on the Ethereum mainnet in the form of smart contracts. This is not a modification of the underlying protocol, but a complete specification implemented at the application layer – allowing developers to create wallet systems with account abstraction, leading to a qualitative leap in user experience.

What ERC-4337 Does

The core innovation of ERC-4337 is account abstraction — combining the advantages of EOA and smart contract accounts into one. In simple terms, it allows a single smart contract account to initiate transactions, interact with tokens, and support custom validation logic.

This standard was initially proposed by Vitalik Buterin and the Ethereum developer community in 2021 (initially numbered EIP-4337) and was officially established as an ERC standard in 2023. Although the tech community sometimes still uses the old term “EIP-4337”, the official name is now ERC-4337.

How the Technical Architecture of ERC-4337 Works

ERC-4337 introduces a brand new transaction type - UserOperation. These operations do not go through the traditional Ethereum transaction pool, but instead enter an independent off-chain memory pool.

The key role here is bundlers. Their job is to collect and aggregate these UserOperations, then package them into standard Ethereum transactions and submit them to the blockchain. Bundlers pay gas fees for this and receive compensation from the fees embedded in UserOperations - unlike consensus validators, they are more like facilitators of transactions rather than security providers.

The center of all this is a core smart contract — EntryPoint. It serves as a secure execution gateway, responsible for verifying and processing each UserOperation. Each wallet implements a verification function (such as validateUserOp) to execute custom authorization logic.

The brilliance of this architecture lies in the fact that it can achieve a highly programmable and flexible wallet system without any modification to the Ethereum consensus layer protocol.

What practical problems does ERC-4337 solve?

Traditional EOA wallets rely on private keys and mnemonic phrases, and users are helpless once they lose this information. The smart contract solution that manages two accounts is both complex and inefficient, often relying on centralized relay services.

ERC-4337 eliminates these pain points through a unified architecture:

• Flexible verification logic: Wallets can implement multi-factor authentication, social recovery mechanisms, and even transaction whitelists.
• Gas Abstraction: Users do not have to pay gas fees with ETH; they can use ERC-20 tokens or other assets, paid on behalf by a third-party intermediary.
• Account Recovery: Losing your private key does not equal losing your assets; social recovery allows friends to help you regain access to your account.
• Batch Operation: Aggregate multiple UserOperations into a single on-chain transaction to reduce overall gas consumption.

What Does It Mean for Ordinary Users

These technological changes translate into user experience as:

• Wallet creation becomes easier: No need to remember complex mnemonic phrases, you can recover using an email or social account.
• Enhanced Security: Automatically protects against private key leakage risks and supports multi-factor authentication.
• More Flexible Payments: Pay gas with stablecoins like USDC and DAI, without needing to purchase additional ETH.
• More Features: Regular automatic deductions, pre-authorization transactions, emergency freezing, and other advanced features are at your fingertips.

The Deeper Significance of ERC-4337

The three main goals of ERC-4337 are: account abstraction, decentralization, and no protocol upgrades. It supports innovative uses such as aggregated signatures, daily transaction limits, emergency freezing, and privacy protection applications. By aggregating multiple user actions, it can also significantly reduce on-chain costs and improve network throughput.

Currently, this standard is still evolving, and ecosystem integration still needs improvement, but ERC-4337 is already accelerating towards making cryptocurrency wallets easier to use and more secure.

For developers, ERC-4337 provides a clear technical framework that allows them to build truly programmable account systems on Ethereum—not as a workaround, but based on well-designed standards. This is a necessary step for crypto wallets to move towards mainstream applications.