Account Abstraction and Smart Wallets: ERC-4337 and EIP-7702
Account abstraction lets code, not one key, control your wallet. How ERC-4337, EIP-7702, passkeys, paymasters and social recovery work, and their risks.
Account abstraction lets a crypto account be controlled by code rather than by a single private key. A smart wallet uses that code to decide what counts as a valid transaction, so it can accept a passkey or Face ID instead of a seed phrase, let someone else pay the gas, bundle several actions into one click, and recover access through trusted guardians if a device is lost.
On Ethereum this arrived in two steps: ERC-4337, a smart-account standard that runs without changing the protocol, and EIP-7702, which in May 2025 let ordinary wallets borrow smart-wallet features. This guide explains both, the features they unlock, the new risks they bring, and how Sui and MultiversX offer similar features natively.
What is account abstraction?
Ethereum has two kinds of account. An externally owned account (EOA) is a key pair: whoever holds the private key can do anything, and losing it means losing everything. A contract account holds code but, historically, could not start a transaction by itself.
"Abstraction" means separating who you are from how you prove it. With account abstraction, the rules for validating a transaction live in the account's own code. The account can require one signature, two out of three, a passkey, a daily spending limit or a time lock, and those rules can change later without moving your funds to a new address.
A smart wallet (also called a smart account or smart contract wallet) is simply a wallet built on this idea. It is still self-custodial when you control the signing keys or factors; the code just gives you more options than "one key, all powers". Our guide to non-custodial wallets covers the custody side.
ERC-4337: smart accounts without a hard fork
ERC-4337, titled "Account Abstraction Using Alt Mempool", was created on 29 September 2021 by authors including Vitalik Buterin and Yoav Weiss, and is now marked Final. Its key design choice is that it "completely avoids the need for consensus-layer protocol changes". Instead of a new transaction type, it adds a layer on top of Ethereum.
The moving parts are:
- UserOperation: a pseudo-transaction describing what you want your smart account to do. You sign this rather than a normal transaction.
- Bundler: a node that collects UserOperations from a separate mempool and packs them into a real transaction.
- EntryPoint: a single shared contract that checks each operation against the account's own validation code and then executes it.
- Paymaster: an optional contract that agrees to pay gas on the user's behalf, or to accept payment in a token such as USDC.
- Factory: a contract that deploys your smart account the first time you use it.
The audited EntryPoint contract went live on Ethereum on 1 March 2023, after an OpenZeppelin audit, and was deployed on several other EVM networks including Polygon, Optimism, Arbitrum, BNB Chain, Avalanche and Gnosis Chain, The Block reported. Because ERC-4337 is a contract standard rather than a protocol rule, the same model also works on rollups; see our explainer on layer 2 crypto.
The catch is that an ERC-4337 smart account has a new address. If you already hold assets in an EOA, you have to move them, and that friction is why the next step mattered.
EIP-7702 and the Pectra upgrade
EIP-7702, "Set Code for EOAs", adds a new transaction type that lets an existing EOA point to smart-contract code. The account signs an authorisation, and from then on its code field holds a delegation indicator, so calls to the account run the delegated contract's logic. Your address and balances stay the same.
EIP-7702 shipped in the Pectra hard fork, which activated on Ethereum mainnet at epoch 364032 (timestamp 1746612311, which is 7 May 2025). The ERC-4337 specification now lists EIP-7702 as a requirement and supports 7702 authorisations, so the two work together: an upgraded EOA can use bundlers and paymasters like any smart account.
Two things are worth knowing:
- The original key still works. Delegating code does not remove the EOA's private key, so anyone with that key can still sign for the account. EIP-7702 adds features; it does not make a leaked key safe.
- A delegation is powerful. Signing a 7702 authorisation hands control of the account's behaviour to whatever contract you point it at. A malicious target can drain everything in one transaction.
What smart wallets let you do
Most of the practical benefits fall into five groups.
Passkeys instead of seed phrases
A passkey is a WebAuthn credential stored in your phone's secure chip, a laptop or a hardware security key, unlocked with Face ID, a fingerprint or a PIN. These keys use the secp256r1 (P-256) curve, which Ethereum could not verify cheaply until the EIP-7951 precompile. That precompile shipped in the Fusaka upgrade, which activated on Ethereum mainnet on 3 December 2025 at 21:49:11 UTC, per the Ethereum Foundation. It lets a smart account check a phone's signature on-chain, so the phone itself becomes the wallet key. If you are used to writing down twelve words, our seed phrase guide explains what a passkey replaces.
Gas sponsorship and paying fees in stablecoins
A paymaster can cover the gas for a user's first transactions, or let them pay fees in USDC rather than ETH. For a newcomer this removes the "buy ETH before you can do anything" step. Our explainer on gas fees covers what is being paid.
Batching
One signature can approve a token and deposit it, or swap and stake, in a single atomic operation. If any step fails, the whole batch reverts, so you are not left with a half-finished position.
Social recovery and multi-factor rules
The account's code can name guardians, such as a second device, a hardware wallet or trusted friends, who together can rotate the signing key if you lose it. The same idea, applied to signing rather than recovery, gives you an m-of-n set-up like a multisig wallet.
Session keys and spending limits
A game or trading app can get a temporary key that may only call certain contracts, up to a set amount, for a set time. You approve once rather than for every move, and the damage from a leaked session key is capped.
EOA vs ERC-4337 vs EIP-7702 vs MPC
| Approach | Where the rules live | Keeps your address? | Main trade-off |
|---|---|---|---|
| Plain EOA | One private key | Yes | Simple, but one key controls everything |
| ERC-4337 smart account | Account contract on-chain | No, new address | Flexible, but contract risk and higher gas |
| EOA with EIP-7702 | Delegated contract | Yes | Smart features, but the original key still has full power |
| MPC wallet | Off-chain key shares | Yes | Works on any chain, but rules are enforced by the provider's software |
MPC and account abstraction solve overlapping problems from different ends. MPC splits one key so no single party holds it; account abstraction changes what the chain accepts as proof. Our MPC wallet explainer goes deeper.
Risks and trade-offs
Smart wallets remove some failure modes and add others.
- Smart contract risk. Your account is code. A bug in the account, the EntryPoint version it uses, a module or a paymaster can lock or lose funds. Prefer audited, widely used implementations.
- Malicious delegations. In the first weeks after Pectra, Wintermute found that over 80% of EIP-7702 delegations pointed to copy-pasted "sweeper" contracts that automatically drain wallets whose keys had already leaked, The Block reported on 1 June 2025. Treat any request to sign a delegation like a request to hand over the account. Our guide to wallet drainers and approval phishing covers how these prompts are disguised.
- Cloud and vendor dependence. A synced passkey is only as secure as the Apple or Google account behind it. The Sui documentation warns not to rely on a single passkey as the only custody method for high-value accounts.
- Infrastructure dependence. Bundlers and paymasters are services. If a paymaster stops sponsoring, you need native gas again; if a wallet vendor disappears, you need a way to reach your account without their app.
- Chain differences. A smart account deployed on one network does not automatically exist on another, and recovery settings do not copy across.
Native equivalents on Sui and MultiversX
Non-EVM chains built several of these features into the protocol itself rather than adding them as contracts.
Sui zkLogin lets you send transactions from a Sui address using a Google, Apple, Facebook or Twitch login, among other providers live on mainnet, without publicly linking the two, per the Sui docs. Your address is derived from the login plus a per-user salt, and a zero-knowledge proof shows you hold a valid credential. Sui describes it as non-custodial, a 2-of-2 between the login and the salt, and it warns that losing the salt means permanently losing access to that address.
Sui sponsored transactions let one address pay the gas for another, so an app can onboard users who hold no SUI, according to the Sui developer docs. Sui also supports passkey signatures and native multisig, and zkLogin and passkeys can both sit inside a multisig for recovery. For wallet options, see the best Sui wallets.
MultiversX Guardians add on-chain two-factor authentication: once a guardian is active, each transaction needs the guardian's co-signature as well as the owner's. Setting a new guardian takes effect only after 20 epochs, and guarded transactions can be submitted through a relayer when the user lacks EGLD for fees, per the MultiversX docs.
Where JewelSwap fits
JewelSwap runs on MultiversX, Sui and Radix, so these native features are the relevant ones for our users. Any wallet that supports the chain can sign for liquid staking (JWLSUI, JWLEGLD, JWLXRD) or Sui farms. Whichever wallet type you choose, the basics from our self-custody wallets guide still apply: back up the recovery path and read every signing prompt.
Frequently asked questions
What is account abstraction in simple terms?
It means your crypto account is controlled by code instead of a single private key. The code decides what a valid transaction looks like, which allows passkey logins, gas sponsorship, batched actions, spending limits and social recovery.
What is a smart wallet in crypto?
A smart wallet is a wallet whose account is a smart contract, or an ordinary account that has delegated to one. It can still be self-custodial, but it adds programmable rules such as multiple signers, guardians and limits.
What is the difference between ERC-4337 and EIP-7702?
ERC-4337 is a contract-level standard, live on Ethereum since March 2023, that creates new smart accounts using bundlers, an EntryPoint contract and paymasters. EIP-7702, live since the Pectra upgrade on 7 May 2025, lets an existing wallet address delegate to smart-contract code, so users keep their address. The two are designed to work together.
Are smart wallets safer than normal wallets?
They can be, because they support recovery, multi-factor approval and spending limits. They also add smart contract risk and new phishing tricks, such as malicious EIP-7702 delegation requests, so safety depends on the implementation and on what you sign.
Do I still need a seed phrase with a smart wallet?
Not always. Many smart wallets use passkeys or, on Sui, zkLogin instead of a seed phrase. You still need a recovery path, such as guardians, a second passkey or a stored salt, because losing every factor can mean losing the account.
Does Sui have account abstraction?
Sui offers similar features natively rather than through a contract standard: zkLogin for OAuth-based sign-in, sponsored transactions for gas, passkey signatures and built-in multisig.
Keep reading
- What is an MPC wallet?
- Non-custodial wallets explained
- What is a multisig wallet?
- Best self-custody wallets in 2026
- Wallet drainers and approval phishing
This article is educational and is not financial or legal advice. Standard and upgrade details are from the Ethereum EIP pages, Ethereum Foundation, Sui and MultiversX documentation as checked on 17 October 2026; sources are linked inline. Wallet features change quickly, so check your provider's current documentation.
