Account Abstraction 2024

Introduction

In 2023, ERC-4337 landed, and the broader community around account abstraction took hold (last year’s review article). ERC-4337 defined the core infrastructure to enable contract accounts (i.e., Smart Accounts) to transact without relying on Externally Owned Accounts (EOAs) or a centralized actor. It also paves the way for native account abstraction. Although the short-term impact of ERC-4337 was overhyped, it established a community of early innovators who have been building the foundations for an incoming wave of mass adoption of Smart Accounts. The meat of this article will focus on the technical milestones and significant product launches in 2024, with a dedicated section at the end to 2025 predictions.

2024 in summary:

• Significant growth in Smart Account usage in 2024 – 40.5m accounts deployments vs. 7.23m in 2023 (adjusting for Worldcoin redeployments)
• ERC-7579 saw broad adoption from most top account abstraction projects after its initial release in Dec 2023.
• Keystore experimentation kicked off and set the stage for production-ready systems.
• EIP-3074 finally took center stage, paving the way for EIP-7702 and an ecosystem-aligned upgrade path for EOAs to Smart Accounts.
• Chain abstraction dominated the account abstraction narrative, with many teams contributing meaningful technical milestones to set up successful launches in 2025.

We also have some hot takes for 2025 predictions. To summarize:

• Smart Account deployments exceed 200m.
• New minimalist and specialized transaction infrastructure challenges ERC-4337 bundlers and paymasters.
• Chain abstraction (accompanied by EIP-7702) becomes the most significant catalyst for Smart Account adoption.
• DeFi super apps and agentic AI leverage Smart Accounts to take these product verticals to the next level.

2024 Data insights

Note: The two established ecosystems for account abstraction include the Safe and ERC-4337 ecosystems. Both have established and open-source reporting. Notable absences from these reports are Smart Accounts and UserOps created on appchains (or L3s).

In 2024, the Smart Account space saw meaningful growth! Safe deployed 28.7m accounts (6.5x its 2023 deployments), and 19.7m ERC-4337 native smart accounts were deployed (7x the 2023 deployments). A power law with major applications driving the lion’s share of activity still exists. Worldcoin has dominated the Safe ecosystem statistics, making up 19.5m in 2024. This is deceptive, as it does include a migration to Worldchain. Safe has self-reported 20.3m accounts, and we believe Worldchain migration makes up the difference. Similarly, in the ERC-4337 ecosystem, Earn’m (a rewards app) makes up 12.5m account deployments.

Transaction volume also saw a meaningful uplift. However, the delta between account growth and transaction volume growth is emblematic of the poor retention and repeat transactions performed by new Smart Account users. Safe did over 151m transactions in 2024, which is 8.5x the number of Safe transactions in 2023. Worldchain comprised 47% of this volume (likely driven by the weekly airdrop mechanic). Within the ERC-4337 ecosystem, over 100m userOps were completed, over 10x the 4337 transaction volume in 2023.

The vast majority of smart account adoption comes from new users and new applications. Without significant breakout applications, retention and ongoing activity within the account abstraction space are still lacking. Safe’s mainnet retention and activity are strong. However, restricting attention to L2s, we find that 12-week retention across Safe and ERC-4337 looks similar. Below is the retention chart for Safe’s Optimism accounts (its most popular L2 network) and all ERC-4337 accounts across all L2s.

Figure 1: ERC-4337 Account Retention (Source)

Figure 2: Safe Account Retention on Optimism (Source)

Technical Developments

ERC-7579 Gains Wide Adoption

ERC-7579 was launched in December 2023 and is now the leading standard for Modular Smart Accounts and the ecosystem’s answer to account extensibility, interoperability, and portability. ZeroDev was the first to adopt the standard with the launch of the Kernel V3, with many other notable companies announcing support soon after. The biggest names include Safe (via our collaboration on the ERC-7579 adapter), Biconomy (through the recent launch of the Nexus), OKX (Smart Wallet), Thirdweb (new account), Pimlico, Open Zeppelin, Trust Wallet, Solady, Etherspot and many more.

Keystore Experimentation

Keystore, an important Smart Account primitive for cross-chain key management, was defined by Vitalik in 2023, and the first significant research and technical contributions were made in 2024. Scroll released a teaser on a Keystore approach that provided a hybrid between a minimal keystore rollup and fully utilizing Ethereum L1 as the source of truth for wallet key configuration. This hybrid approach stores key configuration data on L1 but allows updates from L2. This creates data security (via Ethereum) while delegating more expensive operations to the user’s chosen L1 (we experimented with Scroll’s Keystore). This data is read through an L1SLOAD, which not all L2s currently support. Scroll has since pivoted its Keystore solution to be a Scroll ecosystem feature via a dedicated Shared Keystore Gadget.

In early 2024, Coinbase announced Keyspace, which aligned closely with Vitalik’s proposal. However, there has been minimal activity since, and updates on the roadmap should be expected in early 2025. And finally, Axiom, a modular zkVM framework, announced Axiom Keystore with devnet launching in Q1 2025, focusing on the OP Stack with more L2 ecosystems to come.

EIP-3074 (RIP) Gives Birth to EIP-7702

The most exciting technical development of 2024 was the announced inclusion of EIP-3074 in Pectra. It ultimately sparked the necessary debate that led to Vitalik’s hail mary, EIP-7702, drafted 20 minutes before a community call to help the ecosystem find a path forward. EIP-3074 would have introduced new opcodes into the EVM, allowing an EOA to delegate control to a Smart Account. EIP-7702 achieves the same objective via a new transaction type but with my tighter alignment to the ERC-4337 roadmap for native account abstraction. If you want a more detailed overview of this debate, check out ZeroDev’s blog post.

EIP-7702 is widely regarded as the inflection point for Smart Account adoption. It allows EOAs to inherit Smart Account features but with a tiny caveat: the EOA’s private key remains the “master key” to the user’s account. Therefore, features like key recovery, multisig, and resource locking natively within the account are impossible with EIP-7702. Check out our deep dive for more on the standard and how Smart Account implementations need to change to become compatible.

Chain Abstraction Takes Over the Narrative

Chain Abstraction and resource locking were among the most significant technical developments of 2024 and have captured the attention of almost all major account abstraction teams. Ethereum’s horizontal scaling strategy has fragmented liquidity, and Smart Accounts provides an answer we could argue is the first 10x UX improvement over EOAs.

First introduced by Connext (now Everclear) and Orb Labs, but popularized by the CAKE framework and Magicspend++, multiple variations on Chain Abstraction emerged in 2024. All implementations depend on two core elements: resource locking and intents. The two most notable technical developments include The Compact (from Uniswap), an open-source framework for resource locks via an escrow contract, and ERC-7683 for standardizing intents’ interface and data structure. There are multiple emerging approaches to resource locking, all of which are covered here.

Product Launches & Announcements

ERC-7579 Module Ecosystem Grows

Smart Account Modules are self-contained smart contracts that can extend the feature set of a Smart Account. ERC-7579 defines the minimal interfaces and functions for modules to be interoperable across any compliant Smart Account implementation. Since the launch of the standard, over 35 modules have been tracked on erc7579.com, and many more are under development. This includes all Core Modules (passkeys, social recovery, scheduled orders, etc) supported by the ModuleSDK, Smart Sessions (a session key framework for 7579 accounts), and ZK Email’s private recovery module.

Chain Abstraction Launches (Supported by 7579 Modules)

Modules have also played a pivotal role in enabling Chain Abstraction. OneBalance announced an account framework that employs an ERC-7579 Validator Module to provide resource locks. This module is a root validator that co-signs all operations on the account. Klaster (acquired by Biconomy) announced their interchain transaction module that allows users to sign a Merkle Tree root with cross-chain instruction sets encoded in the Merkle Tree leaves. This core mechanism enables Biconomy’s Modular Execution Environment (MEE). ZeroDev and Socket announced Magic Account, the first Magicspend++ implementation, which utilizes session keys to seamlessly move user funds between the user’s Smart Account and the Magicspend++ escrow contract. Although technical details are low, SafeNet proposes using Safe Guards, a Module type in the Safe ecosystem, to enforce resource locks (with ERC-7579 support coming in 2025). It’s incredible to see this innovation on ERC-7579, which is uniquely enabled through Smart Account Modules.

DeFi Super Apps Building on Smart Accounts

Smart Accounts are one key ingredient in offering a CEX-like trading platform, but DeFi. Batching, gas abstraction, and session keys unlock a smooth UX while enabling powerful features without compromising self-custody. Instadapp and DeFiSaver are two early trailblazers, but unlike today, these teams had to build their entire account stack from scratch.

In 2024, developer tools and infrastructure have advanced to a state where the complexities of Smart Accounts are entirely abstracted, allowing new teams to focus on the tech that differentiates them. Infinex’s launch was a clear example of the DeFi super app vision, but smaller teams have been better showcases of what today’s tooling can unlock. Picnic, a neobank-like app built on crypto rails and servicing the South American market, is a perfect example. Zeal provides a similar proposition. These projects leverage existing Smart Account infra, focusing on mixing the right service integrations (e.g., on-ramp and IBAN) with existing DeFi protocols to create a great end-user product experience.

AI Agents

Truth Terminal and Virtuals have driven huge hype in blockchain-enabled AI agents. Smart Accounts, specifically modules, provide a compelling means for AI Agents to have scoped access/permissions to a given account. An early example is Olas Network, an autonomous agent economy built on Smart Accounts. In 2024, Olas activity skyrocketed, accounting for over 50% of Safe transactions on Gnosis Chain in September (39% of all transactions for the year).

2025 Predictions

Smart Accounts Exceed 200m Unique Addresses

2025 is the beginning of J-curve growth in Smart Account adoption. 2024 was a 5x growth yoy for Smart Account deployments with c.40m unique accounts (adjusting for Worldcoin redeployments). Continuing this trajectory will see the market reach 200m, which is a reasonable assumption given the current market cycle, the tailwinds from EIP-7702, and the emergence of a new autonomous onchain actor (AI Agents).

EIP-7702 will see a meaningful portion of the existing 220m unique addresses upgrade to a Smart Account via their current wallet provider (e.g. MetaMask or OKX Wallet). Based on our conversations with the relevant teams, most new accounts activated through embedded wallets post-EIP-7702 will be full Smart Accounts or delegated EOAs (we see the latter as more favorable in the short term). Finally, Chain Abstraction will provide the first wallet UX compelling enough to make existing EOA users question why they are so attached to MetaMask and other “old guard” wallet providers. Users will fully migrate to a Smart Wallet that is Chain Abstracted (which EIP-7702 makes incredibly simple), or the old guard will utilize EIP-7702 to get feature parity. Based on our conversations with wallet providers, we don’t see the old guard as early first movers.

ERC-4337 Infra Will Meet New Competition

ERC-4337 infrastructure is beautiful but complex. Its uncompromising objective of being decentralized introduces attack vectors that would not exist under a more centralized system. Systems with lower latency or specialized features may outcompete fully compliant 4337 infrastructure within specific product verticals. In these verticals, the open mempool becomes a fallback for liveness and censorship. We may also see supporters of EIP-7702 opt for a more minimalist transaction infrastructure.

Example verticals:

• Intent-based systems: Successful solvers run highly performant, bespoke systems to manage liquidity and protocol routing. ERC-4337 introduces another layer of complexity that will be slowly adopted or avoided altogether. As intent systems grow, we expect 4337’s market share to fall.
• Account Automation (incl. AI agents): The userOp validation phase has storage restrictions to prevent DOS attacks. This imposes design restrictions when automating account behavior in response to external systems. This could motivate bundlers to break 4337 compliance and remain private, opening the door to other competing systems.

DEX Super Apps Built on Smart Accounts

Infinex’s mission to steal users from Binance is a simple way to explain what’s now possible today with existing Smart Account and DeFi infrastructure. In 2025, genuine challengers to both CEX and TradFi neobanks (FinTech) will be built on Smart Accounts by small and nimble teams with deep expertise in building user-facing products, not solidity contracts. Sling.money, a Solana product, exemplifies how far a team can go with abstracting the underlying blockchain rails. In 2025, many teams will crop up and challenge the establishment with an edge in either a region or user-persona built on Smart Accounts.

An alternative narrative sees small teams in existing establishments (especially given the changing regulatory environment) like Revolut, Robinhood, and Kraken fully embracing the most cutting-edge technology (e.g., Smart Accounts) and going head-to-head in the DeFi arena. It wouldn’t be surprising to see an acquihire of one or two account abstraction teams to increase velocity.

AI Agents Co-Tenant Smart Wallets

Virtuals and Olas allow an AI to control an independent crypto wallet. With Modular Smart Accounts (ERC-7579), users can delegate scoped control or access rights to an existing account, allowing for co-tenancy with an autonomous agent. This transforms Smart Wallets from a simple DeFi bank account to an Everything account where many agents can be put to work with various permissions — trading bots, voting/governance bots, social bots, etc.

Smart Sessions is an onchain foundational tool to enable this, and we are already speaking with teams exploring ways to extend this framework to cater to create privacy and allow for more complex permissions that can not be expressed onchain.

First App Ecosystem Emerges on ERC-7579 Compliant Wallet Stack

ERC-7579 promises wallet interoperability, extensibility, and portability, making Modules the Smart Account equivalent of smartphone apps. Ecosystems like Farcaster and Embedded Wallet providers can benefit immensely from having a single wallet implementation that any developer can extend with custom features without breaking the account's interoperability and portability across the ecosystem. We anticipate the first example of this emerging in 2025.

Conclusion

2024 was a year for the early account abstraction innovators to set the foundations for mass adoption in 2025. This year is gearing up to be big, and we couldn’t be more excited. Onward!