I have been reading about the new ERC4337 proposal, however I have a question about its implementation:

  • If we abstract the Ethereum accounts and move completely from EOA to Smart Contract accounts, don't we still need to trust the wallet provider?

I see that the main problem about the EOA accounts is the private key management. If we lose it then there will be no way to retrieve it back, however with the account abstraction don't we need to trust the wallet provider now? I mean I see that we can batch transaction, someone can pay for their fees as well and choose our own security.

Lets imagine a user with 1 Ether create Smart contract account using a wallet provider that supports erc4337, instead of using ECDSA, the wallet provider uses simple social login or fingerprint, doesn't really matter. Then after some time this wallet provider just disappears and the user needs to change to another wallet provide. Does his social login or fingerprint will recover his wallet and he gets access back to his 1 Ether or not? I am trying to understand what is the difference from the custodial wallets?

2 Answers 2


When you create a smart contract account using a wallet provider that supports ERC4337, it's still essential to have a way of managing access to the account. Wallet providers could use a variety of methods for this, such as social logins, fingerprint scans, or other authentication methods. However, even with these alternative methods, you should still receive a private key or some form of seed phrase. This key or seed phrase will allow you to recover your account and access your funds in case the wallet provider disappears or you need to switch to another provider.

So, the main difference between a custodial wallet and a wallet using an ERC4337-based smart contract account is the level of control you have over your funds. With a custodial wallet, the wallet provider has full control over your private keys and funds. In contrast, with an ERC4337-based wallet, you have more control, and you can recover your account and funds using your private key or seed phrase.

In summary, while account abstraction with ERC4337 does require some trust in the wallet provider, it still provides more control and flexibility compared to traditional custodial wallets. It's essential to ensure that you securely store your private key or seed phrase, regardless of the authentication method used by your wallet provider.

  • Thank you very much for the detailed reply. I see that the main goal is to facilitate the new user onboarding, however I don't see much improvement except the fact that transactions can be batched and user can pay in different currencies. It looks like we still need to know how to secure the seed phrases generated from the wallet providers. I mean it is an improvement of course but private keys are still important, therefore new users still should have a basic knowledge about it.
    – Dakata
    Mar 18, 2023 at 17:26

Your question also assumes you will use a 'Wallet provider'. By Wallet provider, I am assuming that you're referring to 1. Wallets that dont incorporate ERC-4337 e.g MetaMask 2. Wallets that do incorporate ERC-4337 e.g Banana etc

AA is implemented with smart contracts functioning as Wallet Providers. Hence, the phrase 'Smart contract Wallet'. From the UserOp to Bundlers to Entry Point smart contracts, traditional services a wallet provider would have performed are incorporated into the AA owrk flow.

Therefore, the issue of trust doesnt arise as u can initiate your custom logic in the absence of both cases of wallet providers.

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