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Ethereum will undergo a major upgrade called Fusaka on December 3, 2025. This is the third milestone update of Ethereum since the Merge and Dencun upgrade. It is designed to significantly improve the scalability of the network, reduce transaction costs, and optimize node operating efficiency. It also focuses on upgrading and optimizing related functions regarding account abstraction.Account Abstraction (AA), as a major upgrade of the Ethereum account system, aims to solve the fundamental security and experience bottleneck of “private key is the account” in the EOA era, so that on-chain accounts have modern capabilities of programmability, recovery, and permission control.The implementation of ERC-4337 has accelerated the formation of the smart account ecology, but challenges such as high costs, unclear business models, ecological fragmentation, and cross-chain restrictions have made the adoption process “technologically advanced and promotion lagging.”With Rollup cost reduction, BLS signature aggregation, and EIP-7702 providing a painless upgrade path, AA is gradually entering the stage of scalable application.In the next five years, AA will become the “high-end intelligent layer” of accounts on the chain, but it will not replace EOA. Instead, it will coexist with the x402 interoperability protocol, jointly promoting Web3 from the geek stage to the mass era, and laying a foundational hub value for a unified Internet account system.
1. AA account development history and capabilitiesscenery
Ethereum will undergo a major upgrade called Fusaka on December 3, 2025. This is the third milestone update of Ethereum since the Merge and Dencun upgrade. It is designed to significantly improve the scalability of the network, reduce transaction costs, and optimize node operating efficiency. It also focuses on upgrading and optimizing related functions regarding account abstraction.In the Ethereum system, the evolution of the account structure actually constitutes the core logic of user experience, asset security and even industrial upgrading on the entire chain.The dual-account system of EOA (Externally-Owned Account) and CA (Contract Account) that we are familiar with today is the technical legacy of Ethereum since its launch in 2015. However, in the 2023-2025 stage when the number of users exceeds 10 million and Web3 gradually assumes responsibility for asset custody and user operation infrastructure, this system exposes increasingly serious structural bottlenecks.These bottlenecks not only limit the expansion of the industry, but also limit the scale of users and the implementation of real applications. The emergence of Account Abstraction (AA) is precisely to solve the natural structural defects of the Ethereum account system, so that the world on the chain can have “modern financial level” security, experience and autonomy capabilities, and ultimately become a trustworthy asset infrastructure carrying global users.The core reason why the current system has bottlenecks is that EOA has written the security model of “private key = asset” into the bottom layer of the protocol. This model is simple in engineering, but in practice it constitutes the biggest resistance to large-scale adoption.
The operation structure of EOA is like a “mechanized assembly line” rather than the “one-click execution” that modern Internet users are familiar with.In addition, in terms of permission control, EOA is completely unable to implement any fine-grained settings: it cannot set daily limits, cannot define multi-signature rules, cannot create parent-child accounts, cannot freeze some permissions, and cannot enable automated policies.EOA is like a master key that contains all assets and all permissions. As long as it is leaked once, all assets and permissions will be exposed.
Therefore, the Ethereum community began to rethink the question of “what an account should be”, and the concept provided by AA is exactly the right medicine: an account should be a “code” rather than a “private key”.Under the AA paradigm, accounts can be programmed, verified, restored, and upgraded.In other words, the restrictions that were hard-coded into the EOA architecture in the past can be abstracted. The wallet is no longer just a signature container, but can become a “smart account” with logic, strategy, and permission systems.The account abstraction was not proposed overnight, but went through a long design game, during which the core proposals included EIP-86, EIP-2938, ERC-4337 and the latest EIP-7702.Both EIP-86 and 2938 require modifications to the Ethereum consensus layer, so they have been difficult to implement; and the wonderful thing about ERC-4337 is that it builds AA in a “parallel system”, using UserOperation and Bundler to bypass underlying protocol modifications, allowing AA to be seamlessly enabled in the existing Ethereum ecosystem.The architecture of ERC-4337 essentially builds a new channel parallel to the transaction mempool, allowing users to no longer submit transactions, but submit UserOperation, which is then packaged, simulated, and aggregated by Bundler, and then uniformly sent to the EntryPoint contract for execution, thus enabling contract accounts to actively send transactions, batch execution, atomic operations, multi-signature verification and other capabilities.Although the engineering complexity is significantly increased, it is currently a realistic path to fully enable AA without a hard fork.During the evolution in 2024-2025, Vitalik proposed EIP-7702, hoping to further make the transformation of EOA and AA more natural, but it still needs to improve the ecological supporting facilities.The significance of AA is not only to solve the structural flaws of EOA, but also to bring the experience, security and cost capabilities of “intergenerational leap” to Ethereum.First of all, in terms of security, AA allows the wallet to have a programmable permission system: users can enable the social recovery mechanism and no longer worry about the loss of mnemonic words; they can set multi-signature rules to allow families, institutions or DAOs to manage funds more safely; they can create parent-child accounts, whitelists, and payment limits; they can even freeze certain permissions or use temporary keys to increase the flexibility of usage scenarios.The “single point failure” mode of EOA is completely eliminated by AA, and the security improvement is orders of magnitude.In the cost dimension, after AA introduces Paymaster, users can use any ERC-20 to pay gas, or even have the project party pay the gas on their behalf, achieving a true “no-fee” experience.In addition, AA supports batch execution and transaction aggregation, which greatly reduces the number of signatures and failure costs, significantly reducing the overall cost of complex interactions.At the experience level, AA makes the interactive experience of Web3 truly close to Web2 for the first time.Users can perform combined operations with one click and do not need to understand complex concepts such as nonce, gas settings, and signature sequences; new users can even create wallets without mnemonic words and complete account initialization through biometrics, local recovery, email verification, etc.; Complex on-chain logic (such as strategic transactions, automated liquidation, scheduled execution, etc.) can be embedded in the account logic, making on-chain applications as realizable as “smart products.”
AA’s ultimate vision is to move the blockchain from an “experimental system for technical experts” to a “universal account infrastructure for global users.”If the bottleneck of Web3 in the past ten years came from the original model of “key as account”, then the breakthrough of Web3 in the next ten years will come from the new paradigm of “account as program”.AA is not just an upgrade of the wallet, but a rewrite of the interaction logic on the entire chain; it not only improves the user experience, but also lowers the development threshold, enabling DApps to design processes, define permissions like Web2 products, and build a trustless security system at the account layer.As the ERC-4337 ecosystem fully explodes in 2024-2025, industrial chains such as Bundler, Paymaster, AA wallets, and modular security plug-ins are gradually taking shape, and account abstraction is changing from “idea” to “infrastructure.”Just as the evolution of the mobile terminal from Web1.0 to Web2.0 gave birth to super applications and trillions of industries, the implementation of account abstraction is expected to become the underlying driving force for the next exponential growth of Web3.The limitations of the EOA era are gradually being dismantled, and AA is leading the entire industry toward a safer, more flexible, and more public-friendly on-chain world.
2. Prospects and challenges of AA accountsfight
Account Abstraction (AA) has once again become the narrative core of the Ethereum ecosystem from 2023 to 2025, but after experiencing heat and expectations, the structural difficulties it faces are gradually exposed.The long-term prospects of AA still have high hopes – it promises to bring about a generational jump in security, usability and automated experience, and replace the original model of “private key as account” in the EOA era; however, in terms of actual implementation, the implementation of ERC-4337 has been questioned many times and is considered to be “big thunder but little rain”.From the four dimensions of industrial structure, cost model, ecological collaboration and competition agreement, the prospects and dilemmas of AA are intertwined, which not only represents the future of the blockchain account system, but also exposes the complexity of the protocol upgrade path.
From a cost perspective, the primary resistance to AA comes from gas.Compared with EOA’s 21,000 gas, AA’s UserOperation averages about 42,000 gas on the main network, which is almost double.This is not wasteful, but structural: the validation call of 4337 includes validateUserOp, EntryPoint state access, wallet contract bytecode reading, logging, initCode deployment, and data encoding overhead.Each link means additional on-chain calculations.Theoretically, AA is right to put complex logic to run in contract wallets, because real accounts should be programmable, verifiable, and controllable; however, Ethereum L1’s resources are expensive, making all designs—no matter how elegant—eventually converted into costs, and cost becomes the strongest obstacle to adoption.A large number of potential users and project parties are deterred by this.At the business model level, Paymaster, another core component of AA, faces the problem of unclear ROI.The structure of Paymaster is that the project party pays gas on behalf of the user in exchange for user growth or precipitated value.However, the problem is that there is no mechanism that allows the project side to clearly calculate the causal link of “paying gas → adding new users → retention and conversion”.The vast majority of wallets or DApps rely on subsidies to attract users in the early stages, but once the subsidies disappear, user migration costs are extremely low and it is difficult to form a network effect.More realistically, the Web3 ecosystem lacks the “advertising, retention, and traffic closed-loop” industrial chain of Web2, which makes Paymaster’s efforts often unrewarded and difficult to develop a sustainable business closed-loop.Therefore, the slow promotion of AA is not essentially a technical problem, but “a lack of commercial traction”.The market will not pay for ideas, only profits.The problem of ecological fragmentation further exacerbates 4337’s plight.The complete stack of AA includes EntryPoint, Bundler, Paymaster, Wallet Contract and Aggregator. Each wallet manufacturer and chain may have its own version of implementation.Due to the complex structure of AA, the user’s UserOperation is not directly processed by the chain, but needs to be simulated and aggregated by Bundler, which means that slight implementation differences between various ecosystems will cause “incompatibility”.Incompatibility between wallets, high DApp integration costs, and complex on-chain testing all force project parties to re-evaluate the investment-output ratio when facing AA.Although EOA is primitive, it is extremely simple; although AA is advanced, it caused the problem of “ecological fragmentation” in the early stages of promotion.For the vast majority of small and medium-sized DApps, supporting 4337 does not bring obvious benefits, but requires additional technical costs. The result is “if you can’t use it, don’t use it.”
The lack of cross-chain capabilities also weakens the system-level value of AA.ERC-4337 is essentially an upgrade of the EVM Layer’s account system. It relies on EntryPoint, UserOp mode and EVM’s verification logic, so it is naturally difficult to extend to non-EVM chains.If you want to unify the multi-chain experience, you must introduce more middle layers, multiple sets of EntryPoints, multiple verifications and cross-chain message transmission, doubling the cost and complexity.The Web3 world is inherently fragmented by multiple chains, and AA cannot form a unified account system between chains, making it unable to fulfill the vision of “Web3’s unified account standard”.Smart accounts owned by users on one chain cannot be mapped to another chain without friction, which greatly reduces the scale value of AA.However, despite the obvious structural difficulties, AA is still a promising direction for the future.The reason is that the evolutionary trends of next-generation blockchain infrastructure are naturally aligning with AA, rather than deviating from it.In particular, the large-scale rise of L2 (Rollup) has structurally resolved the cost pain points of AA.The data compression capabilities of mainstream ZK Rollup and Optimistic Rollup can reduce the gas cost of 4337 by 70%–90%, while batching UserOperation can further reduce the on-chain overhead of a single operation.Therefore, “Rollup + AA” is likely to become the mainstream combination in the next 35 years, and it will also prevent the Ethereum main network from bearing the cost pressure of high-frequency AA operations.At the same time, ERC-4337 is also constantly evolving. The most important change is the introduction of the BLS aggregate signature mechanism.By aggregating multiple user operations into one signature and executing them in batches, the amount of data that needs to be published on the chain is greatly reduced, which not only improves TPS but also significantly reduces gas consumption.More importantly, it improves on-chain transaction throughput, making AA no longer just a “wallet upgrade solution” but a “more efficient on-chain operation protocol.”Combined with Rollup’s compression capabilities, AA’s core bottleneck at the performance cost level is being unlocked, and the industry is beginning to see its commercial viability.In addition, EIP-7702 launched by Vitalik provides a “temporary conversion” path from EOA to smart accounts, allowing users to instantly enable AA capabilities in transactions without migrating assets or changing wallets.EIP-7702 significantly reduces ecological congestion, allowing wallet manufacturers to gradually upgrade without reconstructing the underlying architecture, allowing users to enter the AA world almost imperceptibly.This is an important turning point: AA no longer needs to “replace EOA”, but can coexist compatible with EOA and achieve ecological migration through progressive evolution.
However, the biggest challenge to the future of AA comes from a sudden competitor in 2024–2025 – the x402 protocol.Compared with AA, x402 is more like an “Internet-level unified payment protocol”. It uses HTTP 402 as the entry point to unified interface logic for Web2 and Web3 payments.What AA wants to solve is “in-chain account abstraction”; what x402 wants to solve is “Internet payment abstraction”.AA’s target group is Web3 users; x402’s potential group is the entire Internet.More importantly, x402 has a natural closed business loop: Provider and Facilitator can charge directly from the payment process, which has clear market traction.ERC-8004 becomes a “tool protocol” under the x402 framework, rather than an underlying infrastructure that requires migration across the entire network, so promotion is much less difficult than AA.AA needs to convince the ecosystem to migrate to its own defined system, while x402 chooses to adapt to the existing behavioral habits of the Internet, which gives it obvious advantages in business adoption.So the future for AA is clear, but the road is bumpy.There is a profound tension between the elegance of technology and the reality of the industry: the future defined by AA is indeed better, but multiple difficulties such as cost, business incentives, ecological fragmentation and competition agreements must be overcome before it can be realized.With the arrival of the Rollup era, the maturity of signature aggregation technology, and the opening of the compatibility path with EIP-7702, the cost and compatibility issues of AA will gradually be alleviated, while the business model and cross-chain capabilities still need further breakthroughs.The key in the next few years will not be whether AA is more advanced, but whether the industry finds a path to allow it to “naturally diffuse”.The future of AA belongs to those ecosystems that can connect its “protocol capabilities → product experience → business value” rather than being pure technology implementers.It may not be the easiest solution to promote, but it is still the one with the most potential to reshape the on-chain account system.
3. Investment value and future development of AA accounthope
The role of Account Abstraction (AA) in the blockchain industry is gradually declining from “revolutionary technical concept” to “structural infrastructure upgrade”, and its investment value has also evolved from early narrative dividends to a comprehensive judgment of the trinity of project implementation, ecological synergy and business sustainability.In the next five years, AA will not become the unified entrance for the entire Web3, nor will it replace EOA as the standard account system. However, it will firmly exist at the high-end level of the wallet and account system, become the core representative of “smart accounts”, and be deeply embedded in the on-chain interactive experience and transaction execution capabilities of the Rollup era.Therefore, for investors, the value of AA is not a short-term user explosion, but a “classic Internet-style long-term infrastructure investment opportunity.”
From a structural trend perspective, AA’s status will increase significantly with the popularity of EIP-7702.7702 allows EOA to temporarily become a smart account in a single transaction, which means that the existing wallet system does not have to be forced to migrate or reconstruct the asset structure.Users can enjoy AA’s capabilities such as permission control, social recovery, multi-signature logic, and automated strategies without changing wallets, copying mnemonic phrases, or migrating assets.This “painless upgrade” model changes AA’s adoption curve from steep to smooth, giving wallet manufacturers greater incentive to incorporate it into the underlying architecture.Therefore, in the next three to five years, we are more likely to see the coexistence and integration of EOA and AA rather than replacement.
The real home ground of AA will be the Rollup system.As L2s such as zkSync, Scroll, StarkNet and Base become mainstream execution environments, the cost pain points of AA will be naturally absorbed by Rollup data compression capabilities, and its gas costs can be reduced by 70%–90% compared to L1.At the same time, BLS signature aggregation and batched UserOperation will further reduce the size of on-chain data, turning account operations in AA mode from “expensive but advanced” to “advanced and affordable”.This means that the value of investment is not in L1 AA, but in deeply embracing Rollup’s AA wallet, Paymaster and Bundler infrastructure.This direction corresponds to visible engineering value – it is not a concept, but a real adoption driver from actual cost reductions in the chain.From the perspective of the industry chain, the investment value of AA is mainly concentrated in four types of infrastructure areas: smart contract wallets, Paymaster service providers, Bundler infrastructure, and L2 that directly supports AA.Smart wallets represent the front-end entrance to future user experience, among which projects such as Safe, Argent, OKX Web3 Wallet, imToken (AA version) and Zerodev are the most certain “ecological targets.”They realize the transition from “key wallet” to “smart account wallet” through modular wallet architecture, social recovery, multi-signature and automation strategies, and have strong compound interest user retention capabilities.Paymaster is one of the links with the most potential commercial value in the AA system. It is the bridge between fuel subsidies and user growth.Although Paymaster’s business model is not yet fully mature, it is expected to become an “on-chain growth engine” when the Rollup environment and on-chain business scenarios become more abundant: the project side pays gas for high-value users, implements subsidy strategies, and implements whitelist strategies, thereby forming a marketing effect similar to Web2’s “advertising exposure”.Projects such as Stackup and Pimlico are therefore worthy of attention.As the execution layer of AA, Bundler is also the infrastructure of implicit value, which is equivalent to the “transaction packaging logistics layer” in the blockchain world.Biconomy, Alchemy’s AA Infra, etc. will benefit as the ERC-4337 ecosystem grows.Bundler does not have the opportunity to directly face users, but it has a scalable and deterministic revenue model, and may become a “low-volatility, large-scale” infrastructure investment direction on the chain in the future.
At the same time, AA must face the competition and complementarity brought about by the x402 protocol in the next five years.x402 does not replace AA, but becomes the unified payment entrance of the Internet in the HTTP 402 mode. It covers Web2 and Web3, has natural cross-chain capabilities, and has a clear business closed loop (Provider + Facilitator charging model).ERC-8004 becomes a plug-in in the x402 framework rather than an underlying protocol, so it has stronger promotion power.From an investment perspective, the value of AA lies in the intelligence of accounts within the chain, while the value of x402 lies in opening up the payment experience of the entire Internet. The two will coexist and complement each other in the future, rather than being a unilateral winner.
Based on comprehensive judgment, AA will form the “middle infrastructure” of the Ethereum and Rollup ecosystems in the next five years: the bottom layer is still EOA (weakened but exists), the middle layer is Smart Account (AA), and the top layer is x402’s unified interoperability network.AA users will not grow explosively, but its value will grow steadily with the increase in on-chain transaction volume, demand for strategy automation, professionalization of asset custody, and demand for loss prevention.In a world of long-term migration to the chain, AA is a highly certain structural investment direction; in a world of declining rollup costs, it is the “cashable future”; in an Internet that coexists with x402, it is the backbone of the on-chain account system.
Four.knotOn
The core value of AA is to complete the modern paradigm shift from the original model of “private key = account” to “account = program” for the Ethereum account system. It completes a key link in the migration from Web2 to Web3, making a secure, recoverable, and programmable wallet system possible.Although AA still faces structural bottlenecks such as high costs, weak business closed loops, and restricted cross-chains, it has become the infrastructure direction for on-chain experience upgrades.In the future, AA will exist as a high-end account layer for a long time, rather than the only standard; x402 will complement cross-chain and payment interconnection.The two jointly promote Web3 from the geek era to the mass era, laying a key foundation for the “unified Internet account”.
