Smart accounts, passkeys and gasless transactions

Two kinds of account

An ordinary Ethereum address is an externally owned account, or EOA. One private key controls it and the protocol fixes its rules: that key signs every transaction, the account pays its own gas in the chain’s native token, and each transaction makes one call. It is simple, and if the key is lost, so is the account.

A smart account is a contract that holds your assets and decides for itself what counts as a valid instruction. The contract can accept a passkey instead of a seed phrase, require two signers above a limit, let an app pay the gas, or bundle five actions into one. That flexibility is what people mean by account abstraction.

ERC-4337: smart accounts without changing Ethereum

ERC-4337 went live on Ethereum mainnet on March 1, 2023, as a set of contracts rather than a protocol upgrade. It adds a parallel lane for smart account activity with four moving parts.

1. You sign a UserOperation

   Instead of a transaction, your wallet signs a UserOperation: a description of what your smart account should do, with its own gas limits and signature. It goes to a separate mempool, not the usual one.

2. A bundler packages it

   A bundler collects UserOperations from many users and submits them together in one ordinary transaction. It pays the gas up front and is reimbursed.

3. The EntryPoint checks, then executes

   A single shared contract, the EntryPoint, first asks each account to validate its operation (check the signature, confirm the fee can be paid) and only then runs the actions.

4. A paymaster may pay

   If an app sponsors your gas, or lets you pay in a token such as USDC, a paymaster contract covers the fee and settles with you or the app.

One useful property: a 4337 account’s address can be known before the contract exists, because it is derived from the factory and settings that will deploy it. You can receive funds there first, and the contract is deployed along with your first action.

The tradeoff is that a 4337 account is a new address. Moving to one means moving your assets to it, and your old address, with its history and its seed phrase, stays behind.

EIP-7702: an ordinary address that borrows code

The Pectra upgrade on May 7, 2025 added a second route. EIP-7702 lets an existing EOA point to a smart contract and run that contract’s code as its own. Your address, balances, history and seed phrase all stay the same. The account simply gains smart account abilities such as batching and sponsored gas.

Mechanically, you sign an authorization naming a chain ID, the contract to delegate to and your account’s nonce. It travels in a new transaction type (type 4), and from then on your address carries a short marker, the bytes 0xef0100 followed by the contract address, that tells the chain where to find its code.

• It persists. The delegation stays in place across transactions until you change it.
• It is reversible. A new authorization that delegates to the zero address clears it and returns the account to a plain EOA.
• Your key still rules. The original private key can still sign ordinary transactions and change the delegation. Your seed phrase is exactly as important as before.

In practice you do this through your wallet’s settings, not by hand. MetaMask, for example, calls the result a smart account: you switch it on per network, the account delegates to MetaMask’s own delegator contract, and switching back costs a small network fee. Block explorers show it too. On Etherscan, an address page lists its delegated address, or shows none for a plain account.

The phishing risk that comes with delegation

A delegation hands the contract’s code full control of your account. Whoever wrote that code can move every token and NFT at the address, in any later transaction, until the delegation is removed. The EIP-7702 specification is blunt about it: delegated code "has unrestricted access to the account", applications must not expect to ask users to sign authorizations, and it is the wallet’s duty not to offer an interface for doing so.

Two details make it sharper. An authorization with a chain ID of 0 is valid on every chain, so one signature can hand over the same address everywhere. And the transaction that carries an authorization can be sent and paid for by someone else, so the attacker only needs the signature.

Attackers moved quickly. In research published at the end of May 2025, Wintermute found that over 97% of all EIP-7702 delegations pointed to contracts sharing exactly the same code: automated sweepers attached to wallets whose keys had already been stolen, so that any ETH sent in would be drained at once. Those victims lost their keys in the ordinary ways. The lesson for everyone else is that a delegation is as powerful as a key.

Passkeys and the P-256 precompile

A passkey is the login method your phone and laptop already use for websites: a key pair created inside the device’s secure hardware and unlocked with your face, fingerprint or PIN. There is no seed phrase to write down and nothing to type.

The catch was the curve. Ethereum keys use secp256k1. Passkeys use a different curve, secp256r1, also called P-256. A contract could verify a P-256 signature in ordinary code, but it typically cost a few hundred thousand gas each time. Two precompiles, verification functions built into the chain itself, fixed that:

Both precompiles live at the same address with the same interface, so the same wallet code works on both. The mainnet version costs more because it was benchmarked again and fixes two edge cases in the rollup version. Either way, verification became tens of times cheaper, which is what made passkey wallets practical.

Base Account, formerly Coinbase Smart Wallet, is a widely used example. Its passkeys are stored and synced by iCloud Keychain, Google Password Manager or a password manager such as 1Password, with a recovery phrase available as a backup. That model moves your security somewhere new. Your Apple or Google account, and every device signed into it, becomes part of your wallet’s security, so protect that account with the care you would give a seed phrase.

What a smart account can do for you

Session keys and spending limits are the features that change daily use most. They let a game or a trading app act for you without a prompt per click, while capping what a compromised app could do. Read their limits as carefully as an approval: amount, contracts, and expiry.

On Solana the picture is different. The fee payer is simply the first signer of a transaction and need not be the account that owns the tokens, so an app can sponsor your fees natively by signing as the payer, and multisig smart accounts such as Squads provide the policy features. The ideas carry over even though the plumbing does not.

What still breaks

Addresses across chains

An ordinary address exists on every EVM chain at once, because it comes from your key. A contract account exists only where it has been deployed. Send funds to your smart account’s address on a chain where the contract was never deployed, and nobody controls them until someone deploys there.

That happened on June 9, 2022. The Optimism Foundation sent 20 million OP tokens to an address the market maker Wintermute had provided: its Safe multisig address from Ethereum mainnet. The Safe had never been deployed on Optimism. An attacker replayed old deployment transactions that carried no chain ID, recreated a wallet at that exact address on Optimism under their own control, and took the tokens.

Modern smart wallets deploy deterministically, so the same setup lands at the same address on each chain, and a 7702 account keeps your EOA address everywhere. Still, before receiving on a new chain, confirm the account is deployed there, or will deploy under your control, and send a test first. Settings are per chain too: adding or removing a signer on one chain changes nothing on the others unless the wallet syncs it, which some, such as Coinbase’s smart wallet contract, are built to do. The guide to living on more than one chain covers the wider picture.

Recovery that was never set up

Social recovery protects you only if the guardians exist, still have their keys, and know what to do. A recovery method configured once and never tested is a hope, not a plan. Passkey wallets have their own version: if your only passkey was on a phone that is now lost, and it was never synced or backed up, you are relying on whatever backup the wallet offers.

New code, new bugs

A smart account is software, and a bug in the account contract, the delegate contract or an added module is a bug in your wallet. Prefer account code that is widely used and audited, and be wary of installing extra modules from unknown sources. Some older apps and contracts also assume every user is an EOA and cannot verify a signature from a contract account.

Infrastructure you rely on

4337 accounts depend on bundlers, and gasless flows depend on a paymaster being willing to pay. If a sponsor stops, you pay your own gas, so keep a little of the native token on each chain you use.

Using one sensibly

• Know which kind you have. A 4337 contract wallet, a 7702 upgraded EOA or a plain EOA. It changes what your seed phrase does and what happens on a new chain.
• Keep the seed phrase for a 7702 account. Upgrading does not retire it. It still controls everything.
• Set up and test recovery before real money goes in.
• Delegate only through your wallet’s settings, and read every batch before approving it, because one signature now does several things. Reading what you sign applies with extra force.
• Test on each new chain with a small amount before receiving anything large.
• Fit it into your structure. A smart account can serve as a warm wallet or, as a multisig, a vault. See structuring your wallets.

For the machinery underneath, including the EntryPoint, the validation rules and the fine print of 7702 authorizations, continue to account abstraction internals. The beginner guide to wallets covers the basics this builds on.

Common questions

Where to go next