BundleBear

2023 Year in Review

This year, ERC-4337 massively accelerated the pace of innovation in the account abstraction field. The BundleBear 2023 Year in Review aims to provide a data-driven perspective on the major patterns and trends within the ERC-4337 smart accounts category. All insights are based on ERC-4337 activity on Polygon, Optimism, Arbitrum, Base and Ethereum.

User Insights

7.9M+ User Operations were made in 2023

When you use an ERC-4337 account, you submit User Operations (UserOps) instead of transactions. These UserOps get grouped into bundle transactions that are executed onchain by Bundlers.

The number of monthly UserOps reached a peak of 2.7M in October, then steadily declined to 880k in December.

Monthly UserOps

01-Mar-202301-Apr-202301-May-202301-Jun-202301-Jul-202301-Aug-202301-Sep-202301-Oct-202301-Nov-202301-Dec-20230700,0001,400,0002,100,0002,800,000

1.7M accounts made a UserOp in 2023

The highest number of monthly active smart accounts occurred in November, when 450k accounts made at least one UserOp.

Monthly Active Accounts

01-Mar-202301-Apr-202301-May-202301-Jun-202301-Jul-202301-Aug-202301-Sep-202301-Oct-202301-Nov-202301-Dec-20230150,000300,000450,000600,000

Top 10 most used protocols

Here are the protocols that ERC-4337 accounts used the most this year:

Project
CyberConnect
534968
986149
xFANTV token
446375
991284
G1 token
246107
3377415
ZTX Hoodie NFT
211519
216467
CYBER token
126448
138777
Minishard NFT
64650
79770
CapX
45847
584220
CyberID NFT
25462
26798
USDC
9738
27030
CapX ID NFT
9454
9522

Top Usage Trends

In the first few months of ERC-4337 activity, apps like CapX (a quest protocol), Dexwin (an onchain casino) and Fantazy (a fantasy sports app) attracted a small number of early adopters, but there wasn't a breakout hit.

This changed in July when CyberConnect, an onchain social network, started creating ERC-4337 smart accounts for all of its users. This led to a massive increase in the usage of smart accounts. The peak of this growth occurred in August during their CYBER token airdrop. Following the airdrop, smart account usage declined as many farmers shifted their focus from Cyberconnect to new targets.

In the following months, token farming activity on Grindery (a crypto telegram bot) and FanTV (a streaming service that rewards users with tokens) took over as the most popular user behaviours, replacing airdrop farming on CyberConnect.

Projects Share of Monthly UserOps

01-Mar-2301-Apr-2301-May-2301-Jun-2301-Jul-2301-Aug-2301-Sep-2301-Oct-2301-Nov-2301-Dec-230%25%50%75%100%

85% of all UserOps were made on Polygon this year

Polygon had the highest number of active ERC-4337 accounts this year for two reasons:

  • The three most popular apps for 4337 users, CyberConnect, Grindery, and FanTV, were all deployed on Polygon.
  • It is much cheaper to deploy and use 4337 accounts on Polygon compared to other chains and L2s. For more insights on smart account costs, check out our cost analysis research report
  • The only break in Polygon's market dominance was in August, when CyberConnect dropped the CYBER token on Optimism and 200,000 ZTX NFTs were minted using smart accounts on Arbitrum.

    Chains Share of Monthly UserOps

    01-JAN-202301-FEB-202301-MAR-202301-APR-202301-MAY-202301-JUN-202301-JUL-202301-AUG-202301-SEP-202301-OCT-202301-NOV-202301-DEC-20230.00%25.00%50.00%75.00%100.00%
    • ethereum
    • polygon
    • optimism
    • arbitrum
    • base
    • avalanche

    Bundler Performance

    5.4M bundle transactions were made in 2023

    The role of a Bundler is to package UserOps into bundle transactions. The number of monthly bundle transactions consistently increased month-over-month throughout the year.

    Monthly Bundle Transactions

    01-Mar-202301-Apr-202301-May-202301-Jun-202301-Jul-202301-Aug-202301-Sep-202301-Oct-202301-Nov-202301-Dec-20230350,000700,0001,050,0001,400,000

    Top 5 Bundlers

    Here are the Bundlers who had the most activity in 2023

    Bundler
    pimlico
    4514902
    2788440
    $42,269.21
    biconomy
    1717173
    1729676
    $1,621.09
    alchemy
    807769
    478636
    $57,333.15
    stackup
    318952
    294002
    $16,574.37
    particle
    8255
    8564
    -$74.70

    86% of the bundles made in 2023 only contained 1 UserOp

    When bundles contain multiple UserOps, smart account users save money because the cost of the bundle transaction is shared between all the UserOps. Bundlers also benefit because they spend less by making fewer transactions while charging the same gas premium on every UserOp.

    Unfortunately, the number of bundles that contain only one UserOp still greatly exceeds the number of multi-UserOp bundles. This is due to a combination of factors:

  • There hasn't always been enough UserOp volume to fill bundles with multiple UserOps.
  • Bundler teams needed time to find multi-UserOp bundling algorithms that they were satisfied with.
  • Monthly % of Multi-UserOp Bundles

    2023-03-012023-04-012023-05-012023-06-012023-07-012023-08-012023-09-012023-10-012023-11-012023-12-010%25%50%75%100%

    9.7% of all bundle transactions were unprofitable

    Accurately pricing UserOps has been a challenge for ERC-4337 apps and bundlers. The line chart below tracks the monthly percentage of unprofitable bundle transactions. Here, ‘unprofitable’ refers to cases where the UserOps in the bundle collectively paid less in fees than the bundler spent on the transaction.

    At the start of the year, top Bundlers frequently created bundles that did not generate enough revenue from their UserOps to cover gas costs. However, as the year progressed, the percentage of unprofitable bundles decreased, and by December, all Bundlers fell within the less than 30% unprofitable range.

    Monthly % of Unprofitable Bundles

    01-MAR-202301-APR-202301-MAY-202301-JUN-202301-JUL-202301-AUG-202301-SEP-202301-OCT-202301-NOV-202301-DEC-20230%25%50%75%100%
    • pimlico
    • alchemy
    • etherspot
    • stackup
    • unipass
    • candide
    • biconomy
    • particle

    Paymaster Activity

    Users and Apps have spent more than $1,000,000 on UserOp fees through Paymasters

    Paymaster contracts allow applications to set up custom gas fee policies for their users.

    Apps can let users pay for gas using ERC-20 tokens or they can cover the gas fees on behalf of their users. Paymasters have processed nearly a million dollars in total spending, with monthly volume consistently increasing over the past four months.

    Monthly Paymaster Volume

    01-Mar-202301-Apr-202301-May-202301-Jun-202301-Jul-202301-Aug-202301-Sep-202301-Oct-202301-Nov-202301-Dec-2023$0$90,000$180,000$270,000$360,000

    Top 5 Paymasters

    Here are the Paymasters who had the most volume this year:

    Paymaster
    pimlico
    $294,075.32
    stackup
    $290,258.17
    alchemy
    $262,198.06
    biconomy
    $53,397.79
    blocto
    $1,018.17

    96.4% of all UserOps were paid for using a Paymaster

    Most of the UserOps made in 2023 were paid for using a paymaster. This means that either the user paid their fees using an ERC20 token or the app/wallet they were using subsidized the fees.

    Factories and Wallets

    84% of ERC-4337 accounts were deployed using the Zerodev and Biconomy factory contracts

    Most accounts are created using a factory contract. A factory is a smart contract that generates other smart contracts. 55% of all accounts were deployed using the Kernel factory created by Zerodev, and 29% were deployed using the Biconomy Account factory created by Biconomy.

    Factory Share of Monthly Accounts Deployed

    01-MAR-202301-APR-202301-MAY-202301-JUN-202301-JUL-202301-AUG-202301-SEP-202301-OCT-202301-NOV-202301-DEC-20230%25%50%75%100%
    • zerodev_kernel
    • blocto
    • candide
    • fun.xyz
    • Unknown
    • safe
    • biconomy
    • banana
    • simpleaccount
    • alchemy_lightaccount
    • etherspot

    Patch and CyberConnect Wallet were the most popular ERC-4337 wallets of 2023

    Wallets Share of Monthly UserOps

    In December, 18% of active accounts used Patch wallet. Patch is used by the Grindery telegram bot, and Grindery has been the primary driver of its growth. Additionally, in December, 25% of active accounts used CyberConnect's built-in wallet.

    01-MAR-2301-APR-2301-MAY-2301-JUN-2301-JUL-2301-AUG-2301-SEP-2301-OCT-2301-NOV-2301-DEC-230%25%50%75%100%
    • cyberconnect
    • patch
    • other