Crunching the data on account abstraction's 2023 growth

Authored by Kiwi Yao, researcher @OKX Ventures

The simplicity account abstraction (AA) brings to Web3 onboarding has seen the number of registered accounts soar during 2023. That could signal a bright future for Web3's mainstream adoption, as fresh use cases bring others into the latest iteration of the web. But what does the growth of account abstraction look like exactly, and what's caused it's recent emergence?

By September 2023, Ethereum, Arbitrum, Optimism, and Polygon had deployed more than 520,000 ERC-4337 accounts. Over 80% of these accounts were created in July 2023. Polygon and Optimism achieved significant growth in July and August 2023 on the back of AA product launches. A wave of traffic came to Polygon from the launch of the CyberConnect network, while Optimism saw growth from the launch of Beam wallet and ZeroDev.

Arbitrum and Ethereum have seen relatively smaller growth, with only a few hundred to a few thousand user ops. Bundlers and Paymasters are currently working on fewer protocols, with each chain currently monopolized by projects like Pimlico, StackUp, and others.

A closer look

The ERC-4337 EntryPoint, a contract that acts like a gatekeeper for the Ethereum network, was officially deployed on January 1, 2023. As of August 30, 2023, the total number of users on the AA chain reached around 616,000 with a total user op of 1.3 million. Quarterly user op growth between Q1 and Q2 2023 was 11,837%, with more than a 27,000% jump in user growth.

At the time of writing, 4,337 accounts are currently deployed across Ethereum, Arbitrum, Optimism and Polygon, with more than 80% of these accounts created via Polygon and Optimism during July and August 2023. Polygon leads the pack with 43.9% of user ops. Among account wallet users, Polygon led with both a 43.9% user adoption rate and 47% of the total share. Meanwhile, StackUp sponsored over $140,000 in gas fees.

Paymasters and bundlers

Paymasters, a smart contract component that's responsible for paying gas fees on the network, also leapt in volume in 2023. There are 96 Paymasters available at the time of writing with a total gas cost of around $414,200. ‌Paymaster transaction volume grew by 5,182% between Q1 and Q2, and the rise in both total gas and transaction volume suggests that demand for these intermediary services is growing significantly.

Meanwhile, the total number of bundlers — a core piece of infrastructure enabling smart contract accounts in place of externally owned accounts — sat at around 1,300 by September 2023, totaling approximately $33,800 in revenue. The Ethereum August bundler is around 1,000, of which StackUp accounts for 94% (more than 940), creating a monopoly on this component.

An illustration of the recent growth of ERC-4337

Source: Alchemy

An illustration showing the gas fees covered by paymasters from January 2023 to August 2023

Source: Binance

Polygon in the spotlight

As of September 2023, there are 340,000 Polygon accounts and a total of 560,000 user ops, mainly due to the surge in usage in July 2023, with 440,000 user ops.

As mentioned above, the main reason is the launch of the CyberConnect social network, where all accounts are ERC-4337 wallets. Biconomy is the second largest contributor, providing deployment for nearly 30,000 accounts. And, bundlers and paymasters in July and August 2023 were mainly provided by Pimlico.

Pimlico is a cryptographic infrastructure aimed at increasing the adoption of account abstraction. Pimlico will focus on providing comprehensive infrastructure for bundlers and paymasters.

Optimism in the spotlight

At September 2023 there are 150,000 accounts and 400,000 user ops for Optimism. The usage rate of ERC-4337 in August 2023 increased significantly compared to July 2023, mainly due to the introduction of Beam Wallet, which allows users to pay transaction fees with the coins they use for transfers, instead of the native tokens of the blockchain. Also contributing to the usage rate spike is the emergence of ZeroDev, a software development kit (SDK) built on top of ERC-4337 used to create Web3 applications supported by account abstractions.

With Optimism, bundler and paymasters are mainly provided by Pimlico, Alchemy, and StackUp. And, StackUp's SDK can be used to establish custom Web3 transaction flows and wallets using ERC-4337 — further boosting the network's appeal.

Arbitrum in the spotlight

By September 2023, Arbitrum counted around 2,200 accounts and 18,000 user ops. Its growth in July and August 2023 mainly comes from Zerodev and Biconomy, with the rest being user tests. With Arbitrum, bundler and paymasters are mainly established by StackUp.

Ethereum in the spotlight

Looking at Ethereum, at September 2023, there are 339 accounts and 2,100 user ops. The majority of these accounts are contributed by Zerodev, with minimal user ops generated by projects such as Safe and Biconomy. The remaining user ops are generated by users minting and transferring stETH, cbETH, and rETH. Here, bundlers and paymasters are primarily established by StackUp.

The final word

Many believe that account abstraction has the power to guide more people to adopt Web3 technologies because of the ease and simplicity it brings to the Web3 onboarding process. The data from 2023 suggests that adoption is growing at an impressive rate thanks to the advancements made by major layer 2 solutions that are helping to boost adoption and scale Ethereum further.