What is a Smart Account?

A Smart account is a smart contract wallet that follows the ERC-4337 specification.

Ethereum has 2 types of accounts to transfer and receive tokens: EOAs (Externally Owned Accounts) and Contract Accounts. A smart account is a wallet managed by a contract account instead of an EOA. A smart account is a wallet type requiring no private keys or seed phrases. Smart accounts rely on code instead of private keys to secure and recover wallet information.

A smart account is a type of Web3 wallet powered by smart contracts.

This smart account is unlocked by a 'key' - a personal account. This key can be anything from a MetaMask wallet or even a Embedded Wallet and is used as a way to 'sign in' to the wallet.

Benefits of Smart Accounts

  • Optimized transaction efficiency & batch transactions
    • Combine multiple transactions into a single atomic transaction
  • Improved Security Features
  • Social & Multi-Sig Recovery
    • Recover a wallet without seed phrases/passwords
    • Nominate a trusted person to recover your wallet in the case of an emergency
  • Programmability
    • Smart accounts can be programmed to do anything a smart contract can do
    • Smart accounts can be upgraded to add new features

Account Factories

In order to issue smart accounts for users, an account factory contract must be deployed. This factory contract is responsible for deploying individual user contracts when required, and comes in two different flavours.

Types of Account and Account Factory

Factory TypeUpgradeabilityExpected Usage
SimpleNon-upgradeableDeveloper wants to issue simple smart accounts to their users. They do not anticipate that users wallets will need any feature upgrades.
ManagedAccount upgrades controlled centrally by the app developer.Developer wants to issue smart accounts to their users. They do anticipate feature upgrades to user wallets, and want to push upgrades to user wallets for seamless/invisible UX for upgrades.

Account Type Feature Comparison

ContractsAccountFactory AccountManagedAccountFactory ManagedAccount
ERC-4337 Compatible
Can hold native ERC-20, ERC-721 and ERC-1155 Tokens
Execute transactions in Batches
Is the Account Upgradeable
Who controls upgrades (?)n/aAdmin of the account factory.

To learn more about each factory and their respective account implementations, read our smart contract deep dive.


Personal Wallet/Key

This is the default admin on an account or the "key" to an account. It can be any wallet and is used to initialize the account. Any one wallet can only be the "key" to one account per factory contract.

This wallet is the primary way to access and interact with the account.


The account is the ERC-4337 compatible smart contract which holds all of the assets.


This is the data structure for the "pseudo-transaction" that the user wants to perform. The transaction is pseudo as Smart Accounts cannot initiate transactions on EVM chains as they are not supported natively. It contains the following fields:

  • sender: The account making the operation.
  • nonce: Anti-replay parameter; also used as the salt for first-time account creation.
  • initCode: The initialization code needed to create the account (needed if and only if the account is not yet onchain).
  • callData: The data to pass to the sender during the operation.
  • callGasLimit: The amount of gas to allocate for the operation.
  • verificationGasLimit: The amount of gas to allocate for the verification step.
  • preVerificationGas: The amount of gas to pay for to compensate the bundler for pre-verification execution and calldata.
  • maxFeePerGas: Maximum fee per gas (similar to EIP-1559 max_fee_per_gas).
  • maxPriorityFeePerGas: Maximum priority fee per gas (similar to EIP-1559).
  • paymasterAndData: Address of paymaster sponsoring the transaction, followed by extra data to send to the paymaster (empty for self-sponsored transaction).
  • signature: Data passed into the account along with the nonce during the verification step. Should depend on the chainid and EntryPoint address to prevent replay attacks.


The EntryPoint is a singleton contract (a contract that has a predictable address that is the same on every chain). It has two methods that are used as entry points to execute bundles of UserOperations: handleOps and handleAggregatedOps.

Bundler (relayer)

A bundler is a node that monitors the alternative mempool of UserOperations and bundles multiple UserOps together to forward to the EntryPoint contract as a single transaction. These UserOps can be sent from different accounts and are bundled and sent to the EntryPoint contract via a handleOps call.

The bundler is controlled by its own EOA which initially pays for the gas fees upfront and is then repaid by either the sender or a paymaster if the transaction is sponsored.

The entry point contract then uses the validateOp and executeOp functions on the smart account contract to verify and execute the UserOps on behalf of the users.

It allows you to send transactions with smart accounts.


A paymaster is a smart contract that relays transactions. It provides a service that enables a third party to pay the transaction fee on behalf of the user by funding the paymaster contract in advance. The paymaster acts as a gas reserve which then can be used during the call execution via the EntryPoint contract. The thirdweb Account abstraction paymaster is initially paid for by thirdweb. By using an API key, the usage is tracked and billed. You can easily define sponsorship rules that determine whether a transaction will be sponsored.