Blockchain technology is advancing rapidly, and embedded wallets—often implemented using smart wallets or smart contract wallets— represent the most viable path to mainstream blockchain adoption. Traditional wallets have too many friction points—seed phrases, gas fees, complex transaction flows—which embedded wallets, and particularly smart wallets, elegantly solve.

Two leading Ethereum standards, ERC-4337 and the upcoming ERC-7702, provide distinct paths forward for developers building these next-generation embedded wallets.

This article explains the differences between these standards, especially regarding their critical security models.

Introducing the Standards: ERC-4337 vs ERC-7702

ERC-4337 introduces a new wallet model based on smart contracts rather than externally owned accounts (EOAs). These wallets are fully programmable and support advanced features like gas sponsorship, transaction batching, and social recovery by default. They're controlled by logic encoded in a smart contract, rather than a single private key.

ERC-7702, on the other hand, enhances existing EOAs by temporarily delegating execution to smart contracts. This allows standard EOAs to gain smart wallet-like capabilities—such as batching or gas sponsorship—without changing the underlying account. It's a lighter-weight upgrade path that adds functionality incrementally without requiring the user to deploy a new contract wallet.

Key Management: ERC-4337 vs ERC-7702

ERC-4337 wallets don't rely on a single private key. Instead, they are managed by smart contract logic, allowing multiple signers—including non-private key signers such as biometric keys or passkeys. This means a compromised private key won't necessarily lead to catastrophic loss since other signers can safeguard assets.

ERC-7702, however, remains fundamentally tied to a private key (an enhanced EOA). Despite its ability to delegate actions to multiple signers, the underlying private key remains a critical point of vulnerability. Leakage or compromise of this key results in catastrophic asset loss.

Comparing ERC-4337 and ERC-7702

Feature	ERC-4337	ERC-7702
Features (multi-sig, passkeys, batching, gas sponsorship)	✅ Supported	✅ Supported
Multi-chain support	🟡 Okay (address generation via CREATE2, issues with some chains like ZKSync)	✅ Good (native EOA address consistency, nonce synchronization challenges remain)
Private Key Dependency	✅ No single point of failure; smart contract can use passkeys, social recovery, etc.	⚠️ Yes — underlying private key controls everything; compromise is catastrophic
Gas Cost and Performance	✅ Initial deployment cost, optimized via batching	✅ No upfront deployment cost, some operations faster
Maturity	✅ Battle-tested (2+ years), extensive tooling available	🚧 Experimental, not yet rolled out

Which Standard is Best for Your Application?

Choose ERC-4337 if your app is:

• A fintech handling users' funds where a private key loss would be catastrophic.
• Requiring advanced multi-sig, recovery features, or extensive programmable logic.
• Seeking a mature, extensively tested infrastructure.

Choose ERC-7702 if your app is:

• Experimental, ready to work at the cutting edge of technology.
• A Web3-native app requiring incremental adoption.
• Targeting applications needing consistent EOA addresses across numerous chains, including complex environments like ZKSync.

Conclusion: ERC-4337 for Maximum Security, ERC-7702 for Incremental Web3 Adoption

ERC-4337 remains the gold standard for fintechs or any app managing significant user assets, emphasizing maximum security and feature-rich programmability. ERC-7702 provides a pragmatic, incremental path for Web3 applications upgrading existing EOAs or requiring flexible multi-chain operations. Selecting the right standard depends heavily on your app’s unique security requirements and cross-chain strategies.