EIP-7702 and How You Should Prepare for the Pectra Hardfork

Ethereum is on the brink of an important upgrade with EIP-7702, set to launch in the coming months as part of the Pectra hardfork. This upgrade marks a pivotal moment in Ethereum’s journey toward account abstraction, a breakthrough designed to make onchain experiences smoother, smarter, and more accessible. Specifically, EIP-7702 enables Externally Owned Accounts (EOAs) to use smart contract account features. 

As developers, you’re the architects of the next generation of onchain innovation, and we’re here to ensure you’re equipped to leverage EIP-7702 to its fullest potential. As the builders of infrastructure powering millions of onchain applications, we’re here to help guide you. 

This is the first post in our deep-dive series into EIP-7702, tailored specifically for application developers like you. Together, we’ll explore what makes this proposal so impactful, how it works under the hood, and the key technical considerations to help you decide how (and why) to integrate these cutting-edge features into your applications. Let’s build the future—one upgrade at a time.

The tl;dr:

• EIP-7702 enables EOAs to delegate control to smart contract accounts that can execute code directly from their addresses

• It is compatible with the prevailing AA standard, ERC-4437, so existing wallets can become smart contract wallets without creating a new address and transferring assets

• For users, it will enable web2-like features, including account recovery and passkey sign-in for easier authentication, and web3-benefits like gas-sponsored transaction fees and paying for gas in any token, not just ETH

Current State of Ethereum Accounts

In May 2024, Vitalik Buterin introduced EIP-7702, a proposal that can fundamentally change how Ethereum accounts work. What started as a 22-minute draft before an all core dev call is set for inclusion in the Pectra upgrade. EIP-7702 represents a crucial step toward full account abstraction while solving immediate usability challenges.

But in order to understand where Ethereum is headed, we need to understand its current architecture. 

Today, Ethereum users rely on two types of accounts: externally owned accounts (EOAs), controlled by private keys, and smart contract accounts (SCA), which execute code directly: 

Externally owned accounts:

• Can initiate transactions

• Cannot execute code directly from their address

• Limited to basic operations

Smart contract accounts:

• Can execute code

• Cannot initiate transactions

• More flexible and programmable

The goal of EIP-7702 is to merge these two by letting any account act like a smart contract. By enabling EOAs to execute code directly from their address, Ethereum developers can build Web2-caliber UX onchain, with features including:

• Session keys

• Social recovery for accounts

• Authentication mechanisms that don’t require a seed phrase

• And batching multiple actions into a single click 

Here’s what you should know about how EIP-7702 works. 

What to know about EIP-7702 & ERC-4337

EIP-7702 doesn’t replace Ethereum’s existing AA standard, ERC-4337. EIP-7702 was designed to be complementary ERC-4337 and make it easier for those account abstraction features to reach users. But ERC-4337 does have one limitation: 

• It required new wallet creation because it’s not backwards compatible with EOAs 

EIP-7702 removes this limitation without deeper changes to the EVM’s consensus logic:

• Uses existing wallets

• Requires no new accounts or migrations 

• Fits perfectly with ERC-4337’s infrastructure

• Existing EOAs simply delegate smart contract logic via a delegation designator 

Execution flow for EIP-7702

EIP-7702 relies on a clever delegation mechanism which relies on users to provide authorization for executing smart contract code. This authorization is permanent until explicitly revoked by the user, meaning users trust that the code they are authorizing isn’t malicious. 

The execution flow is as follows:

1. Setup: EOA decides to delegate control to a smart contract wallet 

2. Validation: System checks the delegation is properly signed

3. Execution: EOA receives smart contract capabilities

4. Cleanup: If EOA decides to revoke smart contract control, another 7702 transaction must be sent to set delegation back to 0. 

EOAs are enabled to act like a smart contract account by storing a delegation designator. This designator is a special code, 0xef0100 || address, where the address points to a smart contract that contains the desired feature or action. 

The delegation designator uses the banned opcode 0xef to distinguish it from regular data, ensuring that code execution operations load the code from the designated address. 

When a transaction is sent to the EOA, the EOA executes the code at the designated address, gaining the functionalities of a smart contract account. 

Adoption and security considerations for application developers

The road to adoption of EIP-7702 has one main dependency: wallet providers. Because wallets are upstream of applications, without wallet support, the features enabled by EIP-7702 cannot be leveraged by application developers and their users. 

EIP-7702 also presents a different security model compared to smart contract accounts.  Primarily, EIP-7702 accounts retain their original EOA private key, which can override smart account security rules.

How you integrate with the wallet functionality enabled by EIP-7702 should depend on a few factors: the development stage of your application, the type of users you target, and how much flexibility you need when deploying your application across multiple chains.   

For developers with existing users and embedded wallets

If you already have an embedded wallet, you're in luck. Account Kit will help you manage different user types through its smart accounts:

• Existing EOA users can upgrade to ERC-4337 accounts

• New users can start directly with pure ERC-4337 accounts

• The system will support both smart EOAs (EOA+7702) and pure ERC-4337 accounts simultaneously

For developers that haven’t yet deployed their application

For new apps starting fresh: While ERC-4337 and EIP-7702 both enable account abstraction, they serve different needs in modern blockchain applications. 

ERC-4337 offers pure smart contract accounts with maximum programmability, extensive transaction customization, and established tooling, making it ideal for single-chain applications and most multi-chain applications where account functionality is paramount. 

In contrast, EIP-7702 provides a hybrid approach that lets accounts function as both EOAs and smart contracts, enabling seamless cross-chain compatibility and consistent addresses across networks while requiring less initial gas cost since no immediate contract deployment is needed.

Choose ERC-4337 when:

• Deep account programmability is a core requirement

• You are building a multichain app but do not need the flexibility of using an EOA on some chains and an SCA on others

• Gas costs aren't a primary concern

• You need extensive transaction customization

• You want to leverage existing 4337 infrastructure

Choose EIP-7702 when:

• You’re building a multichain app and consistent addresses across networks is a key requirement

• Initial gas costs are a concern

• Backward compatibility with EOA infrastructure matters

• You want flexibility to start simple and upgrade over time

The key advantage of EIP-7702 is its flexibility: you're not forced to choose between EOA and smart account capabilities, making it particularly valuable for applications needing to interact with both traditional and modern blockchain infrastructure while planning for cross-chain expansion.

For apps working with external, third-party wallets

Many of the most widely-used wallets, like MetaMask, are planning to incorporate smart wallet functionality this year. Here are some topics for you to explore:

• Batching: the ability for a single authorization to perform multiple actions atomically, like on DEXs where users approve an ERC-20 and then spend that approval 

• The risks of delegation  

• Consider using Account Kit to simplify external smart wallet connections

Additional considerations 

For application developers that decide to upgrade existing EOAs using EIP-7702 and want to use all of the features enabled by 7702, you’ll need a relayer. While there are different relayer architectures, our recommendation is to use 4337 bundlers because:

• They provide standardized interfaces for relaying;

• Include built-in paymaster systems;

• Ensure forward compatibility, and

• Can support censorship resistance through a public mempool

If you need a 4337 bundler, Alchemy Bundler has you covered.

Looking ahead: the road to mainnet

While EIP-7702 promises to make Ethereum more web-like, developers should note that adoption following the initial mainnet launch is dependent on wallets first integrating the features—and so usability of EIP-7702 will likely be limited. If you want to stay up-to-date on what Ethereum developers are discussing, check the latest posts here.

Account Kit will help you integrate 7702

Account Kit is your complete toolkit to bring the world onchain with zero friction. Soon, it will provide you everything you need to leverage EIP-7702, and it already supports broader account abstraction features.

• Zero-friction onboarding: Implement familiar email and social logins with embedded wallets

• Gasless transactions: Sponsor gas fees for users and enable one-click transactions

• Smart account integration: Easy SDK integration and support for ERC-4337, ERC-6900, and EIP-7702

• Full-stack toolkit: Build everything with Account Kit, or bring your own provider anywhere in the stack.

We're here to help you learn, build, and ship!

1. Explore Account Kit: Try the demo, read the docs, and start building.

2. Learn more: Enhance your skills with Alchemy University.

3. Need support?: Reach out! Our team is available 24/7 to help you implement these features