Crypto assets and security, illustrating smart wallet authorization and tokenized assets

Sponsored gas can remove onboarding friction for legitimate AI-agent wallet actions, but a sponsor inherits costs and abuse exposure. An ERC-4337 paymaster policy needs a financial ledger for accepted operations, failed validation and repeat attempts rather than a promise of free transactions.

Define who pays for which user operation

The ERC-4337 proposal, created September 29, 2021, describes UserOperations, bundlers, EntryPoint contracts and optional paymaster involvement. A paymaster may support an operation’s gas under specified validation and settlement conditions, but that does not mean every failed or abusive request is harmless to the sponsor. Define sponsor rules by account, action category, network, contract and maximum spend. Avoid a policy that accepts arbitrary targets simply because an AI agent describes an operation as routine. Distinguish marketing-funded onboarding subsidies from production actions that should be charged to a customer or explicitly confirmed. Use simulated transactions to assess potential costs but do not represent estimates as final spending. The unit of reporting should be accepted, executed and billed operations with exact receipt references, not raw text prompts or app launches.

Model financial exposure with transparent assumptions

Construct a fictional monthly model to test economics: 10,000 eligible user operations, average observed sponsorship expense of $0.12 each, a 7 percent duplicate-attempt rate and 2 percent operational overhead. The baseline subsidized cost before overhead is $1,200 if exactly 10,000 distinct operations execute. If retries are not deduplicated and create 700 additional sponsored operations, the expense can rise by $84. These amounts are illustrative assumptions, not gas-market facts; actual cost depends on network fees and contract execution. Publish total units, average cost, tail cost and the distribution by action. Reserve budget for infrastructure, monitoring, support and operational mistakes separately. A sponsor cannot optimize intelligently using only ‘cost per user’ when a single abusive session may submit many operations. Define daily and lifetime ceilings and alerts before deploying public access.

Validate paymaster policies and expiration windows

Paymaster validation must be applied to a specified operation and context. Test that changing a destination contract, calldata, sender, chain, validity window or sponsor signature invalidates approval as intended. Include cases where the paymaster has insufficient deposit, service outages or incompatible account implementations. An operation that was authorized yesterday should not automatically remain sponsored after a policy change. Tie policy to clear version numbers and a maximum effective period. A user should be told whether gas is actually covered or only potentially covered. Do not conceal the possibility of needing an ordinary wallet-funded transaction. A policy engine should be deterministic and externally testable with the same inputs, while sensitive abuse thresholds can remain confidential. The language model may explain the policy, but only the trusted validation system should decide whether a specific operation qualifies.

Prevent repeated requests and prompt-driven abuse

An AI agent that reads third-party instructions may be tricked into submitting needless transfers or repeatedly checking eligibility. Treat external content as non-authoritative for paymaster policy. Use per-intent idempotency keys, bounded retry counts and exponential backoff that cannot grow into a sponsor-funded loop. A transient RPC timeout should not immediately produce another UserOperation without confirming the first one’s status. Log refusal categories, but avoid collecting user private messages to justify a spending alert. The EIP-1193 provider interface includes connection, account and chain change events; test them explicitly because cached sponsor eligibility can become invalid after wallet context changes. A high-quality test intentionally drops a response just after submission, then verifies that the app displays uncertain status and reconciles the original operation rather than paying twice.

Reconcile execution receipts with the sponsor ledger

The finance ledger should tie every eligible user operation to a distinct policy decision, submitted hash, inclusion result, actual gas expense and accounting treatment. A rejected validation attempt is not the same thing as a completed sponsored operation. Segment by successfully executed action, reverted action, expired operation, duplicate attempt and denied preflight. Examine fee spikes separately from application-level failures. Define what customer support can show to a user and what requires privileged internal review. Never publicly attribute a failed operation to a user without evidence. Match paymaster deposit movements to operating dashboards so the sponsor can reconcile balances. Build controls that detect missing receipts and inconsistent totals before closing a reporting period. A marketing dashboard that counts every submitted request as a converted customer is neither financially accurate nor operationally useful.

Set launch thresholds and a safe shutdown path

Before opening sponsorship to untrusted traffic, test daily budget exhaustion, malicious call patterns, account creation storms, RPC service degradation and rapid network fee changes. A safe shutdown should disable new sponsorship without blocking a user’s ability to access their wallet, view balances or use an alternative authorized payment method. Test the exact message shown when sponsorship is temporarily unavailable. Do not imply that disabling paymaster service cancels transactions already submitted. Require approval from security and finance owners for budget changes, and document who can revoke policy credentials. Report sponsor cost per successful human-approved operation rather than cost per automated agent plan. The useful business question is whether the additional activation and retention value justifies risk-adjusted subsidy cost, using an honestly measured comparison rather than invented conversion uplift. ERC-4337 can support better onboarding only when accountability scales with automation.

Sources

Original analysis and test scenarios; illustrative prices and volumes are not observed market statistics. Technical information is not financial advice.