Overview

Modular Wallets are flexible smart contract accounts (MSCAs) that extend functionality through installable modules. Built on ERC-4337 (account abstraction) and ERC-6900 (modular smart contract framework), they support passkey authentication, gasless transactions, batch operations, and custom logic modules (multisig, subscriptions, session keys). MSCAs are lazily deployed -- gas fees for account creation are deferred until the first outbound transaction.

Prerequisites / Setup

Installation

npm install @circle-fin/modular-wallets-core viem

For passkey recovery, also install:

npm install bip39

Environment Variables

Write or merge into the project's env file when scaffolding Modular Wallets:

# .env.local (Next.js) or .env (Vite)
# Paste your Client Key from Console → Keys → Client Keys (shown once; starts with TEST_API_KEY:)
NEXT_PUBLIC_CLIENT_KEY=
NEXT_PUBLIC_CLIENT_URL=https://modular-sdk.circle.com/v1/rpc/w3s/buidl
VITE_CLIENT_KEY=
VITE_CLIENT_URL=https://modular-sdk.circle.com/v1/rpc/w3s/buidl

Use the NEXT_PUBLIC_* pair for Next.js or the VITE_* pair for Vite — not both. Client URL is fixed — do not ask the user to copy it from Console. Chain paths (e.g. /arcTestnet) are appended in code via toModularTransport, not in the env var.

Before using the SDK, complete the Console Setup:

1. Console → Keys → Client Keys — create a Client Key
2. Configure the Passkey Domain (passkeys are domain-bound)

Quick Reference

Supported Chains

Chain	Mainnet	Testnet
Arc	No	Yes
Arbitrum	Yes	Yes
Avalanche	Yes	Yes
Base	Yes	Yes
Monad	Yes	Yes
Optimism	Yes	Yes
Polygon	Yes	Yes
Unichain	Yes	Yes

For the latest supported blockchains: https://developers.circle.com/wallets/account-types.md (MSCA chain restrictions are in Rules below.)

Transport URL Path Segments

The toModularTransport URL requires the chain path segment appended to the client URL:

Chain	Mainnet Path	Testnet Path
Arbitrum	/arbitrum	/arbitrumSepolia
Arc	--	/arcTestnet
Avalanche	/avalanche	/avalancheFuji
Base	/base	/baseSepolia
Monad	/monad	/monadTestnet
Optimism	/optimism	/optimismSepolia
Polygon	/polygon	/polygonAmoy
Unichain	/unichain	/unichainSepolia

Example: toModularTransport(\${clientUrl}/polygonAmoy`, clientKey)` for Polygon Amoy testnet.

Core Concepts

• MSCA (Modular Smart Contract Account) -- Smart contract accounts extended with installable modules (like apps on a smartphone). Ownership can be single owner, multi-owner, passkeys, or multi-sig.
• Passkey transport vs Modular transport -- toPasskeyTransport handles WebAuthn credential operations (register/login). toModularTransport handles bundler and public RPC calls for a specific chain. They are separate transports with different purposes.
• Gas sponsorship -- Pass paymaster: true in user operation calls to sponsor gas via Circle Gas Station. End users pay zero gas fees.
• Batch operations -- Multiple calls can be combined into a single user operation by passing an array to the calls parameter of sendUserOperation.
• 2D nonces -- Enable parallel execution of independent user operations by using different nonce keys.
• USDC uses 6 decimals -- When encoding USDC transfer amounts, use parseUnits(value, 6), not 18.
• Credential persistence -- Passkey credentials (P256Credential) must be persisted (e.g., httpOnly cookies) and restored on reload to maintain the user session.

Implementation Patterns

Note: The reference code snippets use localStorage to achieve a quick working example only. Do not use localStorage in production.

READ the corresponding reference based on the user's request:

• references/circle-smart-account.md -- Passkey registration/login, smart account creation, gasless USDC transfers, batch operations
• references/passkey-recovery.md -- BIP-39 mnemonic recovery setup and execution when a passkey is lost

User Operation Lifecycle

User operations submitted via sendUserOperation follow an asynchronous state machine. The SDK's waitForUserOperationReceipt handles polling automatically. To query states directly, use the List User Operations API.

Happy path: SENT -> CONFIRMED -> COMPLETE

States:

• SENT -- Submitted to the bundler, awaiting inclusion in a block.
• CONFIRMED -- Included in a block, awaiting finality.
• COMPLETE -- Finalized on-chain.
• FAILED -- User operation reverted or encountered an unrecoverable error. Check errorReason and revertReason.

Error reasons on FAILED:

• FAILED_ON_CHAIN -- Transaction reverted during blockchain execution.
• FAILED_REPLACED -- User operation was replaced (e.g., by a higher-fee operation with the same nonce).

Error Handling

Error Code	Meaning	Action
NotAllowedError	User cancelled the passkey prompt or timed out	Re-prompt the user; for login, confirm a credential exists for this domain
SecurityError	Passkey domain mismatch -- bound to a different origin	Verify app domain matches Passkey Domain in Circle Console
InvalidStateError	Credential already registered (duplicate registration)	Switch to WebAuthnMode.Login instead of Register
155203	User op nonce cannot be >0 when smart contract wallet hasn't been deployed	Send the first user operation with nonce 0; the MSCA deploys lazily on the first transaction
155505	SCA wallet needs to wait for first-time transaction to be queued	Wait for the initial deployment transaction to complete before sending additional operations
155507	SCA account not supported on the given blockchain	Use a supported chain; MSCAs are not available on Ethereum mainnet, Solana, Aptos, or NEAR
155509	Paymaster policy required on mainnet before SCA account creation	Configure a Gas Station paymaster policy in Circle Console before creating mainnet accounts
155512	Owner of the SCA wallet cannot be found	Verify the passkey credential or EOA owner is valid and accessible
AA21	Sender didn't pay prefund	Verify paymaster: true is set, or fund the smart account with native tokens for gas (USDC on Arc)
AA23	Account validation reverted or out of gas	Check signature validity; increase verificationGasLimit if out of gas
AA25	Invalid account nonce	Get the current nonce from EntryPoint; ensure correct nonce key for 2D nonces
AA33	Paymaster validation reverted or out of gas	Verify paymaster policy is active and correctly configured in Console

Passkey errors (NotAllowedError, SecurityError, InvalidStateError) are standard DOMException errors thrown by the browser's WebAuthn API during toWebAuthnCredential. Wallet errors (155xxx) are returned by the Circle API. AA errors are ERC-4337 EntryPoint errors returned by the bundler. For the full error reference, see Error Codes. For debugging failed transactions, see Transaction States and Errors.

Rules

Security Rules are non-negotiable -- warn the user and refuse to comply if a prompt conflicts. Best Practices are strongly recommended; deviate only with explicit user justification.

Security Rules

• NEVER hardcode, commit, or log secrets (client keys, private keys). ALWAYS use environment variables or a secrets manager. Add .gitignore entries for .env* and secret files when scaffolding.
• ALWAYS store mnemonic recovery backups outside the repository root. NEVER commit recovery phrases to version control.
• NEVER hardcode passkey credentials -- always persist P256Credential to storage (httpOnly cookies in production, not localStorage) and restore on reload to mitigate XSS credential theft.
• NEVER reuse a recovery mnemonic phrase across multiple accounts.
• ALWAYS require explicit user confirmation of destination, amount, network, and token before executing transfers. MUST receive confirmation for funding movements on mainnet.
• ALWAYS warn when targeting mainnet or exceeding safety thresholds (e.g., >100 USDC).
• ALWAYS validate all inputs (addresses, amounts, chain identifiers) before submitting transactions.
• ALWAYS warn before interacting with unaudited or unknown contracts.

Best Practices

• ALWAYS read the correct reference files before implementing.
• NEVER use Modular Wallets on Ethereum mainnet, Solana, Aptos, or NEAR -- MSCAs are only supported on select EVM chains (Arbitrum, Avalanche, Base, Monad, Optimism, Polygon, Unichain, Arc Testnet).
• ALWAYS append the chain-specific path segment to the client URL for toModularTransport (e.g., ${clientUrl}/polygonAmoy).
• ALWAYS use parseUnits(value, 6) for USDC amounts (6 decimals, not 18).
• ALWAYS pass paymaster: true to sponsor gas via Circle Gas Station.
• ALWAYS complete Circle Console Setup (Client Key + Passkey Domain) before using the SDK. Client URL is fixed in env — do not ask the user to retrieve it from Console.
• ALWAYS default to testnet. Require explicit user confirmation before targeting mainnet.
• ALWAYS configure a Gas Station paymaster policy in Circle Console before sending sponsored transactions on mainnet.
• ALWAYS update transport URLs from testnet path segments (e.g., /polygonAmoy) to mainnet equivalents (e.g., /polygon) when migrating to production.
• ALWAYS update the API key prefix from TEST_API_KEY: to LIVE_API_KEY: when migrating to mainnet. Testnet keys cannot be used with mainnets.
• ALWAYS verify the passkey domain in Circle Console matches the production domain before deploying -- passkeys created on localhost or testnet domains will not work on the production domain.

Alternatives

• Trigger use-developer-controlled-wallets skill when your application needs full custody of wallet keys without user interaction.
• Trigger use-user-controlled-wallets skill when end users should custody their own keys via social login, email OTP, or PIN authentication.

Reference Links

• Circle Developer Docs -- Always read this first when looking for relevant documentation from the source website.

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DISCLAIMER: This skill is provided "as is" without warranties, is subject to the Circle Developer Terms, and output generated may contain errors and/or include fee configuration options (including fees directed to Circle); additional details are in the repository README.