Paymaster is a smart contract that allows for the establishment of flexible transaction fee policies, such as allowing DApps to sponsor fees for users or using ERC-20 tokens to pay gas fees. Paymaster can be considered a solution that simplifies the transaction fee payment experience for users through the ERC-4337 standard from Account Abstraction technology. Let's explore the concept and operation of Paymaster in the article below!
What is Paymaster? An optimal solution for transaction fee payment from Account Abstraction
What is Paymaster?
Paymaster is a smart contract that allows for the establishment of flexible transaction fee policies, such as allowing DApps to sponsor fees for users or using ERC-20 tokens to pay gas fees. Paymaster can be considered a solution that simplifies the transaction fee payment experience for users through the ERC-4337 standard from Account Abstraction technology.
What is Paymaster?
Paymaster was introduced in the EIP-4337 proposal by integrating Account Abstraction to create more flexibility and convenience in the transaction experience. Currently, many DApps on various blockchain networks have successfully integrated Paymaster, with the most notable being SyncSwap, Holdstation (ZKsync), Nostra Finance (Starknet),...
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How Paymaster Works
Paymaster operates as a smart contract that allows users to pay their transactions in the most convenient way. When Paymaster sponsors a transaction, it will pay the transaction fee on behalf of the user. This can be done through an off-chain service that decides to sponsor certain transactions or through an automated smart contract that pays for the transactions.
Paymaster operates based on Account Abstraction with the following two components:
- UserOperation: This component contains all the information about the user's transaction, such as the sender, the maximum transaction fee, etc. Each transaction that Paymaster wants to execute must go through the UserOperation first.
- EntryPoint contract: This is the contract that executes and verifies the UserOperation transactions. In some specific cases, the Paymaster smart contract must also stake ETH with the EntryPoint to ensure security.
How Paymaster Works
Currently, DApps that integrate Paymaster will have two forms:
- Sponsor Transaction: This form allows developers from the DApp to pre-pay a certain transaction fee. From here, users do not need to pay gas fees on the network when using the services or products on the DApp, and the pre-paid amount will be gradually deducted.
- ERC-20 Payments: This form allows users to pay transaction fees using other ERC-20 tokens instead of the network's native token. For example, on the zkSwap Finance of the ZKsync network, you can choose USDC to pay the transaction fee instead of ETH.
Using USDC as a transaction fee with Paymaster on zkSwap Finance
Advantages and Disadvantages of Paymaster
Advantages
- Flexible gas fee payment options: Paymasters support two modes, Sponsor Transaction and ERC-20 Payments, allowing DApps to easily attract users to use their products.
- Enhance user experience: By integrating Paymaster and Account Abstraction technology, DApps can easily attract more Web2 users to use their blockchain-based products.
Improved security: The components from Account Abstraction, such as smart contract accounts, provide higher security features compared to regular EOAs.
Disadvantages
- Complex technology: Developers need advanced skills to deploy and maintain Paymaster smart contracts on DApps. Risks from smart contract issues can increase transaction fees or expose security vulnerabilities that can lead to asset loss from hacker attacks.
- High maintenance costs: When DApps apply Paymaster, specifically the Sponsor Transaction mode to attract users, the long-term costs can be depleted.
Conclusion
Paymaster is a smart contract that allows for the establishment of flexible transaction fee policies, such as allowing DApps to sponsor fees for users or using ERC-20 tokens to pay gas fees. Currently, many DApps on various blockchain networks have successfully integrated Paymaster, with the most notable being SyncSwap, Holdstation (ZKsync), Nostra Finance (Starknet),...
Through this article, you should now have a better understanding of the concept and operation of Paymaster.
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