Why Gasless Transactions Are a Non-Negative for Mainstream Identity

Gasless transactions eliminate onboarding friction. Every new user must acquire native tokens before interacting, a wallet abstraction failure that blocks billions. Protocols like Biconomy and Safe solve this with sponsored transactions and account abstraction, making the first interaction free.

Identity precedes finance for mass adoption. The mainstream user journey starts with proving identity, not swapping tokens. Gas fees create a permissioned barrier that contradicts Web3's open ethos, making systems like Worldcoin's World ID or ENS inaccessible without upfront payment.

The cost is a protocol design choice. Layer 2s like Arbitrum and zkSync demonstrate sub-cent fees, proving the technical feasibility. The remaining hurdle is economic abstraction, where dApps or identity issuers absorb costs as customer acquisition spend, a model proven by EIP-4337 account abstraction wallets.

Gas is a pre-purchase requirement. A user must acquire and manage a volatile asset before interacting with a dApp, which is a non-starter for 99% of internet users. This creates a friction wall that blocks identity verification and onboarding.

Account abstraction solves the symptom, not the disease. While ERC-4337 and smart wallets like Safe enable sponsored transactions, they delegate the tax to the application. This burdens developers with operational overhead and shifts, but does not eliminate, the economic barrier.

The tax distorts identity signals. A user's on-chain identity becomes a function of their gas-paying capability, not their reputation or behavior. Systems like Gitcoin Passport must work around this noise, measuring activity that users can afford to signal.

Evidence: Ethereum's average transaction fee of $1-3 is a regressive tax that excludes users in regions where this represents a significant portion of daily income, fragmenting global digital identity.

Gasless onboarding eliminates friction. A user signs a message, not a transaction, enabling a sponsor to pay the fee. This mirrors web2's 'Sign in with Google' flow, removing the requirement for users to hold native tokens before engaging with an application.

Paymasters enable identity-as-a-service. Protocols like Ethereum's ERC-4337 and Starknet's native account abstraction formalize this. A project like Candide Wallet or Biconomy can sponsor gas for verified users, directly linking transaction sponsorship to identity verification.

Sponsored transactions are not a cost center. They are a customer acquisition tool. The cost of a few cents in gas is negligible compared to traditional CAC. This flips the model from users paying for access to applications paying for users.

Evidence: Visa's gasless pilot on Starknet demonstrates the enterprise use case. They sponsor gas for users minting NFTs, proving that abstracting gas is a prerequisite for onboarding non-crypto-native entities at scale.

Gasless transactions invite Sybil attacks. Removing the native cost of state change eliminates the primary economic barrier to spam. Protocols like Ethereum's EIP-4337 account abstraction or Solana's priority fees maintain a cost for network resources precisely to deter this.

The subsidy model is unsustainable. Projects like Pimlico or Biconomy that sponsor gas create a centralized cost sink. This model fails at scale, shifting the burden to a single entity's treasury instead of a distributed user base.

Proof-of-Humanity becomes a prerequisite. For true Sybil resistance without gas, systems must integrate verifiable credentials or attestations. This moves the cost from transaction execution to identity verification, a trade-off many users reject.

Evidence: The 2022 Optimism Quests airdrop farming demonstrated that gasless interactions, when gamified, lead to massive, low-value Sybil activity that distorts metrics and drains protocol treasuries.

Gasless onboarding eliminates friction. Users authenticate with familiar Web2 methods like Google OAuth, while the application's relayer (e.g., Biconomy, Gelato) sponsors the gas for creating a smart account. This mirrors the 'freemium' model where user acquisition justifies the cost.

Sponsored identity creates a new data layer. Protocols like Worldcoin or Ethereum Attestation Service issue verifiable credentials on-chain. Applications pay to write this data, monetizing it through targeted services or compliance, reversing the traditional ad-tech data flow.

The business model inverts. Instead of users paying for sovereignty, enterprises pay for verified users. This aligns with ERC-4337 account abstraction, where 'paymasters' enable sponsored operations, making identity a service, not a tax.