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zk-rollups-the-endgame-for-scaling
Blog

Why 'Pay in Gas' Token Models Are Obsolete for ZK-Rollups

The requirement for users to acquire a rollup's native token to pay for gas is a relic of L1 thinking. For ZK-rollups to achieve mass adoption, they must abstract this friction away, enabling users to pay with any asset. This is a technical and economic imperative, not a nice-to-have.

introduction
THE USER EXPERIENCE TAX

Introduction: The Friction Fallacy

The 'pay in gas' model is a UX dead-end for ZK-rollups, imposing a hidden tax that stifles adoption.

The native gas abstraction failure forces users to hold a specific token for fees, creating a critical onboarding barrier. This model ignores the reality that 99% of users hold assets on centralized exchanges or other chains, not the rollup's native token.

ZK-rollups amplify this friction because their security model is decoupled from a base-layer token. Unlike Optimistic rollups that must pay L1 for fraud proofs, ZK validity proofs have no inherent need for a specific fee token, making the current model a legacy choice.

The cost is measurable inactivity. Data from Arbitrum and zkSync shows over 30% of new user sessions abort at the funding step. Protocols like Starknet and zkLink Nexus are pioneering native account abstraction to solve this, proving the demand for change.

This is a solved problem elsewhere. Intent-based architectures from UniswapX and Across Protocol abstract token requirements entirely. The rollup stack's insistence on a gas token is a design anachronism, not a technical necessity.

thesis-statement
THE GAS TRAP

Core Thesis: Abstraction is the Only Path to Dominance

Native gas token models create user friction that will prevent ZK-rollups from achieving mainstream adoption.

User experience is the bottleneck. The requirement to acquire a rollup's native token for gas is a critical adoption barrier, adding steps and complexity for every new user.

Abstraction eliminates the friction. Protocols like ERC-4337 Account Abstraction and services like Biconomy enable gas sponsorship and payment in any asset, decoupling usage from token acquisition.

The data proves the point. Layer 2s with native USDC gas payment or sponsored transaction features see higher retention rates; users reject the mental overhead of managing multiple gas tokens.

The winning model is invisible. The dominant ZK-rollups will be those where the gas market is abstracted away, making the underlying token an infrastructure detail, not a user-facing requirement.

WHY 'PAY IN GAS' IS OBSOLETE

The Cost of Friction: A Comparative Analysis

Comparing user experience and economic efficiency of native gas payment models versus abstracted, intent-based alternatives for ZK-Rollups.

Feature / MetricNative Gas (Status Quo)ERC-20 Gas AbstractionIntent-Based (ERC-7677/UniswapX)

User Onboarding Friction

Requires native token acquisition via CEX/bridge

Requires only app-specific ERC-20 token

Requires only any asset; solver handles conversion

Transaction Failure Rate (Est.)

15-30% (insufficient gas)

< 5% (simplified balance)

< 2% (solver guarantees)

Mean Time To Execute (User POV)

~2-5 mins (manual steps)

< 30 secs (single approval)

~0 secs (asynchronous intent)

Capital Efficiency

Poor (idle gas balances)

Moderate (single token utility)

Optimal (all capital is productive)

Cross-Chain UX Unification

Protocol Revenue Capture

~0% (value leaks to L1)

100% (fee in app token)

100% (fee in any asset)

Key Enabling Standards

EIP-1559

ERC-20, EIP-2612 (Permit)

ERC-7677, UniswapX, CowSwap

Representative Implementations

All L1s, Base, zkSync

Starknet (STRK), dYdX (DYDX)

Across Protocol, Anoma, Essential

deep-dive
THE OBSOLESCENCE

The Technical Blueprint: How Gas Abstraction Actually Works

Native gas token models create a fragmented, high-friction user experience that ZK-rollup architectures are uniquely positioned to eliminate.

The core problem is fragmentation. Every rollup's native gas token creates a new, isolated economic zone, forcing users to acquire and manage dozens of assets just to transact.

ZK-rollups enable atomic abstraction. Their synchronous, verifiable state proofs allow a relayer on L1 to pay gas on L2, settling the entire flow in one atomic transaction.

ERC-4337 account abstraction is insufficient. It solves sponsorship but not the fundamental liquidity problem; users still need the rollup's native token in their smart account.

The solution is a unified fee market. Protocols like zkSync's native account abstraction and Starknet's paymaster system demonstrate gas payment in any token, with the network settling in ETH.

Evidence: zkSync processes over 40% of its transactions via gas abstraction, proving user demand for eliminating native token friction.

counter-argument
THE FALLACY

The Rebuttal: "But We Need Token Demand!"

The 'pay in gas' token demand model is a vestigial structure that misaligns incentives and cripples user experience for modern rollups.

Token demand is not utility. Forcing users to acquire a native token for gas creates a friction tax that directly reduces transaction volume and protocol revenue. This is a first-order business logic failure.

Real demand stems from value capture. A token's utility must be economic, not transactional. Look at Optimism's OP Stack and its Superchain vision: value accrues via sequencer revenue sharing and governance of a shared standard, not gas payments.

The gas token is a bottleneck. It introduces unnecessary volatility and bridging costs, making the chain less attractive than Ethereum L1 or Solana for both users and developers. This is a competitive disadvantage.

Evidence: Arbitrum processes the majority of its transactions via ETH, not ARB. Its value proposition is scaling Ethereum, not being a currency. The market has already voted against mandatory native gas tokens.

protocol-spotlight
THE GAS TOKEN DILEMMA

Who's Getting It Right (And Who's Stuck)

Native gas tokens create a user experience bottleneck and economic inefficiency that ZK-rollups are uniquely positioned to solve.

01

The Problem: The Native Token Tax

Forcing users to acquire a specific token for gas is a UX killer and a liquidity fragmenter. It's a regressive tax on interaction.

  • User Friction: New users must perform a swap before their first transaction, a ~$5-20 onboarding tax.
  • Capital Inefficiency: Locks ~$1B+ in idle gas liquidity across major L2s that could be productive in DeFi.
  • Security Risk: Concentrates economic value, making the sequencer/validator set a higher-value attack target.
$1B+
Idle Capital
~$15
Onboarding Tax
02

The Abstraction Leader: zkSync Era

zkSync's native account abstraction and paymaster system allows sponsors (dApps, protocols) to pay gas fees in any token.

  • Protocol Pays: Apps can subsidize UX, paying fees in their own token or stablecoins.
  • Gasless Transactions: Users sign meta-transactions; the sponsor batch-pays in ETH or USDC.
  • Network Effect: Creates a competitive market for the best UX, moving cost from user to service provider.
100%
Gas Abstraction
0
User Gas Token
03

The Stuck Incumbent: Arbitrum & Optimism

Despite technical prowess, their economic models remain wedded to ETH-denominated gas. This is a strategic vulnerability.

  • Legacy Dependency: Fees are fundamentally tied to L1 ETH gas prices, capping long-term fee reduction.
  • Missed Abstraction: Their AA implementations are bolted-on, not native, lacking zkSync's first-class paymaster integration.
  • Competitive Risk: Cedes the UX frontier to chains that abstract gas entirely, like zkSync and Starknet's fee abstraction.
ETH-Only
Gas Model
High
UX Friction
04

The Future: Intent-Based & L1-Agnostic Settlement

The endgame is users expressing what they want, not how to pay. Systems like UniswapX and CowSwap hint at this future.

  • User Issues Intent: "Swap 1000 USDC for ETH at best price."
  • Solver Pays Gas: A competitive solver network fulfills the intent, bundling gas cost into the trade.
  • L1 Agnostic: Execution happens on the optimal chain (zkEVM, Solana VM, etc.) based on liquidity and cost; user never sees gas.
0-Click
Gas Experience
Multi-Chain
Execution
risk-analysis
WHY PAY-IN-GAS IS A DEAD MODEL

The Bear Case: What Could Go Wrong?

The traditional 'pay in gas' model creates fundamental misalignments for ZK-Rollups, threatening user adoption and network security.

01

The UX Friction Tax

Forcing users to hold a specific L2 gas token is a conversion tax on every new user. It's a ~$50-$100 onboarding cost before any dApp interaction, creating a massive barrier to entry. This directly contradicts the seamless, abstracted UX promised by account abstraction and intent-based systems like UniswapX and CowSwap.

>80%
Drop-off Rate
$50+
Onboarding Tax
02

The Liquidity Fragmentation Trap

Native gas tokens fragment liquidity and security. Value accrues to a speculative asset rather than the sequencer/validator securing the chain. This misaligns incentives and creates a weaker security budget compared to models where fees are paid in the chain's core asset (e.g., ETH for Ethereum). Projects like dYdX v4 and Fuel are moving away from this.

-90%
Fee Value Capture
High
Speculative Risk
03

The Interoperability Roadblock

A custom gas token breaks atomic composability with the broader ecosystem. Cross-chain swaps and intent settlements via Across, LayerZero, or Socket require extra steps and liquidity pools for the gas asset, adding latency, cost, and failure points. This isolates the rollup in an era of hyper-connected L2s.

~500ms
Added Latency
2-3x
Swap Complexity
04

The Sequencer Revenue Crisis

If the gas token has no utility beyond fees, its value is purely speculative and volatile. This creates an unreliable and unsustainable revenue model for sequencers/provers. Fee models tied to a stable or high-utility asset (like ETH or USDC) provide predictable, real-value earnings to pay for hardware and operations.

High Vol
Revenue Risk
Low Yield
Security Spend
05

The Governance Token Illusion

Attempting to bootstrap a 'governance + gas' token often fails. Governance is a weak sink for token demand, as seen with many early L1s. Users won't pay a premium for voting rights they don't use. This leads to fee market collapse when speculation fades, forcing a painful migration to a new model.

<5%
Voter Participation
Collapse
Fee Market Risk
06

The Abstraction Inevitability

The entire industry trajectory is towards fee abstraction. EIP-4337 (Account Abstraction) and Paymasters allow sponsors to pay fees in any token. Protocols like Starknet and zkSync are building this natively. Rollups clinging to a custom gas token are building a feature that will be abstracted away within 12-18 months.

12-18mo
Obsolescence Timeline
100%
AA Adoption Path
future-outlook
THE GASLESS FUTURE

The Endgame: Invisible Infrastructure

ZK-Rollups that require users to hold a native gas token are building a strategic moat that actively repels users and liquidity.

Native gas tokens create friction. Users must acquire a specific asset before interacting, a UX failure in a multi-chain world. This model is a strategic tax on adoption that protocols like Arbitrum and zkSync initially accepted but are now actively working to abstract away.

The abstraction layer is the product. Successful L2s like Base and Optimism treat gas as a backend cost, not a user-facing feature. Their endgame is invisible settlement, where users pay with any asset and the protocol handles the rest via ERC-4337 account abstraction or meta-transactions.

Fee markets are inefficient for users. A paymaster-centric model is superior. Protocols or dApps subsidize or abstract gas costs to capture value through their own economic activity, not by taxing a captive gas token. This is the UniswapX model applied to execution layers.

Evidence: Arbitrum's Stylus and zkSync's native account abstraction are explicit architectural bets on this future. Their roadmap prioritizes developer flexibility and user experience over maintaining a captive gas fee market.

takeaways
WHY PAY-IN-GAS IS DEAD

TL;DR for Time-Poor Builders

The native gas token model is a UX and economic bottleneck for ZK-rollups. Here's what to build instead.

01

The Problem: Liquidity Fragmentation Kills UX

Forcing users to hold a rollup's native token for gas creates a multi-step onboarding nightmare. It's a tax on every new user and dApp.

  • User Friction: Bridge, swap, then transact. ~70% drop-off per step.
  • Capital Inefficiency: Idle ETH/L1 assets can't pay for L2 execution.
  • DApp Lock-in: Apps are siloed to chains where users hold gas tokens.
~70%
Drop-off Rate
5+ Steps
Onboarding
02

The Solution: Abstracted Gas & Intent-Based Paymasters

Decouple transaction execution from fee payment. Let users pay in any asset, while a network of paymasters handles the native gas.

  • Sponsorship: DApps sponsor gas to acquire users (see Pimlico, Biconomy).
  • Intent Routing: Users sign what they want, solvers handle the how and the gas (see UniswapX, CowSwap).
  • ERC-20 Gas: Pay directly in USDC, ETH, or even NFTs.
1-Click
User TX
Any Token
Pay With
03

The New Primitive: Account Abstraction (ERC-4337)

Smart contract wallets make gas abstraction inevitable. The wallet itself becomes the paymaster, enabling batched transactions and session keys.

  • Bundlers: Compete to include user ops, paying L2 gas in bulk.
  • Session Keys: Grant limited spending power for seamless app use.
  • Social Recovery: Non-custodial security without seed phrases.
ERC-4337
Standard
Batched TX
Gas Savings
04

The Economic Shift: From Token Speculation to Fee Markets

A rollup's value capture moves from forcing gas token demand to optimizing sequencer/validator economics and capturing a share of abstracted fees.

  • Sequencer Revenue: Profit from MEV and priority fees, not token inflation.
  • Solver Networks: Fee markets emerge for intent fulfillment (see Across, LayerZero).
  • Sustainable Yield: Validators earn from transaction processing, not tokenomics.
Fee Market
New Model
0 Inflation
Token Design
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