Why Your Gas Token Strategy is Now Obsolete

Gas abstraction protocols like Biconomy and Pimlico now allow users to pay fees in any token. This eliminates the primary user acquisition hurdle of requiring a native token balance before the first transaction.

Account abstraction (ERC-4337) makes the contract wallet the primary user interface. Smart accounts can sponsor gas, batch operations, and settle in a preferred currency, decoupling payment from execution.

The gas market is commoditized. Relayers and bundlers compete on price, creating a liquid market for fee payment where the user's token choice is irrelevant to the underlying chain.

Evidence: Arbitrum's adoption of ERC-4337 and the growth of Paymaster transactions demonstrate that users prefer sessions and sponsored gas over managing native token balances for every interaction.

Gas abstraction is the new standard. Users no longer need the base chain's native token. Protocols like Particle Network and Biconomy provide gasless transactions where dApps subsidize or relay fees, turning gas into a B2B2C product they manage.

Account abstraction enables this shift. ERC-4337 and smart accounts from Safe or ZeroDev allow sponsorship of transaction fees via any token. The user's relationship with ETH or MATIC is severed; the dApp or wallet becomes the gas buyer.

The business model has inverted. Successful chains now compete on developer subsidies and grant programs, not user token holdings. Optimism's RetroPGF and Base's Onchain Summer fund gas for apps, making the chain's treasury the primary gas customer.

Evidence: Over 60% of transactions on Arbitrum are now sponsored, and Polygon's gas token MATIC is being phased out for POL in a new validator-stake model, decoupling it from user payments entirely.

Gas abstraction is the new standard. Users will no longer hold the native token of the chain they transact on. Protocols like EIP-4337 Account Abstraction and Solana's Token-2022 enable applications to sponsor fees or accept stablecoins, shifting the economic burden from the user to the service.

Execution is a commodity, settlement is sovereign. Layer 2s like Arbitrum and Optimism compete on execution cost, but their security and finality derive from Ethereum. This decouples the value of the execution token (e.g., ARB) from the security fee paid in ETH.

The economic layer is now an intent-based mesh. Systems like UniswapX and Across Protocol use fillers who compete on total cost, abstracting away the user's need to manage gas across multiple chains. The user expresses a desired outcome, not a transaction path.

Evidence: The data shows the shift. Over 60% of transactions on Polygon PoS are now sponsored, and intent-based architectures like CowSwap and 1inch Fusion consistently achieve better prices than native AMMs by routing through private solvers.

Subsidies are not revenue. Protocols like Arbitrum and Optimism use sequencer profits from MEV and transaction ordering to subsidize user gas fees. This creates a false economy where the protocol's core security budget depends on volatile, non-guaranteed income streams.

Centralization is a feature, not a bug. The economic model necessitates a single, trusted sequencer to capture the value required for the subsidy. This creates a centralized technical and economic bottleneck that contradicts decentralized scaling promises.

The L2 token is obsolete. When the sequencer captures value from MEV and fee ordering, the native gas token's utility is reduced to governance. This makes it a veil over a centralized cash flow business, not a fundamental protocol component.

Evidence: Arbitrum sequencer profits, which fund user subsidies, are derived from centralized transaction ordering. This model is incompatible with decentralized, permissionless sequencer sets proposed by Espresso Systems or Astria.