The Future of Gas: Who Pays, and Why It Matters

Gas is the ultimate design constraint. Every protocol architecture, from Uniswap's AMM curves to Lido's staking mechanics, is a direct response to the economic reality of on-chain execution costs.

The payer dictates the system's incentives. Whether the user, dApp, or a third-party relayer pays the fee determines who is optimized for and what behaviors emerge, creating a fundamental misalignment in today's 'user-pays' model.

Abstraction is inevitable. The current model of manual wallet topping and approval spam is a dead end; the future is intent-based architectures and account abstraction (ERC-4337) that shift the burden and complexity away from end-users.

Evidence: Over 60% of new users fail their first transaction due to gas complexity, and protocols like Coinbase's Smart Wallet and UniswapX are already abstracting gas to capture the next billion users.

Gas abstraction is inevitable. Users will not manually manage native gas tokens across dozens of chains. The winning model will be the one that makes gas invisible, shifting the cost and complexity to applications or third-party relayers.

The payer dictates the architecture. If applications pay, they build vertical integration and lock-in (see: dYdX, StarkEx). If third-party solvers pay, they create competitive, intent-based markets (see: UniswapX, Across).

This is a protocol design war. Account abstraction standards like ERC-4337 and ERC-7702 provide the battlefield, but the economic model determines the victor. The outcome decides whether we get walled gardens or open, efficient liquidity networks.

Evidence: The 90%+ fill rate for intents on UniswapX and Across demonstrates user preference for gasless, optimized execution, proving the demand for abstraction is already here.

Gas is a tax on state. Every blockchain transaction pays to update the global ledger, a cost that scales with computational complexity and network demand. This creates a direct friction tax on composability, where multi-step DeFi operations become prohibitively expensive.

Users are not the final payers. Applications like UniswapX and CowSwap abstract gas costs through intents, bundling, and MEV capture, effectively subsidizing users. The cost is instead borne by searcvers, solvers, and the protocol's treasury, shifting the economic burden upstream.

The real cost is opportunity. High gas prices on Ethereum L1 cede activity to cheaper chains like Arbitrum and Solana, fragmenting liquidity. This friction determines market structure, deciding whether an onchain game or micro-payment app is economically viable at all.

Evidence: Ethereum's average transaction fee of $1.50 represents a 30% tax on a $5 swap, making it non-viable. In contrast, Solana's sub-$0.001 fees enable entirely new application paradigms like DRiP and Tensorians.

Gas abstraction is inevitable. Users reject paying gas fees directly. Protocols like UniswapX and CowSwap now subsidize costs to capture volume, turning gas into a customer acquisition cost.

The payer dictates the network. The entity paying the gas fee controls transaction ordering and MEV extraction. This creates a fundamental power shift from users to application-layer 'merchants'.

Account abstraction enables this shift. Standards like ERC-4337 and ERC-7579 allow applications to sponsor transactions via paymasters. This creates a new business model for wallets and dApps.

Evidence: Base's Onchain Summer campaign spent over 700 ETH subsidizing user gas fees, directly proving the model's viability for driving adoption and onboarding.

Users will stop paying gas. Applications will abstract gas fees, absorbing them as a customer acquisition cost. This mirrors the web2 model where platforms pay for AWS, not the end-user. Protocols like Pimlico and Biconomy are building the infrastructure for this today.

The business model shifts to intent. The primary competition becomes who provides the best net outcome after fees. This favors intent-based architectures like UniswapX and CowSwap, which already optimize for total execution cost, not just gas.

L2s will compete on subsidy programs. To attract developers, chains like Arbitrum and Optimism will fund gas abstraction pools. The L2 with the deepest subsidy war chest will capture the next wave of high-volume, low-margin applications.

Evidence: Account abstraction wallets using paymasters already process over 3 million user operations monthly. This is the zero-momentum for the gasless future.