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Blog

The Hidden Cost of 'Gasless' Transactions: Who Bears the Security Burden?

An analysis of how meta-transactions and sponsored gas in DEXs like UniswapX shift cost and risk to relayers, creating systemic centralization and incentive misalignment.

introduction
THE ABSTRACTION TRAP

Introduction

Gasless transaction models shift operational complexity and security risk from end-users to hidden, centralized intermediaries.

Gasless transactions are a misnomer. The gas cost is not eliminated; it is abstracted and paid by a third party, creating a hidden security dependency. This shifts the trust model from the user's wallet to the sponsoring entity's infrastructure and solvency.

The primary cost is not gas, but centralization. Protocols like ERC-4337 Account Abstraction and relayers like Biconomy or Gelato enable this by bundling user operations. The security burden transfers from the user's private key to the relayer's ability to pay and censor.

This creates systemic risk. A compromised or insolvent relayer halts all dependent applications. The failure of a meta-transaction service like the early Gas Station Network (GSN) demonstrates the fragility of this model when not properly decentralized.

Evidence: Over 60% of transactions on leading L2s like Arbitrum and Optimism are now sponsored, concentrating payment power in a handful of relayers and creating a single point of failure for user onboarding.

thesis-statement
THE SECURITY SUBSIDY

The Core Argument

Gasless transaction models shift security costs from users to relayers, creating a hidden subsidy that centralizes risk and threatens long-term protocol stability.

Gasless transactions are a subsidy. Users pay zero gas, but the underlying blockchain still requires fees for execution and security. This cost is paid by a relayer, which must be economically compensated elsewhere, creating a hidden cost structure.

The security burden shifts to relayers. Protocols like ERC-4337 Account Abstraction and intents-based systems (UniswapX, CowSwap) outsource transaction execution. The relayer's solvency and honest behavior become the new security perimeter, replacing the user's direct stake.

This creates centralization pressure. To manage this liability, relayers must scale capital and optimize execution, favoring large, centralized operators. This mirrors the MEV supply chain centralization seen in builders and searchers on networks like Ethereum.

Evidence: In ERC-4337, the Paymaster contract funds user gas. If its pricing is wrong or it gets drained, the entire user base relying on that Paymaster is affected, demonstrating the concentrated risk point.

THE HIDDEN COST OF 'GASLESS' TRANSACTIONS

Relayer Risk Matrix: A Comparative View

Compares the security and economic trade-offs of different transaction sponsorship models, detailing who bears the risk and under what conditions.

Risk Vector / FeatureCentralized Relayer (e.g., Early MetaMask)Decentralized Verifier Pool (e.g., UniswapX, Across)Intent-Based Auction (e.g., CowSwap, Anoma)

User Pre-Signs Transaction

Relayer Can Censor/Reorder

Relayer Can Frontrun User

Conditional (if malicious)

Settlement Guarantee for User

None

Bonded (e.g., $2M on Across)

Batch Auction Finality

Primary Security Deposit

Reputation & Legal

Staked Capital (e.g., 50 ETH)

Solver Bond (e.g., 10 ETH)

Failure Mode for User

Lost opportunity, griefing

Bond slashing & fallback relay

Batch fails, transaction reverted

Typical Fee Model

Fixed % or spread

Competitive auction bid

Surplus extraction from MEV

Who Bears Gas Price Volatility Risk

Relayer (priced into fee)

Filler (hedged via auction)

Solver (captured in bid)

deep-dive
THE SUBSIDY

The Relayer's Dilemma: Incentives vs. Solvency

Gasless transaction models shift the security burden from users to undercapitalized relayers, creating systemic solvency risk.

Gasless UX creates a hidden liability. Users sign intent messages, but a third-party relayer must pay the gas to execute them on-chain. This separates payment from execution, creating a classic principal-agent problem where the agent's solvency is the system's weakest link.

Relayer incentives are structurally misaligned. Protocols like UniswapX and Across rely on competitive, permissionless relayers who bid for user orders. Their profit margin is the difference between the user's fee and the network gas cost, which is volatile and unpredictable.

This leads to chronic undercapitalization. Most relayers operate with minimal capital buffers to maximize capital efficiency. During a gas spike or a network outage, these thin margins evaporate, causing relayers to go insolvent or stop service, breaking the 'gasless' promise for users.

Evidence: The MEV-Boost auction model demonstrates the risk. Just as block builders in Ethereum's PBS must post bonds, intent-based systems lack equivalent solvency guarantees. A single failed fill on a large cross-chain swap via LayerZero or Stargate can cascade into a liquidity crisis for the relayer network.

counter-argument
THE HIDDEN COST

The Rebuttal: Isn't This Just Necessary Infrastructure?

Gasless transaction models shift the security burden from users to a new class of centralized risk-bearing intermediaries.

Gasless UX shifts risk. Users pay no gas, but a third party—a relayer, solver, or sequencer—must front the capital and risk of transaction failure. This creates a centralized point of failure for settlement and censorship.

The business model is extractive. These intermediaries are not charities; they monetize via MEV capture, fees, or token incentives. Protocols like UniswapX and Across embed this cost in worse swap rates or hidden fees, making the transaction 'gasless' but not free.

Security becomes a liability. The system's liveness depends on these actors' solvency and honesty. A run on relayers during network congestion or volatile gas prices could collapse the intent-based stack, as seen in early EIP-4337 bundler experiments.

Evidence: In Q1 2024, intent-based protocols processed over $10B in volume, with solvers capturing an estimated 30-50 bps in implicit costs, a direct transfer of the security burden from users to the system's liquidity layer.

risk-analysis
THE HIDDEN COST OF 'GASLESS' TRANSACTIONS

Systemic Vulnerabilities

Abstracting gas fees shifts the security burden, creating new systemic risks and hidden costs for users and protocols.

01

The Problem: The Relayer Cartel Risk

Gasless transactions rely on third-party relayers to pay fees. This centralizes transaction ordering and censorship power, creating a new, opaque market layer.

  • Centralized Failure Point: A dominant relayer like Gelato or Biconomy becomes a single point of failure for thousands of dApps.
  • MEV Extraction: Relayers can front-run or sandwich user transactions, capturing value meant for users or protocols like Uniswap.
  • Censorship Vector: Compliance-driven relayers could blacklist addresses, breaking the permissionless promise.
>60%
Market Share
$0
User Visibility
02

The Solution: Intent-Based Architectures

Frameworks like UniswapX, CowSwap, and Across shift the paradigm from transaction execution to outcome fulfillment, decentralizing the burden.

  • Competitive Solver Networks: Users express a desired outcome (e.g., 'swap X for Y'), and a decentralized network of solvers competes to fulfill it best.
  • No Default Privilege: No single entity controls the flow; the best execution wins, reducing cartelization.
  • Cost Internalization: Solvers bundle and optimize, bearing gas costs as a competitive business expense, not a rent.
~20%
Better Prices
Decentralized
Execution
03

The Problem: Subsidy Ponzinomics

To bootstrap adoption, protocols and wallets offer fee subsidies, creating unsustainable economic models that collapse onto users or tokenholders.

  • Temporary Illusion: 'Free' transactions are a marketing tool funded by token emissions or treasury reserves.
  • Security Debt: When subsidies end, users face real costs, and activity plummets, as seen in early Polygon and BSC dApps.
  • Token Holder Burden: The security cost is socialized via inflation or treasury drain, diluting value.
$100M+
Subsidy Programs
-90%
Post-Subsidy Activity
04

The Solution: Account Abstraction (ERC-4337)

Native protocol-level account abstraction allows users to pay fees in any token or have a third party (a 'paymaster') sponsor them transparently, without relayer intermediation.

  • Protocol-Level Security: Sponsorship logic is on-chain and verifiable, removing off-chain trust assumptions.
  • User-Chosen Sponsors: Users can select paymasters based on reputation and rates, creating a competitive market.
  • Session Keys: Allows for true 'gasless' sessions within defined limits, with security models clear to the user.
On-Chain
Verification
User Choice
Paymaster
05

The Problem: Opaque Cross-Chain Security

Gasless cross-chain bridges like LayerZero's Ultra Light Nodes or Axelar abstract gas complexity but obscure the underlying security model and who ultimately pays.

  • Validator Cost Obfuscation: The gas cost for off-chain verifiers is hidden, paid by the protocol's token incentives or treasury.
  • Liquidity Provider Risk: LPs in bridges like Across or Stargate bear the capital cost and slashing risk for 'fast' gasless transactions.
  • Security is an Afterthought: Users see 'free' bridges but don't see the Wormhole-style hack risk embedded in the abstraction.
$2B+
Bridge TVL at Risk
Opaque
Cost Model
06

The Solution: Explicit Security Budgets

Protocols must transparently account for and disclose the cost of security, making it a first-class economic parameter, not a hidden subsidy.

  • Staking-for-Security: Models like EigenLayer restaking explicitly price and allocate security budgets from stakeholders.
  • Fee Transparency: DApps should show the 'true cost' of a transaction, including the security premium paid by sponsors.
  • Sustainable Models: Shift from ponzi subsidies to fee-for-service or insurance-backed models, as explored by Nexus Mutual.
Auditable
Costs
Sustainable
Model
future-outlook
THE SECURITY BURDEN

The Path Forward: Aligning Incentives

Gasless transaction models shift security costs from users to third parties, creating systemic risk if incentives are misaligned.

Gasless transactions externalize costs. The user's fee burden transfers to a third-party relayer or bundler, who must front the gas and manage execution. This creates a new principal-agent problem where the payer's incentives diverge from the user's.

Current models are subsidy-based. Protocols like UniswapX and Across use off-chain solvers who compete on price, with costs covered by protocol treasuries or MEV extraction. This is a temporary scaling hack, not a sustainable security model.

The endpoint becomes the weakest link. Security now depends on the relayer's solvency and honesty. A malicious or bankrupt relayer in a system like ERC-4337 account abstraction can censor transactions or fail to submit bundles, breaking the user illusion.

Evidence: The Ethereum Foundation's ERC-4337 bundler market is nascent, with profitability relying heavily on capturing MEV. Without clear fee markets, bundlers will optimize for extractable value, not network security or user experience.

takeaways
THE SECURITY SUBSIDY

Key Takeaways for Builders

Gasless UX is a front-end illusion; the security cost is back-loaded onto relayers, solvers, and LPs.

01

The Problem: The Relayer is the New MEV Target

Gasless transactions via meta-transactions or account abstraction shift the gas payment and execution risk to a relayer. This creates a centralized honeypot for transaction censorship and sandwich attacks. The relayer's capital is now the system's security budget.

  • Attack Surface: Relayer's private mempool becomes a target for bribery and front-running.
  • Cost Model: Security scales with the relayer's profit margin, not user fees.
1-of-N
Trust Assumption
$$$
Attack Incentive
02

The Solution: Intent-Based Architectures (UniswapX, CowSwap)

Decouple ordering from execution. Users submit signed intents (what they want), not transactions (how to do it). Competitive solvers bid to fulfill intents, internalizing execution risk and competing on price.

  • Security Shift: Risk is distributed across a permissionless solver network.
  • Economic Model: Security is paid via auction efficiency captured by the protocol, not user gas.
~$10B+
Processed Volume
Multi-chain
Native Scope
03

The Reality: Liquidity Providers are the Ultimate Backstop

In cross-chain intents (Across, LayerZero), the security of a 'gasless' bridge is the liquidity in the destination chain's pool. If a solver fails, LPs are slashed or suffer bad debt. The 'gasless' UX is a call option on LP capital.

  • Hidden Cost: LP yields must compensate for this tail risk of solver default.
  • System Design: Protocols like Across use a bonded solver model to align incentives, but the capital burden remains.
7-30 Days
LP Withdrawal Delay
Bonded
Solver Stake
04

The Trade-off: You Can't Eliminate Trust, Only Redistribute It

Gasless designs don't remove trust; they move it from the user (paying gas) to a new entity (relayer/solver/LP). The security burden is a non-zero sum game. The goal is to shift it to the party best equipped to manage and price the risk.

  • Builder's Choice: Decide who bears the burden: a centralized relayer (fast, risky), a permissionless network (slow, robust), or LPs (capital-heavy).
  • First Principle: Map every 'gasless' flow to its final capital at risk. That entity is your real security provider.
Trilemma
Trust vs Cost vs Speed
Always >0
Security Cost
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