Fee payment is a UX bottleneck. Externally Owned Accounts (EOAs) force users to hold the native token of the chain they're using, creating a fragmented and costly onboarding experience.
solana-and-the-rise-of-high-performance-chains
Blog
The Future of Account Abstraction and Fee Payment Flexibility
Solana's high-performance architecture, combined with native account abstraction, will unlock fee sponsorship and multi-token payments, solving the UX bottlenecks that plague even the fastest chains.
introduction
THE PAYMENT PARADIGM
Introduction
Account abstraction is shifting the fee payment paradigm from a rigid user burden to a flexible, competitive market for transaction sponsorship.
ERC-4337 enables fee sponsorship. This standard decouples transaction execution from fee payment, allowing third parties like dApps or Paymasters to cover gas costs in any token.
This creates a competitive market for user acquisition. Protocols like Starknet and zkSync now subsidize fees, while services like Biconomy and Candide offer gasless transaction relay.
Evidence: The Pimlico paymaster network processed over 10 million sponsored transactions in 2024, demonstrating clear demand for abstracted fee mechanics.
key-trends
THE PAYMASTER PARADIGM SHIFT
Executive Summary
Account abstraction is moving beyond smart wallets to redefine the fundamental economics of blockchain interaction through flexible fee payment.
01
The Problem: The Gas Token Straitjacket
Users are forced to hold native tokens for fees, creating a massive UX and liquidity barrier. This stifles adoption and fragments capital.
- Blocks dApp-specific user acquisition (e.g., paying for a game in ETH, not game tokens).
- Creates ~$20B+ of idle, non-productive capital locked in wallets just for gas.
- Exposes users to volatile gas costs, making cost prediction impossible.
$20B+
Idle Capital
100%
UX Friction
02
The Solution: ERC-4337 Paymasters
A smart contract that pays transaction fees on behalf of users, enabling sponsorship and alternative payment methods. This is the core business model for Stackup, Biconomy, and Alchemy.
- Enables gasless onboarding: Users sign meta-transactions; dApps or employers cover costs.
- Unlocks payment in any token: Use USDC, wBTC, or even NFTs to pay for network fees via a swap.
- Allows for subscription models and fee abstraction, decoupling usage from tokenomics.
0
Upfront Gas
Any Token
Payment Method
03
The Future: Intent-Based Fee Markets
Paymasters evolve into solvers that compete to fulfill user intents at the best total cost, not just gas price. This mirrors the UniswapX and CowSwap model for transactions.
- Solvers bundle, route, and optimize across L2s, sidechains, and layerzero-style omnichain paths.
- Users express desired outcome (e.g., "swap X for Y on any chain"), not step-by-step execution.
- Creates a ~$1B+ market for solver services and MEV capture redirection.
-30%
Avg. Cost
Multi-Chain
Execution
04
The Hurdle: Centralized Relayer Risk
Current paymaster implementations often rely on a trusted relayer to broadcast transactions, creating a single point of failure and censorship.
- Relayer downtime equals network downtime for the dApp's users.
- Introduces regulatory KYC/AML attack vectors at the infrastructure layer.
- Contradicts decentralization ethos, pushing risk to entities like Biconomy or Stackup.
1
Failure Point
High
Censorship Risk
05
The Fix: Decentralized Verifiable Relaying
The endgame is a permissionless network of relayers, similar to EigenLayer operators, secured by staking and slashing. EIP-4337's Bundler spec is designed for this.
- Relayers stake ETH or other assets, penalized for censorship or malfeasance.
- User operations are cryptographically verifiable, ensuring execution integrity.
- Enables a robust, competitive market for transaction inclusion, reducing costs.
Permissionless
Relayer Set
Slashing
Security Model
06
The Killer App: Corporate & Institutional Onboarding
The real TAM is not crypto-natives, but enterprises who need predictable, fiat-denominated blockchain costs. Visa and PayPal are early signals.
- Enables SaaS-style billing: Enterprises pay monthly invoices in USD for employee or customer transactions.
- Abstracts private key management entirely via Safe{Wallet} smart accounts and policy engines.
- Unlocks the next 100M users who will never touch a seed phrase or buy ETH for gas.
100M+
User Target
Fiat Invoices
Billing
thesis-statement
THE PAYMENT FLOW
The Core Argument: Abstraction is an Economic Primitive
Fee abstraction transforms user acquisition from a technical hurdle into a direct lever for protocol growth and capital efficiency.
Fee abstraction is a growth engine. Protocols that pay for user gas, like Pimlico and Biconomy, reduce onboarding friction to zero. This converts user acquisition cost from a marketing line item into a programmable, on-chain incentive.
The wallet is the new business model. Traditional models monetize attention; ERC-4337 account abstraction monetizes transaction flow. The entity controlling the fee sponsor captures the user relationship and the associated data.
Sponsored transactions create sticky liquidity. A user funded by Circle's Gas Station for USDC swaps is a captive liquidity source. This shifts competition from features to capital efficiency and subsidy strategies.
Evidence: Starknet's fee abstraction drove a 900% increase in new accounts in one month. Polygon's adoption of native ERC-4337 support makes fee sponsorship a chain-level feature, not a dApp hack.
ACCOUNT ABSTRACTION & PAYMENT FLEXIBILITY
Fee Market Evolution: Ethereum vs. Solana
A technical comparison of how fee market design and account abstraction enable or constrain flexible transaction payment models.
| Core Feature / Metric | Ethereum (ERC-4337 / RIP-7560) | Solana (Native / Token-2022) | Emerging Standard (e.g., NEAR, Starknet) |
|---|---|---|---|
Native Fee Payment Token | ETH only | SOL only | Protocol token or stablecoin |
Sponsored Gas via Paymaster | |||
Gasless User Onboarding | |||
Batch Transaction Atomicity | UserOperation Bundles | Native compute units | Sequencer-level batching |
Fee Delegation to dApp | |||
Gas Fee Subsidization Model | Paymaster staking/whitelist | Not applicable | Relayer subsidies |
Avg. Time to Finality for AA Tx | 12-15 seconds | < 1 second | 2-5 seconds (varies) |
Key Abstraction (Social Recovery) | Smart Account required | Not natively supported | Native via contract accounts |
deep-dive
THE ARCHITECTURAL EDGE
Solana's Native Advantage: Speed Meets Abstraction
Solana's parallelized runtime and native fee markets create a uniquely efficient foundation for account abstraction and programmable transaction flows.
Parallel execution is foundational. Solana's Sealevel runtime processes thousands of independent transactions simultaneously. This eliminates the gas auction bottlenecks of sequential EVM chains, making sponsored transactions and complex intent settlement economically viable at scale.
Native fee markets enable abstraction. Solana's localized fee markets for compute and state allow protocols like Jupiter to pay user fees for specific actions. This is a cleaner model than Ethereum's global EIP-4337 bundler ecosystem, which adds latency and centralization risk.
The counter-intuitive insight is simplicity. Solana achieves advanced abstraction not by adding complexity, but by removing it. Features like pre-signed transactions and the compute_budget instruction are primitive building blocks. Protocols like Squads build multisig and programmable wallets directly on-chain without new standards.
Evidence: Jupiter's gasless swaps. Jupiter Exchange processes millions of gasless swap transactions monthly by sponsoring fees via its LFG Launchpad. This demonstrates the native fee sponsorship model operating at a scale and speed impossible on sequential blockchains.
protocol-spotlight
ACCOUNT ABSTRACTION & FEE MARKETS
Builder's Playbook: Who's Building This Future
The shift from rigid transaction models to flexible, user-centric intent systems is being driven by key infrastructure players.
01
ERC-4337: The Standard Play
The canonical standard for account abstraction, enabling smart contract wallets without core protocol changes. It's the foundational layer for all other innovation.
- Key Benefit: Permissionless Entry for wallet developers via a global mempool.
- Key Benefit: Paymaster abstraction enables gas sponsorship and fee payment in any token.
~10M
UserOps
0 ETH
Wallet Gas
02
The Paymaster Aggregator: Stackup & Pimlico
Infrastructure providers abstracting paymaster complexity. They offer reliable gas sponsorship and fee payment in stablecoins, handling exchange rate volatility and transaction bundling.
- Key Benefit: Guaranteed Execution with ERC-20 gas for mainstream users.
- Key Benefit: Developer SDKs that reduce integration time from weeks to hours.
>90%
Uptime SLA
-70%
Dev Time
03
The Intent-Centric Future: UniswapX & Across
Moving beyond simple transactions to declarative intents. Users specify what they want, solvers compete to fulfill it optimally.
- Key Benefit: MEV Protection via off-chain auction, returning value to users.
- Key Benefit: Cross-Chain Native execution, making bridges invisible.
$1B+
Volume
~30%
Better Price
04
The Bundler Market: Alchemy & Etherspot
The execution layer for ERC-4337. Bundlers package UserOperations, prioritize transactions, and manage mempool logic, creating a new fee market for user intent.
- Key Benefit: High Reliability with redundant node infrastructure.
- Key Benefit: Priority Queues for time-sensitive applications like gaming.
<500ms
Latency
99.9%
Success Rate
05
The Smart Wallet Vanguard: Safe & Argent
Productizing abstraction for end-users. These are not just multisigs but programmable smart accounts with social recovery, batch transactions, and delegated security.
- Key Benefit: Non-Custodial Security with user-friendly recovery options.
- Key Benefit: Session Keys enable seamless dApp interactions without constant signing.
$100B+
Assets Secured
1-Click
Recovery
06
The Abstraction Layer: Polygon & zkSync Era
L2s are baking native account abstraction into their protocols, offering gasless transactions and unified liquidity as a chain-level feature, not an add-on.
- Key Benefit: Protocol-Level Sponsorship via sequencer subsidies.
- Key Benefit: Native Batch Processing reduces overhead for bundlers and paymasters.
~0.001¢
Tx Cost
1 Sec
Finality
counter-argument
THE VULNERABILITIES
The Bear Case: Abstraction's Attack Vectors
Increased flexibility in fee payment and account logic introduces systemic risks and new centralization vectors.
Paymaster centralization creates censorship risk. A dominant paymaster like Pimlico or Stackup becomes a single point of failure. Protocols that outsource gas sponsorship for user onboarding grant these entities the power to filter or block transactions, replicating the Web2 gatekeeper problem within the permissionless stack.
Signature abstraction weakens security guarantees. Moving validation logic off-chain to ERC-4337 Bundlers or intent solvers like UniswapX trades deterministic on-chain security for probabilistic off-chain promises. This reintroduces trust assumptions the base layer was designed to eliminate, creating new attack surfaces for MEV extraction and transaction ordering.
Modular account logic increases audit surface. Every new validation function or session key added to a Smart Account from Safe or ZeroDev is a new bug waiting to be exploited. The composability of modules creates unpredictable state interactions that formal verification tools struggle to model, making comprehensive security audits practically impossible.
Evidence: The Ethereum Foundation's ERC-4337 audit identified multiple critical vulnerabilities in the initial bundler and paymaster specifications, demonstrating that the added complexity of the abstraction layer itself is a primary source of risk before any dApp logic is added.
takeaways
THE PAYMASTER PARADIGM SHIFT
TL;DR for Architects
Account abstraction is decoupling transaction sponsorship from token ownership, creating new vectors for UX and business models.
01
The Problem: Native Token Friction
Users must hold the chain's native token (e.g., ETH, MATIC) to pay gas, creating onboarding friction and fragmentation. This is the primary UX failure of EVM chains.
- Kills User Acquisition: DApp must educate users on buying gas tokens first.
- Limits Composability: Can't batch actions across chains without multiple token balances.
- Exposes to Volatility: User's operational capital is subject to gas token price swings.
~90%
Drop-off Rate
5+
Steps to Onboard
02
The Solution: ERC-4337 Paymasters
Smart contracts that sponsor gas fees on a user's behalf, enabling payment in any ERC-20 token, subscription credits, or via third-party relayers.
- Any-Token Payments: Pay fees in USDC, the DApp's token, or even off-chain credits.
- Sponsored Sessions: Apps can abstract gas entirely for users, akin to AWS free tiers.
- Atomic Bundles: Bundlers can include fee payment as part of the user operation, enabling intent-based flows like those in UniswapX and CowSwap.
$0
User Gas Cost
1-Click
Transaction
03
The Architecture: Session Keys & Gas Abstraction
Moving beyond single transactions to grant limited smart contract permissions for seamless, gasless interactions over a set period.
- Web2-Like UX: Users approve a 'session' for a game or DEX, enabling ~500ms actions without repeated signings.
- Granular Controls: Set spend limits, allowed contracts, and expiry times (e.g., 24 hours).
- Enterprise Onboarding: Companies can pre-fund paymaster contracts for employees, with detailed accounting.
24h
Session Life
1000x
TX Throughput
04
The Business Model: Subsidized On-Ramps
Paymasters invert the economic model: the entity that benefits from the transaction (DApp, protocol, advertiser) pays for the gas.
- Acquisition Cost: DApps treat gas as a ~$0.01-$0.10 CAC, cheaper than traditional ads.
- Stablecoin Dominance: Fees paid in USDC create a stable operational cost base.
- Protocol-Led Growth: L2s like Base and Optimism use sponsored transactions to bootstrap ecosystems, competing on developer UX.
-90%
CAC
$10B+
TVL Access
05
The Risk: Centralization & Censorship
Reliance on a few centralized bundler/paymaster services recreates the trusted intermediary problem AA aimed to solve.
- Bundler Monopolies: If Stackup or Alchemy dominate bundling, they gain transaction ordering power (MEV).
- Paymaster Blacklists: Sponsors can censor transactions based on destination (e.g., Tornado Cash).
- Smart Contract Risk: Paymasters are complex upgradeable contracts; a bug can drain the sponsorship pool.
>60%
Market Share Risk
Critical
Upgrade Risk
06
The Future: Intents & Cross-Chain Abstraction
AA is the prerequisite for a fully intent-centric architecture, where users declare outcomes ("swap X for Y") and a solver network handles execution across chains.
- Unified Liquidity: Solvers use Across, LayerZero, and DEXs to source the best rate, with gas abstracted.
- Wallet as OS: The wallet becomes a declarative interface, not a transaction signer.
- Universal Accounts: ERC-4337 accounts, managed by Safe, become the cross-chain identity layer, with gas paid from any asset on any chain.
10x
Efficiency Gain
Omnichain
Liquidity
ENQUIRY
Get In Touch
today.
Our experts will offer a free quote and a 30min call to discuss your project.
NDA Protected
Confidentiality24h Response
Time to ValueDirectly to Engineering Team
No Sales Fluff10+
Protocols Shipped
$20M+
TVL Overall