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the-creator-economy-web2-vs-web3
Blog

Why 'Gasless' Transactions Are a Misleading Promise for Creators

An analysis of why abstracting gas fees via paymasters and sponsorships creates a cost-shifting problem, not a solution, for sustainable creator monetization at scale.

introduction
THE REALITY CHECK

Introduction

The promise of 'gasless' transactions for creators is a marketing abstraction that obscures a more complex and costly infrastructure shift.

Gasless is an abstraction: No transaction executes without paying network fees. Protocols like ERC-4337 Account Abstraction and Biconomy don't eliminate gas; they abstract payment to a third-party paymaster or sponsor.

Costs shift, not vanish: The economic burden moves from the end-user to the application or a centralized relayer, creating new business model dependencies and potential centralization risks.

Evidence: The Polygon PoS chain processes millions of sponsored transactions monthly, but the gas is paid by dApp treasuries, creating a scalable user acquisition cost that must be monetized later.

thesis-statement
THE REALITY CHECK

The Core Argument: Cost-Shifting, Not Cost-Elimination

Gasless transactions are a UX abstraction that shifts, rather than eliminates, the fundamental cost of blockchain state transitions.

Gasless is a UX abstraction. The promise of 'gasless' transactions for creators is a marketing illusion. No protocol can eliminate the L1 settlement cost or the validator's computational work. The cost is merely shifted from the end-user to a sponsor, like a dApp treasury or a paymaster contract.

The cost-shifting mechanism is explicit. Protocols like ERC-4337 (Account Abstraction) and Solana's versioned transactions formalize this. A paymaster or a dApp's relayer pays the gas fee on behalf of the user, creating a business model liability that must be recouped through fees, token inflation, or venture capital subsidies.

Creators bear the ultimate cost. When a platform like Manifold or Zora offers 'gasless' mints, they are subsidizing the transaction. This cost is factored into their platform fees or tokenomics, creating a hidden tax on creator revenue that is less transparent than a direct gas payment.

Evidence: The paymaster subsidy model. On networks like Polygon, dApps using the Gas Station Network (GSN) pay for user gas from a pooled wallet. This creates a finite runway; when the wallet empties, the 'gasless' experience stops. The cost is not gone, it is prepaid and amortized.

REALITY CHECK

The Subsidy Math: Gas Costs at Scale

Comparing the true economic burden of transaction sponsorship models for creators and applications. 'Gasless' is a marketing term; someone always pays.

Cost DimensionUser-Paid (Status Quo)App-Subsidized (Common 'Gasless')Paymaster/AA Bundler (Emerging Model)

Direct Gas Cost Payer

End User

Application Treasury

Paymaster or Bundler

Typical User Cost Per Tx

$1.50 - $15.00

$0.00

$0.00

App Cost Per 1M Transactions

$0

$1.5M - $15M

$50k - $500k (estimated)

Requires User Native Token

Sybil/Spam Resistance

Native (user pays)

Weak (app pays)

Strong (session keys, proofs)

Protocol Examples

Uniswap V3, OpenSea

Early Polygon PoS dApps

Base's Onchain Summer, Biconomy, Pimlico

Scalability Ceiling

User wallet balance

Treasury runway

Capital efficiency of sponsor

Primary Risk

User abandonment

Treasury depletion

Sponsor centralization, MEV extraction

deep-dive
THE HIDDEN COST

The Slippery Slope of Sponsorship

Gas sponsorship shifts transaction costs from users to creators, creating unsustainable economic dependencies and hidden liabilities.

Gas sponsorship is a user acquisition cost that creators must treat as a marketing expense, not a permanent feature. Protocols like Pimlico's Account Abstraction and Biconomy sell this as a service, but the sponsor always pays the final gas bill.

The 'gasless' promise creates vendor lock-in. A creator's application becomes dependent on the sponsor's wallet infrastructure, whether it's a Safe{Wallet} or a custom ERC-4337 bundler. Migrating away requires forcing users to fund wallets.

Sponsorship liability is uncapped. A viral event or a gas spike on Ethereum L1 can bankrupt a sponsor's wallet. This is not hypothetical; Polygon's gas sponsorship programs have required strict limits to prevent this.

Evidence: The Arbitrum Odyssey event in 2022 congested the network and caused sponsor gas costs to soar, forcing a pause. It proved that scaling sponsorship requires scaling a treasury.

case-study
THE REAL COST OF 'FREE'

Case Studies in Subsidy Economics

Platforms promise gasless transactions to onboard creators, but the subsidy models reveal hidden costs and centralization risks.

01

The Problem: Subsidy is a Centralized Tax

Platforms like OpenSea or Zora absorb gas fees to offer 'free' mints, but this is a marketing cost, not a protocol feature. This creates a centralized point of failure and a hidden tax on all platform revenue to fund a temporary user acquisition strategy.

  • Vendor Lock-in: Creators are trapped on the subsidizing platform; moving their community elsewhere incurs real costs.
  • Opaque Pricing: The true cost of transactions is hidden, distorting economic signals for creators and collectors.
100%
Platform-Subsidized
Hidden Tax
Revenue Model
02

The Solution: Sponsor Transactions with ERC-4337

Smart accounts via ERC-4337 enable programmable sponsorship. A creator or dApp can pay for a user's gas via a Paymaster, but the logic is decentralized and transparent on-chain.

  • Portable Subsidy: A sponsor's rules travel with the user's smart account, reducing platform lock-in.
  • Sustainable Models: Subsidies can be capped, targeted (e.g., first-time minters), or funded by a community treasury, moving beyond blanket promises.
ERC-4337
Standard
Paymaster
Mechanism
03

The Problem: 'Gasless' Hides Real Network Costs

Promising 'zero gas' mis-educates creators about blockchain fundamentals. When Ethereum base fees spike or the subsidy ends, user experience collapses. This is a scalability and UX debt masquerading as a feature.

  • False Expectation: Users believe transactions are inherently free, blaming the protocol when subsidies are removed.
  • Economic Distortion: Artificially low costs encourage spam and inefficient network usage, harming all users.
Spikes
Fee Volatility
UX Debt
Hidden Cost
04

The Solution: Intent-Based Abstraction with UniswapX & CowSwap

Networks like UniswapX and CowSwap solve for the outcome, not the transaction. Users sign intents, and off-chain solvers compete to fulfill them optimally, potentially covering gas as part of a better route.

  • Cost Internalization: Gas becomes a variable for solvers to optimize, not a user-facing fee.
  • True Abstraction: The user experience is 'gasless' because the complexity of execution is delegated, not because a central entity wrote a check.
Intent-Based
Paradigm
Solver Network
Execution
05

The Problem: Subsidies Create Unsustainable Moats

VC-funded platforms use gas subsidies as a growth hack to build market share, not sustainable economies. This leads to a winner-takes-most dynamic where competition shifts to capital war chests, not superior product.

  • Barrier to Entry: New protocols cannot compete without raising millions to burn on fee absorption.
  • Ponzi Dynamics: Growth depends on perpetual new user subsidies, not organic utility.
VC Capital
Fuel
Weak Moat
Result
06

The Solution: Layer 2 Native Gas Economics

Networks like Arbitrum, Optimism, and Base offer inherently low fees (often <$0.01). Building here makes 'gasless' promises obsolete and aligns incentives with scalable, sustainable protocol design.

  • Real Low Cost: Fees are structurally low, removing the need for deceptive marketing.
  • Protocol-Level Innovation: Fee markets and sponsorship (e.g., Optimism's RetroPGF) can be baked into the chain's economics, not bolted on by an app.
<$0.01
Avg. Cost
L2 Native
Architecture
counter-argument
THE SPONSORED GAS FALLACY

Steelman: But What About...?

Gasless transactions shift, not eliminate, costs, creating new centralization vectors and hidden fees for creators.

Gasless is a misnomer. Every on-chain transaction consumes gas; 'gasless' systems like ERC-4337 Account Abstraction or Biconomy simply shift the payment burden to a third-party relayer or the dApp itself. The creator's platform now bears the operational cost and complexity of managing gas budgets and relay infrastructure.

This creates a new rent-seeker. The entity sponsoring the gas—be it a platform like OpenSea or a paymaster service—becomes a centralized gatekeeper. They control transaction ordering, can censor users, and will inevitably extract value via hidden fees or data monetization to offset their costs, mirroring Web2 ad-based models.

The UX trade-off is severe. To manage unpredictable gas costs, these systems introduce session keys or batched transactions, which increase smart contract risk and complexity. A creator's 'free' mint now depends on the sponsor's relayers being online and uncensored, a single point of failure.

Evidence: Platforms using Gelato Network or Stackup for gas sponsorship see 30-40% of gas costs eaten by relay fees and overhead. The final cost to the creator, either in direct fees or platform revenue share, is often higher than if they paid the base L2 gas fee themselves.

FREQUENTLY ASKED QUESTIONS

FAQ: Gasless Transactions & The Creator Economy

Common questions about why 'gasless' transactions are a misleading promise for creators.

No, gasless transactions are not free; the cost is simply abstracted and paid by a third party. A relayer like Biconomy or Gelato pays the gas fee, often recouping it through higher protocol fees, sponsored data, or by monetizing user activity. Creators ultimately pay through inflated platform costs or loss of data sovereignty.

future-outlook
THE REAL COST

The Path Forward: Honest Abstraction

The 'gasless' user experience is a subsidized illusion that shifts complexity and cost to application developers.

Gasless is a subsidy model. Protocols like Biconomy and Gelato abstract gas by having a relayer pay on the user's behalf. This creates a superior UX but shifts the economic burden to the dApp treasury, which must fund and manage the relayer infrastructure.

The cost doesn't vanish, it centralizes. This model creates new operational risks for creators, including managing private keys for relayers, monitoring gas price spikes, and ensuring perpetual funding. It's operational debt disguised as innovation.

Account abstraction (ERC-4337) changes the calculus. With native sponsored transactions, the protocol itself can securely define sponsorship rules via paymasters, reducing reliance on centralized relayers. This moves the cost from operational overhead to a clear protocol-level line item.

Evidence: The failure of dApps that offered 'free' transactions shows the model's fragility. When ETH gas prices spiked to 200+ gwei, their relayers drained funds in hours, forcing emergency shutdowns and breaking user trust.

takeaways
THE REALITY OF GAS

Key Takeaways

The promise of 'gasless' transactions is a marketing mirage; someone always pays, and creators are often the last to know.

01

The Problem: The 'Gasless' Illusion

Platforms like OpenSea and Zora advertise 'gasless' mints, but this is a UX abstraction, not a cost elimination. The platform's relayer pays the gas, creating a hidden liability and central point of failure.\n- Hidden Costs: Fees are baked into platform take-rates or passed to buyers.\n- Centralization Risk: The relayer can censor or front-run transactions.\n- Misaligned Incentives: Creators lose visibility into true on-chain costs.

0→$?
True Cost
1
Central Relayer
02

The Solution: Intent-Based Architectures

Protocols like UniswapX and Across solve for the intent (e.g., 'I want this NFT') not the transaction. A solver network competes to fulfill the intent at the best total cost, abstracting gas without hiding it.\n- Cost Discovery: Solvers absorb gas and compete on total price, creating a market.\n- Censorship Resistance: Decentralized solver networks prevent single-point failure.\n- Creator Transparency: The final, all-in fee is clear before commitment.

~20%
Better Pricing
Decentralized
Solver Network
03

The Reality: Paymasters & Account Abstraction

ERC-4337 and Biconomy's paymaster model enable true sponsorship, but the sponsor controls the economic model. This shifts the problem from 'who pays' to 'who decides the payment rules,' which can be gamed.\n- Sponsor Rules: The paymaster can set arbitrary logic for fee payment.\n- Vendor Lock-in: Creators become dependent on the sponsor's infrastructure.\n- Protocol-Level Rent: A new form of extractive fee becomes possible.

ERC-4337
Standard
Variable
Sponsor Tax
04

The Metric: Total Cost of Creation (TCC)

Creators must audit the Total Cost of Creation: minting gas + platform fee + any hidden relay/network costs. 'Gasless' often just migrates cost from one line item to another.\n- Audit Fees: Scrutinize the all-in fee, not the marketing claim.\n- Demand Pricing: High-demand mints cause relayers to raise fees or fail.\n- Long-Term Viability: A model where the platform pays is unsustainable at scale.

TCC > Gas
True Expense
$10M+
Daily Relay Volume
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Why 'Gasless' Transactions Are a Misleading Promise for Creators | ChainScore Blog