Token incentives are broken. Protocol treasuries bleed value to mercenary capital, subsidizing activity that vanishes when rewards stop. This is a subsidy trap, not a sustainable business model.
wallet-wars-smart-accounts-vs-embedded-wallets
Blog
The Future of Crypto Unit Economics: From Tokens to Gas Vouchers
Protocols are moving beyond speculative token drops. The new playbook: issuing targeted gas credits to directly subsidize and measure on-chain engagement. This is the core of the next wallet war.
introduction
THE SHIFT
Introduction
Crypto's economic model is evolving from speculative token emissions to a utility-driven system anchored in transaction execution.
The new unit is gas. Value accrual will shift to the base layer of execution—the actual gas spent. Protocols like EigenLayer and Ethereum's PBS are already re-architecting fee markets to capture this.
Gas becomes a voucher. Future applications will abstract gas into a portable cost layer, where users pay with sponsored transactions or bundled vouchers, separating usage from native token volatility.
Evidence: Arbitrum's sequencer captures 100% of L2 gas fees in ETH, demonstrating the shift of value to the execution layer, not a governance token.
thesis-statement
THE UNIT ECONOMICS SHIFT
The Core Thesis
The future of crypto monetization shifts from speculative token emissions to direct, utility-based fee capture via gas vouchers.
Token emissions are broken. They create unsustainable sell pressure and misalign incentives, as seen in the death spiral of many DeFi 2.0 protocols. The new model monetizes the infrastructure layer directly.
Gas is the ultimate utility. Every transaction requires it, making it a non-speculative, demand-capturing asset. Protocols like EigenLayer and AltLayer are already abstracting this into restaking and rollup-as-a-service models.
Gas vouchers become the product. Projects will issue vouchers—pre-paid, discounted gas credits—instead of governance tokens. This turns user acquisition costs into predictable, redeemable revenue, mirroring Amazon Web Services credits for blockchains.
Evidence: Arbitrum sequencer fees now exceed $30M monthly, proving direct fee capture outpaces token incentives for sustainable protocol revenue.
key-trends
FROM TOKENS TO GAS VOUCHERS
Key Trends Driving the Shift
The unsustainable economics of pure speculation are giving way to utility-driven models where tokens function as operational fuel.
01
The Problem: Speculative Assets with No Sink
Most tokens are perpetual inflation machines with no inherent burn mechanism, leading to constant sell pressure from validators and treasury unlocks.
- Result: Token price is decoupled from network usage.
- Example: Layer 1 tokens used solely for staking, not transactions.
>90%
Sell-Off Rate
$0
Tx Fee Burn
02
The Solution: Gas Vouchers as a Demand Sink
Protocols like EigenLayer and Celestia use their native token to pay for core services (DA, security), creating a mandatory, recurring burn.
- Mechanism: Users pay fees in ETH/USDC, protocol buys & burns native token.
- Impact: Token demand scales directly with network utility, not speculation.
1:1
Demand Coupling
Deflationary
New Baseline
03
The Enabler: Intent-Based Abstraction
Systems like UniswapX, CowSwap, and Across abstract gas complexity, allowing users to pay in any token. The solver network handles gas, creating a natural market for gas vouchers.
- Shift: User doesn't need ETH; protocol manages gas optimization.
- Result: Voucher tokens become a wholesale commodity for solvers.
100%
Gas Abstracted
Solvers
Primary Buyers
04
The Catalyst: Modular Stack Commoditization
With modular chains (via Celestia, EigenDA) and shared sequencers (like Espresso, Astria), execution is a commodity. The competitive edge shifts to economic security and fee markets.
- New Battlefield: Which chain offers the cheapest, most reliable gas vouchers?
- Outcome: Tokens must be engineered for high-velocity, low-margin utility.
Commodity
Execution Layer
Economic
MoAT
05
The Risk: Centralized Fee Markets
If a single entity (e.g., a dominant rollup sequencer or solver) controls the voucher purchase mechanism, they become a centralized price oracle and potential censor.
- Vulnerability: Extractive MEV and transaction filtering.
- Mitigation: Requires decentralized validator sets and open auction designs.
Single Point
Of Failure
Critical
Design Flaw
06
The Endgame: Token-as-a-Utility
The future token is a consumable, not a security. Its value is derived from the cost of the service it provisions, similar to AWS credits or cloud compute units.
- Valuation Model: Network Revenue / Token Burn Rate.
- Examples: EigenLayer's restaking fees, Celestia's blob space purchases.
Utility
Primary Driver
Cash Flow
Valuation
CAPITAL EFFICIENCY
Airdrop vs. Gas Voucher: Unit Economics Comparison
A direct comparison of the capital allocation, user acquisition cost, and long-term value accrual between traditional token airdrops and gas voucher subsidies.
| Key Metric | Traditional Airdrop (e.g., Uniswap, Arbitrum) | Gas Voucher (e.g., zkSync, Starknet) | Hybrid Model (e.g., Blast, LayerZero) |
|---|---|---|---|
Primary Goal | Retroactive reward & decentralization | Onboard users & subsidize activity | Bootstrap liquidity & subsidize activity |
User Acquisition Cost (CAC) | $100 - $500+ per claimed wallet | $5 - $20 per active transaction | $50 - $150 per bridged/locked asset |
Capital Efficiency (Value Retained On-Chain) | 5-15% (high sell pressure) | 70-90% (value burned as gas) | 40-60% (split between gas & lockup) |
Immediate Protocol Revenue Impact | None (pure outflow) | Positive (vouchers subsidize paid tx fees) | Neutral/Negative (subsidy with future lockup) |
User Loyalty & Retention | Low (farm-and-dump behavior) | High (utility-driven engagement) | Medium (contingent on future airdrop) |
Sybil Attack Resistance | Low (retroactive, easy to game) | High (requires on-chain activity cost) | Medium (requires capital lockup) |
TVL/Activity Multiplier | 1x (one-time event) | 3-5x (sustained subsidized usage) | 10-50x (capital lockup requirement) |
Example Entity | Arbitrum, Uniswap, Celestia | zkSync Era, Starknet, Scroll | Blast, LayerZero, EigenLayer |
deep-dive
THE ABSTRACTED GAS LAYER
The Mechanics of Sponsored Transactions
Sponsored transactions separate the payer of gas fees from the transaction initiator, creating a new business model for user onboarding and service monetization.
Gas sponsorship is a subsidy. It allows dApps or wallets to pay for a user's transaction fees, removing the primary UX hurdle of requiring native tokens. This creates a pay-to-acquire-user model where protocols subsidize onboarding costs.
ERC-4337 enables this natively. The Account Abstraction standard's Paymaster contract is the core primitive for sponsorship. It validates logic and can pay fees in any ERC-20 token, which a relayer then converts to ETH for the base layer.
The business logic is off-chain. Services like Biconomy and Stackup operate relay networks that batch sponsored transactions, negotiating fee markets and managing Paymaster liquidity. This creates a competitive relayer market for efficient execution.
Evidence: After implementing gas sponsorship, dApps like Friend.tech and Base's Onchain Summer saw user activity spikes exceeding 300%, demonstrating that removing the gas friction directly drives adoption.
protocol-spotlight
THE FUTURE OF UNIT ECONOMICS
Protocol Spotlight: Early Adopters
These protocols are pioneering the shift from speculative token models to utility-driven fee abstraction and gas monetization.
01
Ethereum's ERC-4337: Killing the Native Token
The Problem: Users need ETH for gas, creating friction and limiting dApp adoption. The Solution: Account Abstraction enables sponsorship via ERC-20 tokens or credit cards. Projects like Stackup and Biconomy are building paymasters that abstract gas entirely.
- User Acquisition: DApps can subsidize onboarding, absorbing ~$0.01-$0.10 in gas costs per user.
- New Revenue: Paymasters can monetize by taking a small spread on gas market arbitrage.
~5M
AA Wallets
-100%
User Gas Cost
02
Solana's Priority Fees: The Liquid Gas Market
The Problem: Fixed, volatile base fees create poor UX and inefficient block space allocation. The Solution: A dynamic auction for priority. Users attach tips (in SOL) to jump the queue. This creates a transparent, liquid market for block space.
- Validator Revenue: Fees shift from pure inflation to user-paid priority, a $50M+ annual market.
- Predictability: DApps can programmatically budget for execution costs, enabling new business models.
~$1.5M
Daily Fees
<400ms
Finality
03
Arbitrum's Stylus: Compute as a Profit Center
The Problem: L2s compete on cheap gas, racing to zero and sacrificing revenue. The Solution: Stylus introduces WASM-based smart contracts. L2s can charge premium fees for high-performance compute (e.g., AI inference, gaming logic) while keeping EVM gas cheap.
- Revenue Diversification: Layer 2s move from thin gas margins to high-margin SaaS-like pricing for compute.
- Developer Capture: Attracts performance-sensitive devs from Web2, creating a new ~$100M+ market segment.
10-100x
Faster Compute
New Rev Stream
For L2s
04
Celestia's Data Availability: The Modular Fee Switch
The Problem: Monolithic chains bundle execution, settlement, and data, creating bloated, expensive blocks. The Solution: Modular architecture separates data availability (DA). Rollups pay Celestia (in TIA or other tokens) for cheap, secure data publishing, turning DA into a pure utility service.
- Cost Structure: Reduces rollup operating costs by ~99% versus posting to Ethereum.
- Token Utility: TIA stakers secure the network and earn fees from a $1B+ rollup data market.
~$0.001
Per KB Cost
$1B+
DA Market
05
Across Protocol: Intent-Based Gas Arbitrage
The Problem: Bridging assets is slow, expensive, and requires manual gas management across chains. The Solution: Intent-based architecture. Users sign a message declaring desired outcome (e.g., "ETH on Arbitrum"). A solver network competes to fulfill it, abstracting away gas payments on the destination chain.
- User Experience: Zero-destination-gas transactions. Users never need the native token of the target chain.
- Solver Economics: Solvers profit from cross-chain MEV and gas arbitrage opportunities, creating a $10M+ monthly market.
$2B+
Volume
~2 min
Avg. Time
06
Berachain: Liquidity-Backed Gas & DeFi Flywheel
The Problem: Gas tokens are non-productive assets, creating dead capital and misaligned incentives. The Solution: Proof-of-Liquidity. Validators are selected based on provided liquidity, not stake. The native gas token (BERA) is backed by productive DeFi assets, and fees are redistributed to liquidity providers.
- Capital Efficiency: Gas becomes a yield-bearing asset, eliminating opportunity cost for holders.
- Protocol Capture: Aligns validators with ecosystem growth, creating a sustainable DeFi-native economic engine.
Yield-Bearing
Gas Token
> $500M
Testnet TVL
counter-argument
THE REGULATORY AND ECONOMIC TRAP
The Bear Case: Why This Could Fail
The shift to gas vouchers creates new regulatory attack vectors and fails to solve the fundamental problem of protocol sustainability.
Gas vouchers are securities. The SEC's Howey Test scrutiny of staking-as-a-service models will extend to any tokenized discount that promises future utility from a third party's effort. Projects like EigenLayer and Ethereum restaking already navigate this minefield; a voucher explicitly tied to subsidized execution is a clearer target.
Vouchers externalize protocol costs. This model replicates the Web2 freemium trap where user acquisition burns venture capital instead of building sustainable unit economics. Protocols like Avalanche and Polygon have already subsidized gas to drive growth, creating a subsidy cliff that collapses activity when removed.
The abstraction creates systemic risk. Decoupling payment from execution, as seen in ERC-4337 account abstraction, introduces new MEV vectors and complicates transaction prioritization. Networks need predictable fee markets; voucher systems add a layer of indirection that validators and sequencers will arbitrage.
Evidence: The failure of MetaMask's transaction fee sponsorship to gain traction demonstrates that users prefer predictable, transparent costs over abstracted subsidies that obscure true economic alignment.
risk-analysis
THE FUTURE OF CRYPTO UNIT ECONOMICS
Critical Risks for Builders
The shift from speculative tokens to utility-driven gas abstraction is redefining value capture and user experience, creating new attack vectors and business model risks.
01
The MEV-Capturing Voucher
Gas vouchers funded by MEV create a dangerous dependency. Protocols like UniswapX and CowSwap use this model, but it centralizes revenue to a few searchers/validators.\n- Risk: Your protocol's UX is hostage to volatile, opaque MEV markets.\n- Exposure: A drop in on-chain arbitrage opportunities can collapse your free-gas model overnight.
>60%
of DEX Volume
Volatile
Revenue Stream
02
Liquidity Fragmentation Death Spiral
Paymasters and gas sponsorship fragment liquidity into walled gardens. Users stick to chains/apps where their gas is paid, killing composability.\n- Risk: Your dApp becomes a silo, unable to leverage the broader DeFi ecosystem.\n- Result: Innovation shifts from open protocols to closed, subsidized platforms, repeating Web2 mistakes.
Multi-Chain
Complexity
Siloed
Liquidity
03
Validator/Paymaster Cartels
Entities that control gas payment (e.g., EigenLayer AVS operators, LayerZero Relayers, Across relayers) become critical centralized chokepoints.\n- Risk: A cartel can censor transactions or impose rent-seeking fees, negating decentralization promises.\n- Attack Surface: A compromise of a major paymaster can disable thousands of dependent smart accounts in one blow.
Single Point
of Failure
Censorship
Vector
04
The Subsidy Cliff Edge
User acquisition fueled by temporary gas subsidies is unsustainable. When subsidies end, user retention plummets as real costs become apparent.\n- Risk: You build on a user base with zero price sensitivity, which evaporates.\n- Data: Legacy Web2 shows >80% user drop-off post-free-trial. Crypto will be worse.
>80%
Churn Risk
Unsustainable
CAC
05
Regulatory Attack on 'Free' Transactions
Regulators view gas sponsorship as a securities-like incentive or money transmission. The SEC's stance on 'free' stock trading is a direct precedent.\n- Risk: Your core growth mechanic becomes illegal, forcing a costly pivot.\n- Target: Paymaster services and the protocols that rely on them face existential legal scrutiny.
High
Legal Overhead
Existential
Risk
06
Oracle Manipulation for Gas Pricing
Gas vouchers priced in volatile assets require real-time oracles. Attackers can manipulate prices (e.g., Chainlink feeds) to drain voucher reserves or disable systems.\n- Risk: A core infrastructure dependency becomes your smart account's most vulnerable component.\n- Scale: A single exploited oracle could compromise $100M+ in voucher funds across multiple protocols.
$100M+
Exposure
Critical
Dependency
future-outlook
THE UNIT ECONOMICS
Future Outlook: The Wallet Wars Escalate
The battle for user acquisition will shift from token airdrops to subsidizing core network costs, fundamentally altering wallet and chain monetization.
Gas abstraction becomes the acquisition channel. Wallets like Coinbase Wallet and Rainbow will compete by paying user gas fees on high-cost chains like Ethereum Mainnet. This subsidization is a more defensible moat than a token airdrop, directly lowering the primary barrier to on-chain activity.
Voucher systems replace simple fee sponsorship. Primitive solutions like Pimlico's Paymaster will evolve into gas voucher markets. Protocols like Uniswap or Aave will purchase bulk vouchers from chains like Arbitrum or zkSync to sponsor specific user actions, creating a new B2B2C revenue stream for L2s.
Wallet tokens pivot to utility. The wallet token model shifts from governance to becoming the settlement asset for these voucher systems. Holding a wallet's token grants access to discounted or prioritized fee markets, creating a circular economy that locks in users.
Evidence: Solana's transaction fee is ~$0.00025. If a wallet subsidizes 1 million user transactions, the cost is $250. This is cheaper and more targeted than a $10M token airdrop with no retention mechanism.
takeaways
THE FUTURE OF UNIT ECONOMICS
TL;DR for Busy CTOs
The current token-centric model is breaking. The next wave is about abstracting cost and complexity, turning gas into a subsidized utility.
01
The Problem: Gas Fees Are a UX Kill Switch
Every transaction requiring native tokens and wallet approvals is a conversion funnel drop. ~40% of new users abandon due to gas complexity. This stifles adoption and locks protocols to a single chain's liquidity.
- Kills Mass Adoption: Non-crypto users don't understand gas.
- Fragments Liquidity: Users won't bridge just to try your dApp.
- Hinders Composability: Multi-step DeFi flows become user-hostile.
~40%
User Drop-off
10+
Clicks per Tx
02
The Solution: Intent-Based Abstraction & Gas Vouchers
Let users specify what they want, not how to do it. Protocols like UniswapX, CowSwap, and Across handle routing, bridging, and gas payment. The end-user pays in the input asset.
- Sponsor Pays: Apps subsidize gas via ERC-4337 Paymasters or similar.
- Cross-Chain Native: Solve for the destination chain's fees, not the source.
- Competitive Sourcing: Solvers compete on execution, driving down effective cost.
-99%
User Friction
$1B+
Volume (UniswapX)
03
The New Business Model: Selling Compute, Not Tokens
Infrastructure becomes a B2B utility. Ethereum L2s, Solana, and Avalanche compete on cost-per-CPU-cycle. Protocols buy gas vouchers in bulk and bake the cost into service fees.
- Predictable OPEX: Apps budget for gas as a cloud compute cost.
- Token Utility Shift: Native tokens secure the chain; usage is decoupled.
- Enterprise Onboarding: Enables SaaS-like pricing models for blockchain services.
<$0.01
Target Cost/Tx
B2B
Primary Market
04
The Risk: Centralization of Payment Rails
Gas sponsorship concentrates power. Whoever controls the Paymaster or voucher system can censor transactions or extract rent. Vitalik's 'Protocol vs. App' dilemma becomes critical.
- Censorship Vectors: Sponsors can blacklist addresses or dApps.
- Oligopoly Risk: A few solvers (e.g., Across, LayerZero) dominate cross-chain flow.
- Regulatory Attack Surface: Fiat on-ramps for vouchers invite KYC/AML scrutiny.
3-5
Dominant Solvers
High
SysAdmin Risk
05
The Metric: Effective Cost Per Active User (eCPU)
Forget TVL. The new KPI is the fully-loaded cost to acquire and service one active user, inclusive of all subsidized gas, bridging, and solver fees. This aligns with traditional SaaS metrics.
- Lifetime Value (LTV) > eCPU: The fundamental unit economics rule.
- Enables Scaling: Predictable costs allow for aggressive growth spending.
- Benchmarking: Compare Ethereum L2 vs. Solana vs. Monad on hard numbers.
eCPU
New North Star
LTV > eCPU
Rule #1
06
The Endgame: Invisible Infrastructure
Successful blockchain apps won't feel like blockchain apps. Gas, wallets, and bridging disappear. The tech stack looks like AWS + Stripe, not MetaMask + Etherscan. This is the only path to a billion users.
- Abstraction Stack Wins: ERC-4337, Particle Network, Privy.
- User Doesn't Know: They use an app, not 'a dApp on an L2'.
- Value Accrual Shifts: To the application layer and the underlying compute providers.
1B+
User Target
0
Gas Knowledge Req'd
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