The Future of Gas Management: User Operations and Paymasters

Users must hold native tokens, estimate volatile gas prices, and approve every transaction. This creates a ~40% drop-off for new users. The solution is a Paymaster, a third-party contract that sponsors or subsidizes transaction fees.

• Key Benefit 1: Enables gasless onboarding and session keys.
• Key Benefit 2: Allows fee payment in any ERC-20 token (e.g., USDC).

Paymasters enable a new market structure where users express desired outcomes (intents), and solvers compete to fulfill them profitably, abstracting gas entirely. This mirrors the architecture of UniswapX and CowSwap.

• Key Benefit 1: Solvers absorb gas risk and optimize execution across chains.
• Key Benefit 2: Users get guaranteed, simplified pricing without managing gas.

In ERC-4337, Bundlers (like Pimlico, Stackup) are the actors who submit UserOperations to the chain. They choose which Paymaster-sponsored ops to include, creating a fee market for inclusion. This centralizes economic power.

• Key Benefit 1: Drives competition for optimal fee estimation and MEV capture.
• Key Benefit 2: Creates a new revenue stream for infrastructure providers.

Protocols like Base and Polygon use sponsored transactions for user acquisition. The future is Paymasters as a service (Pimlico, Biconomy), monetizing via subscription or a markup on gas, turning cost centers into profit centers.

• Key Benefit 1: Predictable operational costs for dApps.
• Key Benefit 2: Enables novel subscription-based web3 services.

Paymaster and Bundler operators can censor transactions by refusing to sponsor or bundle them. This recreates the validator-level censorship problem at the application layer, challenging decentralization promises.

• Key Benefit 1: Highlights need for decentralized bundler networks.
• Key Benefit 2: Drives innovation in permissionless relay systems.

Advanced Paymasters will use bridges like LayerZero and Across to pay for gas on chain B with assets from chain A, abstracting liquidity fragmentation. This is the final step towards a unified chain-agnostic user experience.

• Key Benefit 1: Eliminates the need for chain-specific gas tokens.
• Key Benefit 2: Unlocks seamless cross-chain intent execution.

Users must hold native tokens, approve transactions, and understand fluctuating gas fees. This creates massive onboarding friction and session abandonment.\n- ~40% of new users fail their first transaction due to gas.\n- Multi-chain complexity requires managing multiple native token balances.

Infrastructure like Stackup, Alchemy, and Biconomy operate generalized paymasters. They sponsor gas fees in exchange for ERC-20 tokens, enabling gasless transactions and 1-click onboarding.\n- Sponsorship Policies allow dApps to subsidize user sessions.\n- Batch Processing aggregates UserOps for ~30% lower effective gas costs.

Wallets like Safe{Wallet}, ZeroDev, and Rhinestone are competing to be the default smart account provider. They bundle Paymaster services, bundlers, and custom logic.\n- Session Keys enable permissioned auto-execution for gaming or trading.\n- Modular Security via ERC-6900 allows plug-in customization.

The convergence of intent-based architectures (UniswapX, CowSwap) with AA creates a fully declarative UX. Users state what they want, not how to do it.\n- Solver Networks compete to fulfill UserOps optimally.\n- Cross-Chain Paymasters like Across and LayerZero enable native gas payment on any chain.

Paymasters can refuse to sponsor transactions based on user, contract, or content, recreating the Web2 gatekeeper problem. This is a direct threat to credible neutrality.

• Risk: A dominant paymaster like Visa or Coinbase could blacklist sanctioned addresses or protocols.
• Mitigation: Requires a competitive, permissionless market of paymasters, similar to the MEV relay network.

Most paymaster models rely on unsustainable subsidies or speculative token incentives to bootstrap usage. When subsidies end, user experience breaks.

• Risk: A dApp's entire user base is locked out if its sponsored paymaster runs out of funds or changes policy.
• Example: A DeFi protocol using its token to pay gas could collapse if the token price crashes, stranding users.

Paymasters are complex smart contracts that validate arbitrary logic. A bug can lead to drained sponsor wallets or invalid transaction bundling.

• Risk: An exploit in a popular paymaster (e.g., Biconomy, Stackup) could drain millions in seconds, similar to bridge hacks.
• Attack Vector: Malicious UserOp that tricks the paymaster's validation logic into paying for an unauthorized operation.

Bundlers, who package UserOps, become the new block builders. They can extract maximum value by ordering, censoring, or inserting their own transactions.

• Risk: Users lose ERC-4337's gas savings to bundler MEV, similar to current EIP-1559 base fee dynamics.
• Outcome: The promise of predictable gas costs is undermined by a new, opaque auction layer.

Regulators may classify gas sponsorship as money transmission or a security, targeting entities that abstract gas fees.

• Risk: Paymasters and dApps offering "gasless" transactions face KYC/AML burdens, killing the model.
• Precedent: The Tornado Cash sanctions demonstrate regulatory willingness to target infrastructure.

If a paymaster's validation rules change or its service fails, pending UserOps can be permanently stuck in the mempool, requiring manual intervention.

• Risk: Users cannot cancel or replace a sponsored operation, leading to locked funds or failed DeFi positions.
• Systemic Issue: Highlights the brittle dependency between smart accounts and their off-chain service providers.