Off-Chain Relayers excel at transaction speed and user simplicity because they handle gas sponsorship and submission as a separate service layer. For example, Biconomy's infrastructure can process over 1,500 transactions per second (TPS) off-chain, allowing users to sign a single meta-transaction without ever holding native tokens for gas. This approach, used by dApps like Perpetual Protocol, creates a seamless, web2-like onboarding flow.
LABS
Comparisons
Off-Chain Relayers vs. On-Chain Paymaster Contracts
A technical analysis comparing two primary models for sponsoring user transaction fees: off-chain relayers and on-chain ERC-4337 paymasters. We evaluate architecture, trust, cost, and security for protocol architects.
Chainscore © 2026
introduction
THE ANALYSIS
Introduction: The Battle for User Experience
A technical breakdown of two dominant strategies for abstracting gas fees, a critical UX hurdle in blockchain adoption.
On-Chain Paymaster Contracts take a different approach by embedding sponsorship logic directly into smart contracts on the blockchain. This results in superior decentralization and security guarantees, as payment rules are transparent and enforceable by the network. Protocols like Stackup's Verifying Paymaster or native ERC-4337 Account Abstraction bundles ensure the sponsor's funds are only used for valid user operations, but this on-chain validation adds marginal latency and gas overhead per transaction.
The key trade-off: If your priority is maximum UX simplicity and high throughput for a known user base, choose an Off-Chain Relayer. If you prioritize censorship resistance, protocol-level composability, and building on decentralized standards like ERC-4337, choose an On-Chain Paymaster Contract. The former optimizes for acquisition; the latter for trust-minimized retention.
tldr-summary
Off-Chain Relayers vs. On-Chain Paymaster Contracts
TL;DR: Core Differentiators
Key strengths and trade-offs at a glance for managing gas sponsorship in account abstraction.
01
Off-Chain Relayer: Flexibility & Cost
No on-chain deployment cost: Relayers operate as independent services, avoiding the gas fees and storage costs of deploying a smart contract. This matters for rapid prototyping and projects with variable user volume.
Dynamic sponsorship logic: Can implement complex, real-time rules (e.g., user whitelists, API-based quotas) without incurring gas for logic execution. Essential for enterprise onboarding flows and promotional campaigns.
$0
Deployment Cost
Dynamic
Pricing Logic
02
Off-Chain Relayer: Centralization Risk
Single point of failure: The relayer service's uptime dictates user experience. If it goes down, sponsored transactions halt. This is a critical risk for mission-critical DeFi protocols.
Custodial dependency: Users must trust the relayer to submit their signed UserOperations. This introduces a trust assumption counter to decentralization principles, a significant concern for permissionless protocols.
03
On-Chain Paymaster: Trust Minimization
Verifiable, immutable rules: Sponsorship logic is deployed as a smart contract (e.g., an ERC-4337 Paymaster). Users and dApps can audit its behavior, ensuring predictable and non-custodial operation. Critical for decentralized applications requiring maximal security.
Network resilience: As long as the underlying blockchain is live, the paymaster is accessible. Eliminates dependency on external service availability, vital for non-custodial wallets and long-lived smart accounts.
Immutable
Contract Logic
04
On-Chain Paymaster: Overhead & Complexity
High upfront gas cost: Deploying and maintaining a paymaster contract requires significant gas (often $500+). This creates a barrier for early-stage projects.
Gas overhead per operation: Every sponsorship requires a validatePaymasterUserOp call, adding ~20-40k gas per transaction. This adds up for high-frequency applications like gaming or per-action micro-transactions.
Static logic updates: Changing sponsorship rules requires a contract migration or complex proxy pattern, slowing iteration for rapidly evolving product features.
20-40k gas
Per-Op Overhead
OFF-CHAIN RELAYERS VS. ON-CHAIN PAYMASTER CONTRACTS
Head-to-Head Feature Comparison
Direct comparison of key architectural and operational metrics for gas sponsorship solutions.
| Metric | Off-Chain Relayers | On-Chain Paymaster Contracts |
|---|---|---|
Gas Abstraction for User | ||
User Transaction Cost | $0.00 | $0.00 |
Sponsor On-Chain Gas Deposit | ||
Requires Off-Chain Infrastructure | ||
Native Account Abstraction Support | ||
Max Theoretical TPS | Limited by relayer infra | Limited by underlying L1/L2 |
Protocol Examples | Gelato Relay, OpenZeppelin Defender | ERC-4337 Bundlers, Pimlico, Alchemy |
pros-cons-a
ARCHITECTURE COMPARISON
Off-Chain Relayers vs. On-Chain Paymaster Contracts
Key strengths and trade-offs for gas sponsorship and transaction abstraction at a glance.
01
Off-Chain Relayer: Key Strength
Unlimited Gas Sponsorship Logic: Relayers (like Biconomy, Stackup, Pimlico) can implement complex, stateful rules off-chain. This enables session keys, subscription models, and fraud detection without bloating L1/L2 state. This is critical for mass-market dApps (e.g., gaming, social) requiring flexible user onboarding.
0 gas
Sponsor Logic Cost
02
Off-Chain Relayer: Key Weakness
Centralization & Censorship Risk: Users must trust the relayer's infrastructure and honesty. A malicious or offline relayer can block transactions. This introduces a single point of failure, conflicting with decentralization principles. Not ideal for high-value DeFi transactions or protocols prioritizing maximal censorship resistance.
03
On-Chain Paymaster: Key Strength
Trustless & Verifiable Execution: Contracts (like those using ERC-4337's Paymaster) have logic enforced on-chain. Users and dApps can cryptographically verify sponsorship rules. This is essential for permissionless protocols and public goods where auditability and anti-censorship are non-negotiable.
100%
On-Chain Verifiability
04
On-Chain Paymaster: Key Weakness
High Cost & Limited Logic: Every sponsorship rule (e.g., "pay for NFTs under $100") requires gas-intensive on-chain computation and storage. This leads to high operational costs and scalability limits. Poor fit for high-volume, low-margin applications or those needing dynamic, real-time policy updates.
$0.05+
Avg. Rule Eval Cost
pros-cons-b
OFF-CHAIN RELAYERS VS. ON-CHAIN PAYMASTERS
On-Chain Paymaster Contracts: Pros and Cons
Key architectural trade-offs for managing gas sponsorship, from user experience to protocol security.
01
Off-Chain Relayers: Superior UX & Flexibility
Decoupled gas logic: Relayers handle fee payment and transaction bundling off-chain, enabling complex sponsorship rules without bloating L1 contracts. This matters for dApp onboarding where you need to support multi-token payments (like USDC gas) or social recovery without exposing users to native token complexity. Used by Biconomy and Gelato for seamless meta-transactions.
< 1 sec
Typical relay latency
ERC-2771
Trusted Forwarder Standard
02
Off-Chain Relayers: Centralization & Censorship Risks
Trusted third-party: Users must trust the relayer's infrastructure to submit their transactions, creating a single point of failure and potential censorship vector. This matters for permissionless protocols or high-value DeFi where transaction guarantee and neutrality are critical. Relayer downtime or malicious filtering can halt an entire dApp's operations.
03
On-Chain Paymasters: Trustless & Verifiable
Smart contract enforcement: Sponsorship logic (e.g., whitelists, token swaps) is executed on-chain via contracts like Ethereum's EntryPoint. This matters for protocols requiring maximal decentralization, as users can cryptographically verify sponsorship rules. Account Abstraction (ERC-4337) native paymasters enable non-custodial, atomic gas payments in any ERC-20 token.
ERC-4337
Native Standard
04
On-Chain Paymasters: Cost & Complexity Overhead
Higher gas footprint: Every sponsorship validation adds calldata and execution costs to the user's transaction, making micro-transactions economically unviable. This matters for high-frequency applications like gaming or micro-payments. Managing paymaster contract security (audits, upgrades) also adds significant devops overhead compared to using a managed relayer service.
OFF-CHAIN RELAYERS VS. ON-CHAIN PAYMASTER CONTRACTS
Technical Deep Dive: Architecture and Flow
This section dissects the core architectural differences between off-chain relayers and on-chain paymaster contracts, the two primary models for sponsoring user transactions in Account Abstraction (ERC-4337) and similar systems. We compare their performance, security, and operational trade-offs using concrete data and protocol examples.
Off-chain relayers are significantly faster for end-user transaction submission. They allow users to sign and submit a UserOperation to a relayer network (like Stackup, Biconomy, or Pimlico) instantly, without waiting for an on-chain transaction to pay gas. The relayer handles the on-chain submission and fee payment asynchronously. In contrast, an on-chain paymaster requires the user's wallet to first interact with the paymaster contract to secure a gas sponsorship, adding an extra on-chain step and block confirmation time before the main transaction can be executed.
CHOOSE YOUR PRIORITY
Decision Framework: When to Use Which Model
Off-Chain Relayers for Cost & UX
Verdict: The clear winner for user onboarding and predictable costs. Strengths:
- Zero Gas for Users: Users sign meta-transactions, eliminating the need for native tokens (e.g., ETH on Ethereum). This is critical for mass adoption in consumer apps.
- Predictable Sponsorship: The relayer (e.g., Biconomy, OpenZeppelin Defender) pays gas and can implement fixed-rate billing or subscription models for dApps.
- Flexible Logic: Sponsorship rules (who pays, for which calls) are managed off-chain, allowing for complex, non-deterministic logic without on-chain overhead. Best For: Social apps, freemium models, and any application where user acquisition cost is a primary metric.
On-Chain Paymaster Contracts for Cost & UX
Verdict: Provides programmable sponsorship with stronger guarantees, but adds complexity. Strengths:
- Transparent & Verifiable Rules: Sponsorship logic (like "pay for swaps over $100") is on-chain and immutable, building user trust. Used by protocols like Ethereum's ERC-4337 standard.
- Native Protocol Integration: Can hold funds and interact directly with DeFi pools for gas payment, enabling novel models.
Trade-off: Users may still need gas for the initial
validatePaymasterUserOp, and sponsorship logic incurs its own gas costs.
verdict
THE ANALYSIS
Final Verdict and Strategic Recommendation
Choosing between off-chain relayers and on-chain paymasters is a strategic decision between operational control and protocol-native security.
Off-Chain Relayers (e.g., Biconomy, Stackup, Pimlico) excel at user experience and cost efficiency by abstracting gas fees and sponsoring transactions from centralized infrastructure. This model enables sub-second transaction latency and predictable, often subsidized, costs for end-users, making it ideal for mainstream dApps. For example, a dApp using Biconomy can offer gasless transactions, reducing sign-up friction and boosting user acquisition metrics significantly.
On-Chain Paymaster Contracts (e.g., native ERC-4337 Paymaster contracts, Etherspot's Skandha) take a different approach by enforcing sponsorship logic directly in smart contracts. This results in superior decentralization and censorship resistance, as the sponsorship rules are transparent and immutable on-chain. The trade-off is higher gas overhead per transaction and more complex initial setup, as seen in the ~42k additional gas required for a basic ERC-4337 user operation versus a relayed meta-transaction.
The key trade-off is control versus trust minimization. If your priority is scaling user onboarding, managing complex subsidy logic, or integrating with multiple L2s seamlessly, choose an Off-Chain Relayer. Their infrastructure handles gas price volatility and provides critical tools like bundlers and user operation mempools. If you prioritize maximum security, protocol-native composability, or building a permissionless system where anyone can be a paymaster, choose an On-Chain Paymaster Contract. This is the strategic choice for protocols where the sponsorship logic itself is a core innovation.
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