Fee Delegation

Fee delegation separates the signer of a transaction from the fee payer. The user signs the core transaction data, while a separate fee payer (like a dApp or service) signs a fee delegation meta-transaction that covers the gas costs. This is often implemented via smart contract account abstractions or protocol-level extensions like EIP-4337 (Account Abstraction) or EIP-3074 (Sponsored Transactions).

A primary use case is removing the friction of acquiring native tokens (like ETH) for new users. A dApp can sponsor a user's first transactions, allowing them to interact with the application immediately. This enables:

• Gasless transactions for end-users.
• Seamless onboarding from Web2, where users don't need to understand gas or wallets.
• Broader adoption by abstracting away blockchain complexity.

Several major protocols and standards have implemented fee delegation:

• EIP-4337 (Account Abstraction): Uses Paymasters to sponsor gas for User Operations.
• EIP-3074: Allows externally owned accounts (EOAs) to delegate sponsorship via AUTH and AUTHCALL opcodes.
• Polygon's Gas Station Network (GSN): A decentralized relay network that pays gas for user transactions.
• Biconomy & Stackup: Infrastructure providers offering paymaster services for dApps.

Fee delegation introduces risks like transaction spam and economic attacks on the sponsor. Protocols implement safeguards:

• Whitelists: Sponsors only pay for specific users or actions.
• Rate Limiting & Budget Caps: Limits on gas or transaction volume per user.
• Reputation Systems: To identify and block malicious actors.
• Signature Replay Protection: Ensuring delegated fee messages are unique and non-replayable.

Fee delegation enables novel economic models where the cost of interaction is baked into a service. Examples include:

• Freemium Models: A game pays gas for basic actions; premium features require user payment.
• Promotional Campaigns: A protocol sponsors gas for users trying a new feature.
• Enterprise SaaS: Companies pay for their employees' blockchain interactions as an operational cost.
• Relayer Networks: Decentralized networks compete to bundle and sponsor transactions for a fee.

While powerful, fee delegation adds complexity:

• Sponsor Liquidity: The payer must hold sufficient native tokens, creating treasury management overhead.
• Wallet Support: Requires integration from wallet providers to support signing meta-transactions.
• Network Effects: Value increases as more dApps and wallets adopt compatible standards (like ERC-4337).
• Cross-Chain Complexity: Sponsoring fees across multiple blockchains requires bridging solutions and multi-chain paymasters.

A primary use case is removing the cryptocurrency barrier for new users. A dApp can pay the gas fees for a user's first transactions, allowing them to interact with smart contracts without first acquiring the native token (e.g., ETH, MATIC). This is critical for mass adoption, as seen in:

• Gaming platforms sponsoring initial NFT mints.
• Social media dApps covering profile creation fees.
• DeFi protocols paying for a user's first swap or deposit.

Businesses use fee delegation to manage operational costs and streamline workflows. A company can deploy a relayer service or use a paymaster contract to pay for all employee transactions, simplifying accounting and user experience. Common implementations include:

• Corporate treasuries paying for bulk token distributions or payroll.
• Supply chain platforms where the operator pays for all verification and tracking transactions.
• SaaS models where service fees are bundled, eliminating separate gas payments for customers.

Many scaling solutions have native fee delegation features to enhance developer experience.

• Polygon (Now Polygon PoS): Offers Gas Station Network (GSN) support, allowing dApps to relay meta-transactions.
• BNB Smart Chain: Supports eth_call-based sponsored transactions for read-like operations with fee delegation.
• Starknet & zkSync Era: Have native account abstraction where fee payment logic is decoupled, allowing any contract to act as a payer. These systems reduce friction for complex DeFi and gaming applications.

Fee delegation enables more secure and flexible authentication patterns. By separating the signer from the fee payer, systems can implement:

• Session Keys: A user signs a meta-transaction granting a temporary key (e.g., for a game) the right to submit transactions, with fees paid by a central service.
• Multi-Party Authorization: A transaction requires signatures from multiple parties, but only one designated payer covers the gas.
• Recovery Operations: A wallet recovery service can pay the gas for a social recovery or guardian transaction, ensuring users can reclaim access even with zero balance.

A broader design pattern where the complexities of paying for gas fees are hidden from the end user. Fee delegation is a specific implementation of this pattern. Key approaches include:

• Sponsored Transactions: A third party (sponsor) pays the fees.
• Paymasters: Smart contracts that can pay fees on a user's behalf, often using alternative tokens.
• Account Abstraction (ERC-4337): Allows smart contract wallets to implement custom logic for fee payment, enabling delegation and more.

A precursor to modern fee delegation, a meta-transaction is a signed message (not a standard on-chain transaction) that is relayed by a separate party who pays the gas. The core components are:

• User Signature: The user signs the intent of the transaction.
• Relayer: A server that receives the signed message, wraps it in a standard transaction, pays the gas, and broadcasts it to the network.
• Smart Contract Verifier: A contract that validates the user's signature and executes the intended logic.

An Ethereum standard that enables smart contract wallets, separating verification logic from execution. It's a foundational technology for sophisticated fee delegation through Paymasters. A Paymaster is a contract that can:

• Pay gas fees for a user's operations.
• Accept payment in ERC-20 tokens instead of the native chain token (e.g., ETH).
• Implement subscription models or sponsored sessions, allowing for seamless user onboarding.

A specific application of fee delegation where a project or dApp sponsors (pays for) its users' transactions to reduce friction. Common use cases include:

• Onboarding: Allowing new users to interact with a dApp without first acquiring the native token.
• Promotions: Running gas-free campaigns or airdrop claims.
• Enterprise Flows: Businesses covering costs for B2B or institutional operations. Networks like Polygon and protocols like Biconomy offer native sponsored transaction services.

The infrastructure components that enable fee delegation by handling transaction submission and fee payment.

• Relayer: A service that accepts signed messages, converts them to transactions, pays gas, and sends them to the network. Common in meta-transaction systems.
• Bundler: A specific type of relayer in the ERC-4337 ecosystem. Bundlers collect multiple user operations, package them into a single transaction, and pay the gas, profiting from economies of scale and priority fees.

The end-user experience enabled by fee delegation mechanisms. From the user's perspective, a transaction is gasless because they do not need to hold or spend the network's native token for fees. It's important to note:

• The transaction is not truly free; costs are just shifted to another party (sponsor, dApp, paymaster).
• This is critical for improving UX and accessibility, especially for users new to crypto or operating on non-EVM chains where acquiring gas tokens is difficult.