Gasless Royalty

This is the core mechanism where the gas fee for the royalty payment is paid by a party other than the buyer. Common models include:

• Protocol Sponsorship: The marketplace or platform pays the fee, treating it as a cost of customer acquisition.
• Seller-Funded: The fee is deducted from the seller's proceeds, making the buyer's experience seamless.
• Relayer Networks: A third-party relayer submits the transaction and covers the cost, often recouping it via other means. This abstraction is critical for improving user experience and adoption.

Systems differ in how they enforce royalty payments:

• On-Chain Enforcement: Uses smart contract logic (e.g., ERC-2981) to mandate royalty payments directly in the NFT's transfer function. Gasless systems must integrate with or wrap these standards.
• Off-Chain Agreements: Relies on marketplace policies and legal terms of service to honor royalties. Gasless payments here are a service layer atop voluntary compliance. The trend is toward hybrid models that use on-chain signaling with off-chain execution for efficiency.

A key technical implementation uses meta-transactions. Here, the buyer signs a message authorizing the sale and royalty payment, but does not send the transaction. A relayer (like the marketplace backend) then packages this signed message into a transaction, pays the gas, and broadcasts it to the network. This relies on signature verification standards like EIP-712 for structured data signing, ensuring security and intent clarity without the signer needing ETH for gas.

To optimize gas efficiency, systems often aggregate multiple royalty payments into a single transaction. Instead of paying royalties for each NFT in a bundle sale individually, the protocol calculates the total owed and executes one transfer. This batching significantly reduces the overall gas overhead that the sponsor must pay, making the gasless model more economically viable for platforms handling high volume or complex multi-creator sales.

Robust systems require fallbacks if the primary gasless method fails. This includes:

• Graceful Degradation: The transaction can revert to a standard, user-paid gas model if the relayer is unavailable.
• Staking/Slashing: Relayers may stake collateral to guarantee service, which is slashed for non-performance.
• Fee Economics: The system must sustainably align incentives among buyers, sellers, creators, and fee payers, often through platform fees or tokenomics.

Gasless royalties are frequently part of a broader fiat-on-ramp or alternative payment strategy. For example, a buyer might purchase an NFT directly with a credit card. The payment processor handles the conversion to crypto, pays all network fees (including gas for royalties), and settles the transaction. This completely abstracts blockchain complexity, making NFTs accessible to non-crypto-native users while ensuring creators are paid.

Platforms or marketplaces sponsor gas costs as a service to users. Key characteristics:

• The marketplace contract acts as the transaction sender and pays the gas.
• Fees are recouped by taking a slightly higher platform fee or are subsidized as a user acquisition cost.
• This creates a seamless user experience similar to web2, hiding blockchain complexity.
• It often requires a gas tank model where the platform pre-funds a wallet to cover these sponsored transactions.

Royalty standards like ERC-2981 define how to read royalty info, but gasless payment requires an additional layer. Implementation methods include:

• Forwarder Contracts: A contract that handles the NFT transfer and royalty payout in a single, sponsored transaction.
• Batch Processing: Royalties are settled off-chain in a state channel or sidechain, with periodic, gas-optimized batch settlements to mainnet.
• This ensures royalty logic is immutable and enforced by the smart contract, not marketplace policy.

Blockchains with inherently low transaction fees (like Polygon, Arbitrum, Solana) reduce the gas problem to near-zero. This enables:

• Direct on-chain royalty payments without complex abstraction layers.
• Royalties become a trivial cost embedded in the transaction.
• The model shifts from "gasless" to "negligible-gas", simplifying contract design and user experience while maintaining decentralized enforcement.

Traditional on-chain royalties require creators to manually initiate a transaction to claim or withdraw accumulated funds from a smart contract. This creates significant friction because:

• Creators must hold the blockchain's native token (e.g., ETH) to pay gas fees.
• For small or frequent payments, gas costs can exceed the royalty value.
• It adds administrative overhead, discouraging consistent participation.

Gasless solutions flip the traditional pull model (creator pulls funds) to a push model (funds are pushed to the creator).

• Pull Model: Creator-initiated transaction. High friction, as described.
• Push Model: The protocol, marketplace, or a relayer network automatically covers the gas cost to send royalties directly to the creator's wallet. The fee is often abstracted or subsidized.

Gasless royalties are typically enabled via meta-transactions and relay services. The process involves:

1. The creator signs a permit or off-chain message authorizing the transfer.
2. A relayer (which could be the marketplace protocol or a dedicated service) submits the transaction to the network, paying the gas fee.
3. The relayer may be reimbursed via a small fee taken from the royalty or funded by the protocol's treasury.

Several ecosystems have developed standards and tools for gasless transactions:

• EIP-3009 (transferWithAuthorization): A token standard enabling gasless transfers via signed authorizations.
• EIP-2612 (permit): Allows gasless approvals for ERC-20 tokens, which can be leveraged in royalty payment flows.
• GSN (Gas Station Network): A decentralized relayer network for executing meta-transactions.

Sustainable gasless models require careful incentive design to cover relay costs. Common approaches include:

• Protocol Subsidy: The marketplace or NFT platform covers gas as an operational cost to foster ecosystem growth.
• Fee Absorption: A small percentage of the royalty payment is allocated to cover the relayer's gas and service fee.
• Sponsored Transactions: A third-party (e.g., a brand or sponsor) pays gas fees for a set of creators as a promotional tool.

By removing the gas fee barrier, gasless royalties:

• Increase Royalty Compliance: Makes it economically viable to enforce royalties on all secondary sales.
• Improve Creator UX: Provides a seamless, automated income stream resembling Web 2 platforms.
• Enable Micro-Payments: Allows for viable revenue from low-value, high-volume transactions.
• Decentralize Participation: Empowers creators globally who may not have easy access to native tokens.

Gasless royalty enforcement depends on centralized or semi-centralized off-chain infrastructure like relayers, indexers, or centralized marketplaces. This creates a single point of failure and potential censorship. If the relayer service goes offline or a marketplace chooses to ignore the policy, royalty payments can cease entirely, breaking the creator's revenue stream.

Transactions can bypass gasless royalty systems by interacting directly with the NFT's core smart contract (e.g., calling transferFrom on the ERC-721 contract) instead of using the sanctioned marketplace or relayer. This is a fundamental limitation because blockchain protocols like Ethereum cannot force fee payment on a simple transfer. Only transactions routed through the enforcing intermediary are subject to the fee.

Implementing gasless royalties adds significant complexity:

• For Developers: Requires building or integrating with relayers, managing meta-transactions, and handling signature verification.
• For Marketplaces: Must actively choose to support and integrate each unique royalty enforcement method, leading to fragmentation.
• For Users: May face confusion between marketplaces that respect royalties and those that bypass them.

The entity paying the gas fees (the relayer) must have an economically sustainable model. Common models include:

• Fee Abstraction: Batching transactions or using layer-2 solutions to reduce costs.
• Sponsorship: Covered by a marketplace or protocol treasury.
• Recoupment: Taking a small cut of the royalty or transaction. If the cost to relay exceeds the value captured, the service becomes unsustainable and will shut down.

Gasless solutions are often proprietary, leading to vendor lock-in. A creator relying on Marketplace A's gasless system may find their royalties unenforceable on Marketplace B. The lack of a universal, chain-level standard (like EIP-2981 for on-chain royalties) fragments enforcement and forces creators to depend on specific platforms for revenue assurance.

Gasless systems introduce new trust vectors:

• Signature Security: Users must sign off-chain messages, which could be maliciously reused if not properly designed (e.g., using EIP-712 for structured data).
• Relayer Trust: The relayer must honestly submit the transaction and not censor or modify it.
• Front-running: In some designs, a signed meta-transaction can be front-run by another party who pays the gas to claim the fee.