Setting Up Fee Delegation for Memecoin User Onboarding

In the competitive landscape of memecoin launches, user acquisition cost is a primary metric. Requiring new users to first acquire a blockchain's native token (like ETH for Ethereum or SOL for Solana) to pay gas fees creates significant friction. Fee delegation solves this by allowing a project or sponsor to pay these transaction costs on behalf of users. This is not a subsidy of the transaction's value, but a meta-transaction where the sponsor covers the network's computational cost, enabling seamless interactions like token claims, airdrop participation, or initial swaps.

Technically, fee delegation is implemented using smart contract account abstraction patterns or dedicated relay services. A common approach involves users signing a message authorizing a transaction, which is then submitted to a relayer—a server that holds the native tokens. The relayer packages this signed message into a valid transaction, pays the gas, and broadcasts it to the network. On EVM chains, standards like EIP-2771 (meta-transactions) and EIP-4337 (account abstraction) provide frameworks for secure, non-custodial gas sponsorship. On Solana, the concept is often implemented using versioned transactions and instruction-level fee payment from a program-derived address (PDA).

For a memecoin project, setting up a delegation system requires careful planning. You must decide on a budget and rate limits to prevent abuse, choose between running your own relay infrastructure or using a service like Biconomy, Gelato, or OpenZeppelin Defender, and ensure the user experience is abstracted into your dApp's frontend. The smart contract must be designed to validate the sponsored transactions securely, often using signature verification to ensure only intended actions are paid for. A flawed implementation can lead to drained sponsor wallets.

The business case is clear: by absorbing a few cents in gas fees per user, projects can convert curious visitors into active token holders instantly. This is especially powerful for cross-chain onboarding, where a user on Chain A can be sponsored to claim tokens newly launched on Chain B. However, sponsors must monitor for sybil attacks and implement safeguards like captchas, social proof, or incremental unlock mechanisms to ensure the budget fuels genuine growth.

To build a system where you pay transaction fees for your users, you must first establish a development environment and understand the core components. You will need a Web3 wallet like MetaMask for testing, a Node.js environment (v18+), and a code editor. Crucially, you require access to a blockchain network; for initial development, a testnet like Sepolia or Goerli is recommended to avoid real gas costs. You will also need test ETH from a faucet for your sponsor account. Familiarity with Ethereum's EIP-1559 fee market is beneficial, as it defines how gas prices (base fee and priority fee) are structured.

The technical stack revolves around smart contracts and relayer infrastructure. You should be comfortable with Solidity for writing the sponsoring contract or using existing standards like EIP-4337 (Account Abstraction) for more flexible sponsorship. For a simpler, non-custodial approach, you will interact with a Paymaster service. Services like Biconomy, Stackup, or Pimlico provide Paymaster APIs that handle gas payment on behalf of users. You'll need to create an account with one of these providers and obtain API keys and a Paymaster contract address for your target network.

Your application's front-end must integrate a Web3 library to construct user operations. The most common choice is viem or ethers.js (v6). You will use these to create, sign, and send user transactions that are flagged for sponsorship. Understanding the difference between a standard transaction and a UserOperation (the transaction object in EIP-4337) is key. The UserOperation contains fields for specifying the paymaster, enabling the relayer network to forward the transaction and charge your deposit.

Finally, you must fund your sponsorship mechanism. For a custom smart contract, this means depositing native ETH or the chain's gas token. When using a third-party Paymaster, you will deposit funds into your dashboard on their service, which they will use to cover gas for transactions you approve. You must implement logic to decide which transactions to sponsor—typically by verifying a user's signature or checking if they hold your memecoin—to prevent abuse. Setting up monitoring for your sponsor balance is essential to ensure the onboarding flow doesn't unexpectedly halt.

Fee delegation, often called gasless transactions or meta-transactions, allows a third party to pay the network fees for a user's blockchain operation. This is critical for onboarding in the memecoin ecosystem, where new users may not hold the native chain token (like ETH on Ethereum or MATIC on Polygon) required for gas. The core mechanism involves a user signing a transaction message off-chain, which is then submitted and paid for by a relayer or sponsor. Popular standards for implementing this include EIP-2771 for secure meta-transactions and EIP-2612 for gasless token approvals.

The standard implementation flow involves three key steps. First, the user signs a structured message containing the details of their intended action, such as a token transfer. This signature is sent to a relayer service. Second, the relayer wraps this user-signed payload into an actual on-chain transaction, pays the gas fee, and submits it to a Gasless Forwarder contract. Finally, the forwarder contract verifies the user's signature and executes the intended call to the target contract (e.g., your memecoin). This decouples the entity executing the transaction from the one paying for it.

For developers, integrating fee delegation starts with your smart contract. You must make your memecoin contract compatible with a forwarder. Using OpenZeppelin's contracts is a common approach. For example, your ERC-20 token can inherit from ERC2771Context to securely handle meta-transactions. You must also set up a trusted forwarder address in the contract's constructor. The critical security consideration here is ensuring your contract correctly uses the _msgSender() function instead of msg.sender to derive the true user identity from the forwarded call, preventing spoofing attacks.

On the backend, you need a relayer service to sponsor transactions. This can be a custom server using libraries like OpenGSN (Gas Station Network) or managed services from providers like Biconomy, Gelato, or OpenZeppelin Defender. These services manage the economics of gas sponsorship, often allowing you to fund a paymaster contract with native tokens. They also handle nonce management and gas price estimation. Your application's frontend would integrate an SDK (e.g., Biconomy's) to create the user signature and send it to the relayer's API endpoint instead of directly to the blockchain.

The economic model for sponsorship must be sustainable. As a project, you can absorb gas costs as a user acquisition expense, fund a paymaster contract from the project treasury, or use a hybrid model where fees are paid in your memecoin itself (requiring a more complex swap mechanism). It's essential to monitor relay costs and set daily limits per user or transaction to prevent drain attacks. Tools like Defender Sentinel can automate alerts for abnormal spending patterns on your paymaster contract.

In practice, a complete setup for a memecoin on Polygon might involve: deploying an ERC-2771 compliant token, funding a Biconomy Paymaster with MATIC, and integrating the Biconomy SDK into your dApp's frontend. When a user clicks "Swap," they sign a message, your backend relays it, and the swap executes with zero MATIC required from the user. This seamless experience significantly lowers the barrier to entry, which is vital for memecoins targeting a broad, non-technical audience.

Fee abstraction, or gasless transactions, is a critical feature for onboarding new users to memecoins. New users often lack the native blockchain token (like ETH or MATIC) required to pay transaction fees, creating a significant barrier to entry. A fee delegation smart contract solves this by allowing a third party—such as the project's treasury or a designated relayer—to sponsor these fees. This design typically involves a paymaster contract that validates and pays for transactions on behalf of users, enabling them to interact with your memecoin's functions without holding gas tokens.

The core mechanism relies on EIP-4337: Account Abstraction or custom relayers. In a standard EIP-4337 setup, a Paymaster contract holds the sponsor's funds. When a user submits a gasless transaction via a UserOperation, the paymaster verifies predefined rules (e.g., the user is swapping for the memecoin) and subsequently reimburses the bundler for the gas costs. A simpler, custom approach uses a signed meta-transaction pattern, where users sign messages off-chain, and a relayer submits them, paying the gas. Key security considerations include preventing replay attacks, setting spending limits, and whitelisting allowed actions.

Here's a basic Solidity structure for a custom fee delegation contract. The contract uses signature verification to validate the user's intent before executing a token transfer and charging the sponsor.

solidityCopy
// SPDX-License-Identifier: MIT
pragma solidity ^0.8.19;

contract FeeSponsor {
    address public owner;
    IERC20 public memecoin;
    mapping(address => uint256) public nonces;

    event SponsoredTransfer(address indexed user, uint256 amount, uint256 nonce);

    constructor(address _memecoin) {
        owner = msg.sender;
        memecoin = IERC20(_memecoin);
    }

    function sponsoredTransfer(
        address user,
        uint256 amount,
        uint256 nonce,
        uint8 v,
        bytes32 r,
        bytes32 s
    ) external {
        require(nonce == nonces[user]++, "Invalid nonce");
        bytes32 hash = keccak256(abi.encodePacked(user, amount, nonce, address(this)));
        address signer = ecrecover(hash, v, r, s);
        require(signer == user, "Invalid signature");
        require(memecoin.transferFrom(owner, user, amount), "Transfer failed");
        emit SponsoredTransfer(user, amount, nonce);
    }
}

This contract allows a user to receive memecoins by submitting a signed message; the gas for the sponsoredTransfer call is paid by the relayer who submits it.

For production, integrate with a relayer infrastructure. Services like OpenGSN (Gas Station Network) or Biconomy provide robust, audited relayers and paymasters. Alternatively, you can run your own relayer using the @opengsn/gsn package to package and submit signed meta-transactions. The relayer's primary jobs are to: - Receive signed requests from users via your dApp's frontend. - Validate the request against the smart contract rules. - Submit the transaction, paying the gas fee. - Optionally, be reimbursed by the sponsor contract in batches to optimize gas costs.

When designing the system, implement strict validation logic in your paymaster to control costs. Common patterns include: - Whitelisted functions: Only sponsor fees for specific actions like the initial token claim or first swap. - Capped budgets: Set a daily or per-user gas budget to prevent drain attacks. - Token-based rules: Only pay if the user receives a minimum amount of your memecoin, ensuring sponsorship drives real onboarding. Always audit the signature verification and nonce management to prevent replay attacks across chains or contract upgrades.

Testing is essential. Use forked mainnet environments with tools like Foundry or Hardhat to simulate gas sponsorship under real conditions. Key test scenarios include: verifying signature replay fails, ensuring only the owner can fund the paymaster, and stress-testing gas costs under high network congestion. By implementing fee abstraction, you remove the primary friction point for new users, potentially increasing your memecoin's adoption rate by allowing seamless first interactions directly from a wallet like MetaMask without prior token purchases.

Biconomy's Smart Accounts and Paymasters enable a critical feature for memecoin projects: gasless transactions. This is essential for onboarding, as it removes the primary friction point for new users who may not own the native chain token (like ETH for Ethereum) to pay for gas. Instead of the user paying, the project can sponsor these fees, creating a smooth, web2-like experience where actions like claiming airdrops or making initial trades require no upfront crypto. This architecture uses account abstraction (ERC-4337) to separate transaction execution from fee payment.

Setting up fee delegation involves three core components. First, you integrate the Biconomy Smart Account SDK to create and manage user wallets. Second, you configure a Paymaster on the Biconomy dashboard, funding it with the native token to cover sponsored gas. Third, you use the Biconomy Bundler to submit user operations (UserOperations) that are validated and have their fees paid by your Paymaster. The flow is: user signs a meta-transaction, your dApp sends it to the Bundler, the Paymaster adds a sponsorship signature, and the Bundler submits it to the network.

Here is a basic code example for initializing a Biconomy Smart Account and creating a gasless user operation to claim a memecoin airdrop:

javascriptCopy
import { createSmartAccountClient } from "@biconomy/account";
const smartAccount = await createSmartAccountClient({
  signer: userWallet,
  bundlerUrl: `https://bundler.biconomy.io/api/v2/80001/nJPK7B3ru...`,
  biconomyPaymasterApiKey: process.env.BICONOMY_PAYMASTER_API_KEY,
});
const claimTx = {
  to: memecoinContractAddress,
  data: claimFunctionData,
};
const userOpResponse = await smartAccount.sendTransaction(claimTx, {
  paymasterServiceData: { mode: "SPONSORED" },
});

The paymasterServiceData object with mode: "SPONSORED" instructs Biconomy to cover the gas costs.

For memecoin projects, strategic fee sponsorship is key. You can configure gas policies in your Paymaster dashboard to sponsor only specific functions (like claim or a first swap) up to a set gas limit, preventing abuse. Monitoring your Paymaster's balance and transaction volume through Biconomy's dashboard is crucial to ensure uninterrupted service. Consider using their webhook notifications for low-balance alerts. This model turns gas fees from a user problem into a predictable operational cost for your project, directly correlated with successful user acquisition.

Beyond basic onboarding, you can implement conditional sponsorship using Biconomy's Policy Engine. For example, you could sponsor gas only for transactions interacting with your memecoin's liquidity pool on a specific DEX, or for users who hold a minimum token balance. This allows for sophisticated growth mechanics. Always test your integration thoroughly on a testnet like Mumbai or Sepolia before deploying to mainnet. Refer to the official Biconomy Developer Docs for the latest SDK updates and detailed API references.

The Gas Station Network (GSN) is a decentralized relayer network that allows users to interact with smart contracts without holding the native blockchain token (e.g., ETH) for gas fees. For a memecoin project, this is a critical tool for onboarding new users who may not yet own the chain's base currency. Instead, a relayer pays the transaction fee on the user's behalf and is later reimbursed by the dApp's contract, which uses a trusted forwarder to verify the meta-transaction's signature. This abstracts away the complexity of gas from the end-user experience.

To integrate OpenGSN v3, you must first modify your smart contract. Your contract must inherit from ERC2771Recipient (for OpenZeppelin-compatible contracts) to securely accept meta-transactions. Crucially, functions called via GSN must be marked with the _msgSender() modifier instead of msg.sender to correctly resolve the original signer's address. For example, a memecoin mint function would use _msgSender() as the recipient. You also need to whitelist a trusted forwarder address, typically provided by the GSN network, in your contract's constructor.

The next step is to deploy and fund a Paymaster contract. The Paymaster is responsible for deciding which transactions to sponsor and holds the ETH used to pay relayers. You can use a standard VerifyingPaymaster which validates a user's signature, or create a custom one with specific logic (e.g., only sponsoring first-time minters). After deployment, you must deposit ETH into the Paymaster so it has funds to reimburse relayers. The required amount depends on your expected user volume and gas costs.

On the frontend, you need to configure your web3 provider to use the GSN. Libraries like @opengsn/provider wrap your existing Ethereum provider. When a user initiates a transaction, this provider automatically packages it as a meta-transaction, finds an available relayer via the GSN network, and sends it for processing. The user signs the transaction normally with their wallet, but never submits or pays for gas. The code change is minimal, often just swapping the provider object used to initialize your web3 instance or ethers.js signer.

For a memecoin airdrop or mint, a typical integration flow is: 1) User connects wallet, 2) Dapp uses GSN provider to call the contract's mint(_msgSender()) function, 3) User signs the meta-transaction, 4) GSN relayer picks it up, pays the gas, and submits it, 5) Your contract's Paymaster reimburses the relayer. This creates a seamless experience identical to a web2 transaction. You can monitor your Paymaster's balance and top it up as needed using the GSN Dashboard.

Key considerations include security—always use the official _msgSender() pattern—and cost management. While you absorb gas costs, you can implement rate-limiting or require a proof-of-humanity check in your Paymaster logic to prevent abuse. For testnets, use the Goerli or Sepolia GSN networks which provide test ETH for your Paymaster. By integrating GSN, you remove the single biggest hurdle for new crypto users: acquiring gas tokens, which can significantly boost adoption for community-driven memecoin projects.

Fee delegation, or gas sponsorship, is a critical tool for memecoin projects aiming to onboard users who may not hold the native blockchain token (like ETH or MATIC) for transaction fees. A subsidy treasury funds these sponsored transactions, allowing new users to perform their first swap, transfer, or claim without any upfront cost. This mechanism directly tackles a major friction point in user acquisition, especially on high-fee networks. By abstracting away gas, you create a seamless, 'web2-like' experience that can significantly boost initial engagement and community growth.

The technical implementation typically involves a relayer service or a smart contract paymaster. A common architecture uses a gas tank contract funded by the project treasury. When a user submits a transaction, a backend relayer signs it, pays the gas fee from the tank, and broadcasts it on the user's behalf. On EVM chains, you can integrate with ERC-4337 Account Abstraction paymasters like those from Stackup, Biconomy, or Pimlico, which handle the sponsorship logic on-chain. For a simpler start, services like Gelato Relay or OpenZeppelin Defender offer managed relayers that can be configured to sponsor specific functions of your contract.

To set up a basic system, your smart contract needs to include access control, often via onlyOwner or a dedicated TreasuryManager role, for withdrawing funds to replenish the gas tank. The relayer's address must be whitelisted to call certain functions. Here's a minimal example of a contract function a relayer might call for a user:

solidityCopy
function claimAirdrop(address user) external onlyRelayer {
    require(!hasClaimed[user], "Already claimed");
    hasClaimed[user] = true;
    _mint(user, AIRDROP_AMOUNT);
}

The onlyRelayer modifier ensures only your approved service can execute this, preventing abuse of the subsidy.

Key configuration parameters for your subsidy system include the maximum gas price you're willing to sponsor, transaction type limits (e.g., only first claim or swap), and user eligibility checks (e.g., new wallets). It's crucial to monitor the treasury balance and set daily or per-transaction spending caps to prevent drain attacks. Analytics are essential; track metrics like cost per onboarded user, sponsored transaction success rate, and subsequent organic user activity to measure ROI. Tools like Dune Analytics or Covalent can help visualize this data.

For production deployment, security audits are non-negotiable. The paymaster or relayer logic must be rigorously tested to prevent vulnerabilities like transaction replay or unbounded gas consumption. Consider a phased rollout: start with a testnet campaign, then move to mainnet with a hard cap on the initial treasury allocation. Always maintain a multi-sig wallet for the subsidy treasury funds. This approach allows you to refine the process, gather data, and build trust before committing significant capital to the onboarding program.

The core setup involves three components: a Paymaster contract (like VerifyingPaymaster from @account-abstraction/sdk), a Relayer service to broadcast sponsored transactions, and a frontend integration using a library such as viem or ethers.js. The paymaster uses a signature scheme to verify that a transaction is eligible for sponsorship before the relayer submits it to the network, with the sponsor covering the gas costs. This removes the primary friction point for new users who lack native chain tokens.

For production, key next steps include implementing robust security and monitoring. You should set spending limits per user or session, use a dedicated wallet with a strict budget for the paymaster, and integrate transaction analytics to track onboarding costs and user behavior. Tools like Tenderly or OpenZeppelin Defender can help monitor for abnormal sponsorship patterns. Remember, the paymaster's signer key is critical; it must be stored securely, preferably using a hardware wallet or a managed service like AWS KMS or GCP Secret Manager.

To extend this system, consider integrating with Account Abstraction (ERC-4337) smart accounts. This allows for more sophisticated sponsorship logic, such as only paying for a user's first five transactions or covering gas for specific interactions with your memecoin's staking contract. You can also explore using Gelato Network or Stackup as managed relayer services to simplify infrastructure. For broader ecosystem tools, review the EIP-4337 Bundler implementation and the Account Abstraction SDK.

Finally, continuously test your implementation. Use testnets like Sepolia or Holesky to simulate high load and ensure your relayer can handle transaction spikes. Keep your contracts upgradeable in case the underlying EntryPoint contract specification changes. By delegating fees, you lower the barrier to entry, but the responsibility for secure, cost-effective management of the sponsorship system now rests with your team.