Gas sponsorship with ERC-3074

The introduction of ERC-3074 proposes changes to Ethereum's transaction handling, offering significant improvements in user experience through gas sponsorship and batch processing.

Advantages of ERC-3074

One of the key features of ERC-3074 is enabling transactions where the gas fees are covered by a third party even for already existing EOA wallets and their users. This is particularly advantageous for onboarding new users to AA mechanisms, who have no native assets to pay for their transactions out of their own pocket. This facilitation is managed through invokers who execute transactions on behalf of the user and cover the gas cost.

Additionally, ERC-3074 allows for the batching of multiple transactions into a single call. This capability ensures that all transactions are processed in the same block while reducing overall transaction fees. This efficiency is crucial for DeFi users who engage in complex transactional activities, as it simplifies and economizes the necessary steps. Through Gazelle, users always only click once, and then our protocol takes care of their executing their transactions.

Two approaches to sponsoring invokers

With ERC-3074, users have the flexibility to choose any Invoker for transaction processing. This method enables access to services like Gazelle where the invoker checks for valid subscriptions to sponsor gas for the user’s transaction. This approach offers universal access but varies in efficiency and control depending on the invoker's implementation.

Alternatively, users can opt for a SponsoredInvoker, a specialized contract that directly integrates gas sponsorship. This invoker, tightly integrated with other Gazelle contracts, provides a more streamlined transaction sponsorship with less gas overhead. However, it requires specific approval or whitelisting by wallets, which may limit its accessibility.

Subscription-based sponsorship

At Gazelle, we are building subscription-based gas sponsorship solutions designed to be delivery agnostic. Using our services, users can pay for their gas expenditure upfront using their preferred payment rails: crypto tokens or fiat.

While ERC-3074 enables more customization options for gas abstraction for EOA wallet users, it also opens them up for new attacks. The upgrade may let users authorize smart contracts to perform actions on their behalf within a single transaction.

We take UX and security as top priorities and aim to provide additional services bundled within the subscription offering, including transaction security supporting safer and more reliable blockchain interactions for our users, such as stopping the malicious transaction after the user has submitted their transaction. This becomes especially relevant in light of new security considerations introduced by EIP-3074.

Preparing for the future: Smart Accounts and Account Abstraction

While we need to be careful when introducing new, impactful upgrades to Ethereum, it is very important to prioritize improving Web3 UX as a whole, as potential users who are waiting to be onboarded often get discouraged and abandon the idea of adopting blockchains in their workflow. We have to realize that adoption has been stale and the user base consists only of speculators and airdrop farmers. If we want to bring the promise of “the next billion users” to crypto, we need to prioritize UX and prioritize it NOW.

Looking ahead, ERC-3074 sets the stage for the broader adoption of smart accounts, further broadening Gazelle’s addressable market. By facilitating easier transitions through features like batch processing and transaction sponsorship, it prepares for the eventual full abstraction of accounts into more secure and versatile smart accounts. We are committed to supporting these advancements by integrating sponsorship capabilities into these types of accounts shortly with our Sponsored Paymaster — coming soon™!

Conclusion

ERC-3074 stands to offer a dual advantage in enhancing Ethereum's blockchain usability: simplifying the user experience and reducing the cost barrier for complex transactions. By supporting both general and specialized invokers for different user preferences, ERC-3074 accommodates a wide range of Ethereum interactions from everyday transactions to intricate DeFi strategies.

If you’re interested in enabling frictionless and hedged gas sponsorship for your wallet or infrastructure, please let us know here.

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