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STACKUP BLOG


HOW TO SPONSOR TRANSACTIONS USING A PAYMASTER

Paying for transaction fees on a blockchain can be a hassle, but with the use of
a paymaster, it doesn't have to be!
John Rising
Co-Founder and CEO of Stackup
Read Time: 3 minutes

Paying for transaction fees on a blockchain can be a hassle, but with the use of
a paymaster, it doesn't have to be! In this post, we'll explore what paymasters
are, how they work, and how you can set one up for your own use.


WHAT IS A PAYMASTER?

A paymaster is an entity that can sponsor gas fees for transactions on
Ethereum-based networks through the use of account abstraction, as specified in
the ERC-4337 standard. This enables users to pay for transaction fees in a
variety of ways, such as with an ERC-20 token like the stablecoin USDC, a credit
card, or subscription service, without having to hold Ether or sacrifice custody
of their account.


HOW DO PAYMASTERS WORK?

Paymasters work by abstracting the payment of transaction fees, allowing users
to pay for their transactions in a way that is convenient for them. When a
paymaster sponsors a transaction, it pays the transaction fees on behalf of the
user. This can be done through an off-chain service that decides whether to
sponsor transactions or through the use of a smart contract that automatically
pays for transactions.

An ERC-4337 transaction, a UserOperation, can specify a Paymaster directly. If
the Paymaster agrees to pay the transaction, the Paymaster will pay the gas fee.
All of this is coordinated through the EntryPoint contract, a singleton that
handles the execution and verification of ERC-4337 transactions. In some
specific cases, Paymasters must also stake Ether with the EntryPoint for
security.


HOW TO SET UP A PAYMASTER

Setting up a paymaster involves deploying a paymaster contract on the
blockchain, funding the contract, and optionally running an off-chain service to
sign UserOperations. The ERC-4337 specification allows anyone to build a
paymaster from scratch and start sponsoring transactions as long as it complies
with the standard. This can be a complex and security-intensive process.

If you're looking for a more convenient option, Stackup provides Plug-n-Play
APIs for various paymaster use cases. With Stackup, you can create a paymaster
and start sponsoring transactions for any UserOperation with just a few clicks.
No need to fill up gas tanks or deploy special contracts.


TRY IT YOURSELF!



Paymasters are a useful tool for abstracting the payment of transaction fees on
the Ethereum network. They allow users to pay for their transactions in a
variety of ways, without having to hold Ether or sacrifice custody of their
account. Setting up a paymaster involves deploying a paymaster contract on the
blockchain and funding it, and can also involve running an off-chain service to
sign UserOperations. If you're looking for a convenient way to set up a
paymaster, consider using Stackup's Plug-n-Play APIs. Create an account at
https://app.stackup.sh to get started today.

View more blog posts by Stackup

© 2023 Stackup Finance, Inc.


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