Earlier blockchain networks were heavily dependent on transaction fees as a means to secure the network and grow participation. But more than a decade after its widespread introduction, it’s becoming evident that the future of the industry is connected with zero fee blockchains.
Today’s top Web3 business models, including metaverse gaming, NFT collectibles, and creator-first content platforms, face scaling challenges if users are charged to interact. Gasless transaction models, on the other hand, provide a seamless and frictionless experience that is fundamental to onboarding billions of users. So, here we consider zero free crypto payments, how they work as of now, what are the benefits, risks, and challenges, as well as the outlooks for the future.
With gasless transactions users can interact with a blockchain without paying any fees, which is standard when performing or validating an action on-chain. In such a system the fees are either paid by a third party (such as a dApp developer or a relayer) or entirely abstracted away from the end user.
This is highly effective in bringing new inexperienced users onboard. By saving people from the requirement of holding or spending a native token, gasless systems provide easy access to interacting with blockchains.
A sensible way of treating gas fees contributes in balancing a good user experience with a sustainable network. In such a system moderately low-urgency or relatively-uptodate-actions can be kept gasless, while high-reputation or high-importance exchanges may still require a transfer fee. Here are some examples of both zero fee and low gas transactions:
| Gasless Transactions (Limited computing requirements) | Paid Transactions (Complex computing needs) |
|---|---|
|
|
The gasless blockchain model establishes that the majority of users have a fee-free experience and that power users subsidize network security — a smart tradeoff among network scalability, revenue and user experience.
Let’s consider the SKALE model as akin to cloud computing. In cloud services (such as AWS, or Google Cloud), companies pay a fee up front to host their applications. End-users don’t have to pay by the interaction, when they send an HTTP request, for example, the costs that are laid on the provider.
In the same vein, SKALE Network allows developers to rent SKALE Chains utilizing SKL tokens on Ethereum. After deployment, developers can develop dApps that users will use to interact without having to pay gas costs. Plus developer’s up-front payment already covers these costs.
In order to manage usage and prevent abuse (e.g. DDoS attacks), developers must distribute sFUEL tokens to users so they can deploy their code. sFUEL is not for sale and simply acts as a means to meter network use in a non-monetary manner.
Put another way, SKALE provides “cloud-like” infrastructure for blockchain and gives developers the ability to produce scalable end-user centric Web3 applications with no transaction fees for users the same way that modern Web applications are not charged by CPU, Storage, RAM, etc per click or request.
Layer-2 Relayers (such as 0x Gasless) are services or tools that aid in sending transactions on Layer 2 (L2) blockchains, most notably by simplifying gas and allowing free blockchain transactions for end users.
Relayer is an off-chain service that accepts a signed message or meta-transaction from user and pays the gas on behalf of this user to send the transaction on-chain. In reward the relayer can be repaid later, paid through another process, or subsidized.
0x Gasless is a meta-transaction relayer service developed by 0x that enables users to use dApps without having to own ETH / a native token to cover for gas. Here are some common use cases:
Gasless crypto transactions are already opening up new possibilities in a range of industries. The key use cases include: simplifying operations for decentralized finance (DeFi); lowering the cost of trading assets in blockchain-based gaming which can be done frequently; eliminating current barriers to entry in NFT marketplaces.
PancakeSwap has launched a new product meant to produce better execution prices for crypto users, a move aimed at making the crypto space more accessible.
The new product, PancakeSwapX, enables zero transaction fees and gasless asset swaps on Ethereum and Arbitrum, according to an announcement shared to Cointelegraph. This is a huge usability improvement for DeFi. Chef Kids, Head Chef at PancakeSwap says:
“[PancakeSwapX] is allowing traders to focus solely on executing their trades without the hassle of maintaining multiple native gas tokens or calculating gas fees. Additionally, by aggregating liquidity from multiple sources, PancakeSwapX eliminates the need to switch between different platforms for better execution prices.”
Without innovations such as PancakeSwapX, new users have to start by opening a native Ethereum wallet and buying ETH in order to pay for gas fees, just to be able to interact with the blockchain. This onboarding is rather clumsy, not to mention discouraging for fledgling users who may throw in the towel and sign up at the centralized exchanges (CEXs) instead.
Some decentralized exchanges (DEXs) have already implemented zero cost crypto payments; others support them using relayers or meta-transaction systems. Here is a summary of well-known DEXs or protocols that enables gasless or subsidized transactions:
They enable particularly easy onboarding for new users reducing friction within DeFi.
Gasless transactions are especially beneficial, especially when we are talking about decentralized applications. They provide improved user experience, better adoption, and UX.
New users can start using blockchain apps without the need of getting native tokens or going through cumbersome setup steps by eliminating gas fee friction for basic interactions.
With no gas fees to consider, adopting new apps is far easier. Developers can freely go about the business of playing with application features instead of managing gas tokens or calculating fees.
Faster activation with higher probability of returning users equals improved retention. With “no need to think, whether you’ll waste ETH for gas,” users are more likely to experiment with the likes of swapping, staking, voting, etc, rather than just buying and holding tokens and assets.
Using gasless (or zero gas) transactions is great for UX, but it also means several risks and marginal products that dApp developers, product managers & protocol designers have to deal with.
Although it is very convenient, the implementation of free crypto transactions, comes with spam and relayer attacks when not properly executed. The main concern is as follows: without having to pay gas, anyone can send infinite transactions. Here is the description of the risks concerned with spam:
