Global payments giant Visa is deploying experimental smart contracts on Ethereum’s Goerli testnet to pilot gas-free transactions through account abstraction.
The two sets of smart contracts, called Paymaster, will simplify user interaction on the Ethereum network by performing complex tasks and managing transaction costs for other accounts.
Visa Tests Paymaster for Frictionless Transactions
Account abstraction is a proposal to increase the flexibility of management and behavior of Ethereum accounts by separating the control of an account from its associated private key, allowing it to be controlled by a smart contract. The mechanism is powered by ERC-4337, a new Ethereum standard launched in March.
Visa intends to use the ERC-4337 standard to implement an intermediary currency conversion service. The first version of the Paymaster contract explores whether users can pay transaction fees using alternative tokens such as dollar-pegged stablecoins or central bank digital currencies (CBDC).
The contract can collect any ERC-20 token from users and convert it to ether (ETH) based on the current exchange rate to pay gas bills for users, thus eliminating the need for claim ETH only for transaction fees.
“This sample contract contains the governing logic for Paymaster and the custom ERC-20 token. In this contract, we introduce the allowlist and a function to update the token-to-ETH conversion rate. Allowed we can better simulate real-life situations where the exchange rate between ETH and a token is dynamic,” Visa said in a report.
Enabling Gasless Transactions
The payments giant believes that the Paymaster concept will drive adoption by allowing users to fund only the cost of gas at the time of the transaction without any pre-funding requirement to optimize their cash management. -flow.
The second Paymaster contract seeks to eliminate the need for users to pay gas fees themselves, as in web2 peer-to-peer (P2P) transactions, by using a solution offered by the account abstraction, which allows third parties, such as fintech wallet providers, to manage costs.
In this case, third parties can act as Paymasters, fully sponsoring transaction fees for users. The experiments are based on starter code provided by the Ethereum Foundation and ERC-4337 core team.
We tested two core user operations: 1) payment with ERC-20 tokens using ERC-4337 Paymaster; 2) Sponsoring transaction fees for users (aka gasless txs) on ERC-4337 Paymaster
— Catherine Gu (@catgu_) May 17, 2023
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