Who Pays the Network Fee in a Sponsored Transaction?

In a sponsored transaction, a paymaster advances the network fee instead of the user's wallet. The user signs an intent, a bundler includes it in a batch, and the paymaster contract decides whether the operation satisfies sponsor policy. Gas cost does not disappear: an application, service, or the user indirectly pays it through an ERC-20 token or product fee.

How does a UserOperation travel?#

Under ERC-4337, a smart account creates a UserOperation containing the target action, gas limits, and signature. A bundler groups operations and calls the EntryPoint contract. EntryPoint validates the account and payment, executes the action, and reimburses the bundler for actual gas from the account or paymaster deposit.

What does a paymaster do?#

A paymaster maintains a deposit in EntryPoint and decides during validation whether to sponsor a specific operation. Its policy may allow only a first transfer, selected contract, amount limit, or verified user. Another model accepts payment in an ERC-20 token, prices it, and covers native gas on the user's behalf.

Why is the transaction called gasless?#

The interface feels gasless because the user does not need to buy the native coin first. Validators and bundlers are still paid. An application may absorb the cost as a subsidy, include it in service pricing, or charge another asset. Sponsored gas or alternative gas payment is therefore more precise than free blockchain usage.

What are the limits and risks?#

A paymaster can reject an operation because of policy, limits, or an insufficient deposit, while a bundler may not include it promptly. A sponsor can sometimes pay gas even when the user's action reverts, creating abuse risks. ERC-20 conversion rates, hidden markup, and dependence on one service can make convenience costlier than direct payment.

What are the key takeaways?#

• A paymaster advances gas from its EntryPoint deposit.
• The user signs a UserOperation and a bundler submits it.
• The sponsor sets policies for limits, assets, actions, or accounts.
• Gasless means a different payment method, not zero cost.
• Paymaster or bundler rejection can stop the operation.