• Visa has begun blockchain experiments to enable the use of ERC-20 tokens for gas fees or remove the need for transaction fees altogether.
• The two sets of smart contracts, dubbed Paymaster, will simplify user interaction with the Ethereum network by performing complex tasks and managing transaction costs on behalf of other accounts.
• Visa seeks to leverage the ERC-4337 standard to implement an intermediary currency conversion service that would allow users to pay for gas fees with alternative tokens like dollar-pegged stablecoins or CBDCs.
Visa’s Blockchain Experiments
Visa has started experimenting with blockchain technology in order to allow users to use ERC-20 tokens as payment for gas fees, or even eliminate the need for such fees altogether. The two sets of smart contracts developed by Visa, called Paymaster, will make it easier for users to interact with the Ethereum network by performing complicated tasks and taking care of other accounts‘ transaction expenses.
ERC-4337 Standard
In order to bolster its efforts, Visa is attempting to take advantage of a new Ethereum standard known as ERC-4337. This protocol would help facilitate an intermediary currency conversion service that allows users to pay their gas fees with options such as dollar-pegged stablecoins or central bank digital currencies (CBDCs).
Account Abstraction
Account abstraction is a concept that aims at increasing flexibility when managing and controlling Ethereum accounts by separating control from its associated private key. This mechanism is enabled by ERC-4337 and could be used by Visa in order to provide its users this convenient service.
Paymaster Contracts
The first version of these Paymaster contracts explores whether it is possible for users to bypass ETH acquisition altogether and instead pay transaction fees using different tokens such as those mentioned before. This contract would collect any ERC-20 token from users and convert them into ether (ETH) following current exchange rates in order to cover these expenses automatically.
Conclusion
Visa’s experiments involving account abstraction through ERC-4337 might change how people interact with the Ethereum network by simplifying user experience and eliminating certain costs associated with transactions on this platform.
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