All companies are free of charges, can users be retained?

Reprinted from chaincatcher

03/20/2025·2M

Original text: The Real State of Gasless Web3

Compiled by: Deep Tide TechFlow

In just 30 days, 89 projects distributed on 9 blockchains completed more than 2 million Gas-free transactions, saving up to $117,000 in Gas fees.

This wave of gas-free transactions shows that solutions like Paymaster (Paymaster) in the ERC-4337 smart wallet can quickly increase on-chain activity by paying for users.

Paymaster driver usage may mask real user needs

The surge in transaction volume does not necessarily reflect real user interest, especially when a small number of wallets (such as traders, robots) repeatedly call contracts.

For example, one-time airdrop, free casting or collection activities will lead to a surge in the number of wallets in the short term, but subsequent use may be very small.

Currently, NFT, gaming and token-related projects do attract a large number of new wallets, but many of them are only used for one-time operations (such as minting or receiving rewards) and have no ongoing user engagement.

On the other hand, some applications show deeper reuse, often thanks to more attractive gameplay loops, regular DeFi operations, or infrastructure-level services.

These findings suggest that ERC-4337 smart wallet is reshaping on-chain activities. On the one hand, the sponsorship of Gas fees effectively attracts users; on the other hand, only applications that are attractive and can encourage users to reuse can truly retain them.

@0xKofi creates an authoritative dashboard that tracks this growth, powered by @base : https://www.gogasless.io/leaderboard/all

Core data

89 standalone applications/protocols
About 724,000 active smart wallets
About $117,000 Gas fee is abstracted
About 2.08 million transactions without Gas fees

A larger picture of the evolution of ERC-4337

Rapid growth in Gas-free transactions is part of a larger trend. In 2024, more than 103 million user operations (UserOps) performed through the ERC-4337 account, an increase of more than 10 times compared with 2023 (8.3 million). Of these, 87% of transactions are paid by Paymaster, providing a Gas-free experience.

An interesting trajectory of this evolution can be seen from the monthly Paymaster Gas spending chart:

Early adoption stage (2023) : Optimism took the lead in adopting it before mid-2023.
Growth Stage (end of 2023) : By October 2023, monthly expenditure has steadily increased to about US$400,000.
Peak Activity (April 2024) : Spending surged to about $700,000, mainly driven by Base.
Recent trends (end of 2024 to early 2025) : reached a new high from November to December 2024 (about US$630,000), but expenditures dropped significantly at the beginning of 2025, reaching approximately US$150,000 in February 2025.

The UserOps fees paid by apps and users through Paymaster have exceeded $3.4 million, and the major providers include @biconomy, @pimlicoHQ, @coinbase and @Alchemy. Despite the market contraction, total spending in the first quarter of 2025 showed a downward trend, @base ($391,000), @ethereum ($121,000) and @BNBCHAIN (approximately $112,000) remained the dominant players.

Data source: https://www.bundlebear.com/

Developer: @0xKofi

Chain activity ranking

Base (43.2%) : Entertainment and social center, dominating the gaming field (76.8%).
Polygon (21.4%) : Community interaction layer, focusing on NFT (50.7%) and Telegram wallet (42.3%).
Optimism (8.5%) : Focus on security and emphasizes restoration of infrastructure.
Celo (7.4%) : Expert in segmented fields, focusing on forecasting the market.
BSC (4.2%) : Value transfer layer, Gas costs the highest, focusing on token trading.

Key insights in the data

Before you can dig deeper into the data, you need to understand two key metrics:

1️⃣ Tx/Wallet (number of transactions per wallet) – Measure the average number of transactions per wallet. Low values (such as 1.0) indicate single use, such as casting NFTs or claiming airdrops. A high value (such as 25) indicates repeated participation, such as active trading, gameplay, or robotic operations.

2️⃣ Cost/Tx (cost per transaction) – Indicates the average cost per transaction. In a Gas-free system, it reflects the abstraction of each transaction, rather than the actual payment of the user.

1. NFT **project: Large wallet count usually means one-time

accounts**

Piggybox : About 1 transaction/wallet, about $0.004/transaction.
Somon Badge : About 1.4 transactions/wallets, about $0.007/transaction.

Interpretation : Piggybox's wallet to transactions is a 1:1 ratio that strongly indicates that it is driven primarily by minting or collecting activities. Piggybox is an NFT obtained by a user when registering for EARN'M, and comes with a draw box that may contain EARNM tokens.

One-time surge : Many wallets only trade once (initial minting or collecting) and then no longer use it, thus an almost perfect 1:1 ratio.

Ranking twist : Piggybox tops the wallet count/transaction volume rankings due to a large number of new wallets involved in minting. But if disposable wallets are filtered out, their ranking may fall from the top five and user retention rates are also very low.

2. Token trading: a few projects dominate

Data Analysis : Total token transactions (868,000 transactions) seem to dominate, but there are 26 token items on the list, which is far more than other categories. However, only two tokens ($BVRP and $USDC) have transaction volumes of more than 667,000, accounting for the vast majority of transaction volumes.

* **$BVRP**: Each wallet has an average of about 25 transactions, with a cost of $0.012 per transaction. 

* **$USDC**: The average price per wallet is about 4.6 transactions, with a cost of $0.21 per transaction.

Interpretation :
- This concentration of transaction volumes shows that not all token projects are equally active, but that the growth of total transaction volume is driven by a few top projects.
- $BVRP shows extremely high transaction activity compared to the number of wallets, which may indicate high user engagement on its platform, frequent transactions and may include automation or repetitive operations.

**3. Game: The difference between a "hot product" and a

wallet/transaction ratio**

Data Analysis :

* _**[@SuperChampsHQ](https://x.com/@SuperChampsHQ)**_ : About 1.49 transactions per wallet, costing $0.017 per transaction.

* _**[@BLOCKLORDS](https://x.com/@BLOCKLORDS)**_ : About 42 transactions per wallet, costing $0.009 per transaction.

* _**[@miracleplay_cn](https://x.com/@miracleplay_cn)**_ : About 14 transactions per wallet, costing each transaction is $0.012.

Interpretation :
- Although Super Champs' total transaction volume (463,000) far exceeds other games (about 13,000 in total), it only completed about 1-2 transactions per wallet, indicating low user engagement.
- Blocklords, although the number of wallets is small, has extremely high transaction volumes per wallet (about 42 transactions), which is often associated with repetitive behaviors that may be operated by robots. As David Johansson of Blocklords said, “They are fighting robots.”

https://www.blockchaingamer.biz/features/interviews/33860/blocklords-david-johansson-podcast/

4. Cross-chain **bridge and plug-in: stable use and higher Gas

cost**

UniversalX : About 4.4 transactions per wallet, costing $0.55 per transaction.

Safe4337Module : Approximately 5.1 transactions per wallet, costing $0.053 per transaction.

Interpretation :
- Behind the scenes tools : Cross-chain bridges and plugins are not as eye-catching as tokens or games, but their usage remains stable as multiple dApps rely on them.
- Ecological Health Indicators : Continuous moderate use of infrastructure services indicates that it provides real practical value rather than a hype-driven short-term surge.

5. Trends in specialization of on-chain activities

@base : 99.5% of game wallet activity (312,361 out of 310,934 wallets).
@0xPolygon : Dominates NFT and social activities, accounting for 87% of the ecosystem's NFT wallets.
@BNBCHAIN : Leads in high-value cross-chain bridge transactions, accounting for 23.2% of all Gas abstract transactions.
@Celo : Strong performance in the forecast market (25,574 wallets, an average of 12.7 transactions per wallet).

6. Inter-chain cost difference

Gasless transaction costs on different chains vary by up to 100 times, driving different application categories to select specific chains:

Ethereum : $2.41 per Gas transaction (up to the highest).
BSC : $0.50 per Gas transaction.
Base : $0.02 per Gas transaction (lowest in the main chain).
Polygon : $0.03 per Gas transaction.

Conclusion : This huge difference in cost structure will drive specific blockchains to be selected in specific application categories, regardless of technical similarity. For example, high-cost chains are not suitable for games and social applications with high economic requirements.

Overall observation

NFT adoption : Although NFT activity may show that tens of thousands of wallets are minted once (such as Piggybox), subsequent usage is extremely low.
Infrastructure : The usage of cross-chain bridges and plug-ins is stable, with high transaction costs (cross-chain bridges) or has low volatility as backend tools (plug-ins).
Difference in transaction mode : The transaction volume of each wallet in different categories varies significantly. Some are highly repetitive operations, while others are "completed in one go".
Project long-tail effect : Many projects have little user participation, which shows that free Gas alone is not enough to stimulate demand; dApps need to provide real value propositions to retain users.

Summary of key points

Account abstraction and Gas sponsorship can indeed increase transaction volume and user registration, but the real test lies in the repeated participation of users. Combining the data on wallet count, Gas abstraction and Gas-free transaction volume, it can be seen that the usage of various categories is often concentrated in a few celebrity dApps or large-scale one-time activities. Projects like Piggybox can quickly make it to the rankings with an almost 1:1 wallet-to-transaction ratio, but when one-time accounts are filtered out, their rankings will drop rapidly. Cross-chain bridge and plug-in solutions show a more stable medium usage, reflecting the actual needs of the ecosystem rather than short-term hype.

The role of ERC-4337 smart wallet

All these trends—Gas-free gaming, seamless DeFi, on-chain specialization—are driven by ERC-4337 smart wallets.
Unlike traditional external accounts (EOA), smart wallets significantly improve user experience through automation, security and flexibility.

What is ERC-4337 smart wallet?

A smart contract wallet (or smart wallet) is a programmable Ethereum account that provides the following features:

✅ Batch Trading: Users can combine multiple operations (such as authorization

transaction on DEX) into a single transaction.

✅ Gas fee abstraction: Users do not need to hold ETH to pay Gas fee; fees can be paid by the sponsor or with other tokens.

✅Mnemonic word security: Users can authenticate through keys, social recovery or multi-factor authentication rather than relying on high-risk mnemonic words.

How does Gas-free transaction work?

When a user initiates a transaction, Paymaster (a dedicated smart contract) can pay Gas fees on behalf of the user or allow the user to pay with any ERC-20 token. This significantly lowers the entry barrier for new users and makes blockchain applications as smooth as Web2 applications.

ERC-4337 Challenge and EIP-7702 Solutions

Although ERC-4337 drives Gas-free trading, it also faces significant adoption challenges that directly lead to the retention issues mentioned above:

Technical barriers : Complex components (such as UserOperations, Bundlers, and EntryPoint contracts) set high barriers for average users and developers.

Cost issue : Although Gas-free transactions are beneficial to users, the cost of implementing a full technology stack is high, and the profitability of the packager will also be affected during Gas fluctuations.

Reliability issues : Network congestion can lead to transaction delays, while complex verification logic adds potential security vulnerabilities.

User experience defects : Multi-chain fragmentation leads to inconsistent wallet experience, hindering seamless cross-chain management.

Summary of key points

Account Abstraction and Gas Sponsorship do effectively increase transaction volume and new wallet registrations, but the real challenge is how to keep users engaged. Data shows:

Many dApps only experience a surge in use in one-time activities (such as NFT casting, airdrops), and have lower long-term retention rates.
A few celebrity projects drive most on-chain activities, while most projects face the dilemma of insufficient actual user needs.
Cross-chain bridges and infrastructure solutions show more stable usage, indicating that they provide real practical value rather than short-term hype.

Although ERC-4337 drives Gas-free transactions and improves user experience, its complexity and cost barriers limit widespread adoption by mainstream users. EIP-7702 fills these gaps in the following ways:

Let EOA support account abstraction
- The core problem of ERC-4337 is to exclude external accounts (EOA, Externally Owned Accounts) and require users to switch to smart contract wallets. EIP-7702 solves this problem by allowing EOA to temporarily adopt smart contract code, enabling it to use Gas sponsorship (such as paying for fees with ERC-20 tokens) and transaction batching (such as completing the authorization and use of ERC-20 in a single transaction). For example, users can now batch-process authorization and consumption of ERC-20 tokens, a common operational process for decentralized exchanges (DEXs) without switching to a smart contract wallet.

As mentioned in the community post, this is especially beneficial for users who love their own external accounts (EOA) and think it is too cumbersome to move assets to new accounts.

Simplify complexity and reduce costs
- Allows EOA to temporarily adopt smart contract functionality, reduces the need for permanent wallet contracts, reduces Gas costs, and reduces dependence on EntryPoints or Bundlers.
Improve efficiency
- The introduction of transaction type 0x04 for batch processing of EOA operations provides a more streamlined alternative to UserOps for ERC-4337.
Optimize infrastructure
- Limit smart contract code to transaction execution, reducing dependency on alternate memory pools and packagers, thus simplifying infrastructure.
Empower developers
- Integrate with ERC-4337, while providing flexible, low-threshold upgrade paths, allowing developers to provide enhanced functionality to users more easily.

ERC-4337 lays the foundation, but EIP-7702 will make smart wallets cheaper, simpler and easier to use, accelerating the next wave of popularization in Web3.