a paymaster is a smart contract defined in the erc-4337 account abstraction standard whose job is to pay gas on behalf of a user. when a smart wallet submits a transaction, the paymaster steps in, covers the gas in native token (eth on most evms), and either eats the cost as a subsidy or charges the user in a different asset like usdc. paymasters are the reason a perp dex can let you trade without ever holding eth.
in plain english
a paymaster is the on-chain equivalent of an app paying for your taxi. you do not have cash on you, but the app has an account with the cab company, and the ride gets paid out of that account. the cab driver still gets paid; you just did not need to handle the money. in crypto, the app pays your gas in eth and your transaction goes through as if you had eth in your wallet.
what paymasters do
the standard defines a few flavors:
- verifying paymaster: app sponsors gas for whitelisted users or actions, no payment from the user.
- token paymaster: user pays gas in an erc-20 like usdc, paymaster swaps and pays the validator in eth.
- erc-20 specific paymasters: pay gas in a single approved token, gas-station style.
- flat-fee paymaster: charge users a flat rate per action regardless of underlying gas cost.
why paymasters exist
the original ethereum model requires every transaction to be paid in eth by the sender. that is fine for power users with eth always topped up. it is terrible ux for everyone else: a brand-new user gets a usdc deposit, opens a wallet, tries to send a tx, and the wallet errors out because there is no eth. paymasters solve that exact problem by separating "who signs the tx" from "who pays the gas."
how it shows up on uponly.win
uponly runs a paymaster on base that sponsors gas for the actions users actually take: depositing into the smart wallet, approving usdc, opening rips on avantis, closing positions. when you tap rip, you sign the intent with your privy-managed signer, and the paymaster pays the base sequencer in eth so your transaction lands. you never need to bridge or hold eth. this is the second half (with smart wallets) of why uponly feels like a normal app instead of a crypto puzzle. for more on the build, see how uponly was built in one night.
common confusions
a paymaster does not give you free transactions in any economic sense. someone still pays gas. on uponly, the app eats the cost as part of the product cost, which works because the platform earns a small variable fee only on winning rips and that revenue covers gas. on other apps, the user pays gas in usdc via a token paymaster. either way, gas is being paid; it is just hidden from the ux.
- paymasters are smart contracts, not centralized services.
- they require erc-4337 (account abstraction) to exist on a chain.
- sponsored gas is an app subsidy; token-paid gas is a user-side conversion.
- paymasters can be turned off if abused (rate limits, whitelists).
see also
- smart wallet definition
- arcade finance definition
- rip uponly terminology
- perpetual future definition
- leverage definition
the cleanest way to see a paymaster in action is to use a product running one. open uponly, deposit usdc, and tap rip. no eth, no bridging, no failed transactions for lack of gas. that is the paymaster doing its job in the background.