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Visa, the global payment network, has announced a new experimental solution that aims to simplify the process of paying gas fees on Ethereum transactions. Gas fees are the costs associated with executing smart contracts and transferring tokens on the Ethereum blockchain. They are paid in ether (ETH), the native cryptocurrency of Ethereum, and they fluctuate depending on the network congestion and demand.

Visas solution, dubbed Visa Gas Fee Manager, is a middleware layer that connects Visas existing payment infrastructure with Ethereum nodes. The idea is to allow Visa clients, such as merchants, banks, and fintechs, to pay gas fees using fiat currencies or stablecoins, instead of ETH. This way, they can avoid the hassle of acquiring and managing ETH, as well as the volatility and unpredictability of gas fees.

The key component of this solution is a paymaster a specialized smart contract. This is not a new concept for Visa, as theyve previously explored this avenue, according to Mustafa Bedawala, staff product manager at Visa. The paymaster functions as a sponsor for gas fees on user contract accounts, making it possible for users to pay onchain gas fees directly through their Visa card without needing to handle native blockchain tokens.

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This is a new and expanded experimental solution from the prior one in which we are accepting fiat and covering onchain fees on behalf of users using our offchain solution. It will simply appear to users in the same way that regular card-based payments are made for their onchain fee cost, Bedawala

According to Visa, the Gas Fee Manager works as follows:

Visa clients send their Ethereum transactions to Visas Gas Fee Manager, along with their preferred payment method for gas fees (e.g., USD, USDC, etc.). Visas Gas Fee Manager estimates the optimal gas fee for each transaction based on the current network conditions and the clients preferences (e.g., speed, cost, etc.). Visas Gas Fee Manager pays the gas fee in ETH on behalf of the client, using a pool of ETH that Visa maintains and replenishes periodically. Visas Gas Fee Manager charges the client for the gas fee using their preferred payment method, at a fixed rate that is determined at the time of the transaction.

Visa claims that this solution can offer several benefits for its clients, such as:

Simplifying the user experience and reducing the friction of using Ethereum-based applications and services. Enabling more use cases and innovation on Ethereum, such as decentralized finance (DeFi), non-fungible tokens (NFTs), and digital identity. Enhancing the scalability and efficiency of Ethereum transactions, by optimizing gas fees and reducing network congestion. Providing more transparency and predictability of gas fees, by locking in the rate at the time of the transaction.

Visas Gas Fee Manager is currently in an experimental stage and is being tested with a select group of partners. Visa plans to expand the availability of the solution in the future, as well as to support other blockchain platforms that have similar gas fee mechanisms. Visa also intends to integrate its Gas Fee Manager with its other blockchain-based solutions, such as Visa B2B Connect and Visa Crypto APIs.

Visas Gas Fee Manager is part of Visas broader vision to become a bridge between the traditional and digital economies, and to enable more interoperability and innovation across different payment networks. Visa has been actively exploring and investing in blockchain and cryptocurrency technologies since 2015, and has recently announced several initiatives and partnerships in this space, such as:

Enabling Visa cardholders to buy and sell cryptocurrencies through platforms like Crypto.com, BlockFi, Fold, and ZenGo. Allowing Visa merchants to accept cryptocurrencies as a form of payment through providers like Coinbase, BitPay, and Wirex. Supporting the issuance and adoption of stablecoins, such as USDC, which are digital currencies that are pegged to fiat currencies or other assets. Collaborating with leading blockchain platforms and protocols, such as Ethereum, Circle, ConsenSys, MakerDAO, Compound, Chainlink, and Anchorage.

Visa initially expressed its interest in account abstraction in a blog post in December 2022. However, at that time, the functionality for account abstraction had not been implemented on Ethereum. Subsequently, in March 2023, developers made significant progress and introduced ERC-4337, code that enabled account abstraction on Ethereum through specialized smart contracts.

Visa believes that blockchain and cryptocurrency technologies have the potential to transform the future of money and commerce, and to create new opportunities for businesses and consumers around the world. With its Gas Fee Manager solution, Visa hopes to make it easier and more accessible for its clients to leverage the power and potential of Ethereum.

Meanwhile, Polygon Labs, a leading blockchain development platform, has announced a strategic partnership with Meroku Protocol V2, a decentralized application (DApp) store kit that enables developers to create and deploy DApps on multiple blockchains. The partnership will allow Polygon Labs to integrate Meroku Protocol V2s features and functionalities into its own DApp store kit, which is designed to provide a seamless and user-friendly experience for both developers and end-users of DApps.

Meroku Protocol V2 is a cross-chain DApp store kit that supports Ethereum, Binance Smart Chain, Polygon, Solana, and other popular blockchains. It offers a variety of tools and services for DApp development, such as smart contract templates, code verification, security audits, governance modules, and analytics. By leveraging Meroku Protocol V2s technology, Polygon Labs will be able to offer its DApp store kit users more options and flexibility in choosing their preferred blockchain platform, as well as access to a wider network of DApp users and communities.

Meroku Protocol V2 allows anyone to create, trade, and redeem synthetic assets without the need for intermediaries, centralized exchanges, or custodians. Synthetic assets are tokens that track the price of any underlying asset, such as stocks, commodities, currencies, or even other cryptocurrencies.

Meroku Protocol V2 consists of three main components: the Meroku Token (MRK), the Meroku Vault, and the Meroku Exchange. The MRK token is the native utility and governance token of the protocol. It is used to pay fees, stake as collateral, and vote on protocol upgrades and parameters. The Meroku Vault is a smart contract that holds the MRK tokens staked by users as collateral for minting synthetic assets. The Meroku Exchange is a decentralized exchange (DEX) that enables users to swap synthetic assets with each other or with MRK tokens.

To create a synthetic asset, a user needs to deposit MRK tokens into the Meroku Vault and specify the type and amount of the synthetic asset they want to mint. The protocol then calculates the required collateralization ratio (CR) based on the volatility and liquidity of the underlying asset and the current MRK price. The CR is the percentage of MRK tokens that must be locked in the vault relative to the value of the synthetic asset. For example, if the CR is 150%, a user needs to deposit $150 worth of MRK tokens to mint $100 worth of a synthetic asset.

The user then receives the synthetic asset in their wallet and can trade it on the Meroku Exchange or any other DEX that supports it. The synthetic asset tracks the price of the underlying asset through an oracle service that provides real-time price feeds to the protocol. The user can also redeem their synthetic asset at any time by burning it and withdrawing their MRK collateral from the vault.

The protocol charges a minting fee and a redemption fee for creating and redeeming synthetic assets. These fees are paid in MRK tokens and are distributed to MRK stakers as rewards for providing collateral to the protocol. The protocol also charges a trading fee for swapping synthetic assets on the Meroku Exchange. This fee is paid in the synthetic asset being traded and is used to buy back and burn MRK tokens from the market, creating deflationary pressure on the MRK supply.

Meroku Protocol V2 aims to provide a scalable, secure, and user-friendly platform for accessing any asset in the world through synthetic tokens. By leveraging the power of decentralization, smart contracts, and oracles, Meroku Protocol V2 enables anyone to create exposure to any asset without intermediaries, censorship, or counterparty risk.

The partnership with Polygon Labs will also enable both parties to collaborate on research and development of new features and innovations for the DApp ecosystem, such as interoperability, scalability, and usability. Polygon Labs and Meroku Protocol V2 share a common vision of empowering developers and users with the best tools and resources for building and using DApps. Through this partnership, they aim to accelerate the adoption and growth of the decentralized web.

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Visa Unveils Experimental Solution to Abstract Away Gas Fees ... - Tekedia