Visa, the global payment corporation, is actively exploring the potential of account abstraction on Ethereum’s Goerli testnet. Through the use of a smart contract called paymaster, Visa aims to simplify cryptocurrency transactions and improve user experience.
Visa’s Engagement with Ethereum’s Goerli Testnet
Continuing its partnership with Ethereum, Visa is conducting experiments on the Goerli testnet to explore the concept of account abstraction. By leveraging “Paymaster” smart contracts, Visa seeks to enable seamless payments without the burden of transaction fees.
The deployment of these smart contracts will empower user accounts by expanding their capabilities, enabling wallets to independently execute intricate tasks and handle transaction fees for other accounts. Visa has provided comprehensive details of these tests in their latest report.
The primary objective of these contracts is to enrich the UX on the Ethereum blockchain network by eliminating the need for end-users to possess (ETH) for transaction costs. Moreover, users are given the flexibility to pay fees using any token, presenting a versatile substitute to the conventional fee structure on the Ethereum mainnet, as emphasized in the report.
Visa’s Collaboration with Ethereum and Account Abstraction
Visa’s association with Ethereum began in 2021 when the company announced its intention to settle payments using the USDC stablecoin on the Ethereum blockchain. This groundbreaking initiative established Visa as the first major payment network to utilize stablecoins for settlements.
Account abstraction has garnered significant interest, with Visa expressing its curiosity in a blog post released in December 2022. However, at that time, Ethereum had yet to implement the necessary functionality for account abstraction. Substantial progress was made in March 2023 when developers introduced ERC-4337, a code that facilitated account abstraction on the Ethereum network through specialized smart contracts.
Simplifying Transactions with Paymaster Smart Contracts
Catherine Gu, Visa’s head of CBDC and protocols, highlighted the two core user operations tested during this phase: payment with ERC-20 tokens using the ERC-4337 Paymaster and transaction fee sponsorship for users, also known as gasless transactions, facilitated by the ERC-4337 Paymaster.
Visa’s adoption of the Ethereum blockchain to settle the USDC stablecoin presents opportunities to facilitate convenient and user-friendly stablecoin transactions. In these scenarios, Visa can take on the responsibility of managing transaction fees on behalf of users or provide them with the option to pay using their preferred tokens, such as stablecoins.
According to the report, the Paymasters play a crucial role in the verification stage by evaluating whether to accept a UserOperation. They also implement the necessary fee logic during the execution phase. This enables them to cover the transaction fees for users and allows users to utilize ERC-20 tokens, including dollar-pegged stablecoins, to pay for gas fees.
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