Gas sponsorship is no longer a nice-to-have: with ERC‑4337 paymasters and 7677 web services, DeFi teams can remove “not enough gas” friction, cut drop‑offs, and convert more order flow while keeping unit economics tightly controlled. This post shows how to implement production‑grade gas sponsorship (v0.7/0.8), what it costs post‑Dencun on L2s, and how 7Block Labs ships it with measurable GTM outcomes.

Title: Gas Sponsorship: How to Pay Gas Fees for Your Users via Paymasters

Audience: DeFi teams focused on conversion, Gas optimization, and reliable on‑chain execution.

Pain — the specific technical headache

• Your swap/bridge/claim flows die on “not enough gas.” Coinbase Wallet observed that 69% of Ethereum swaps encounter a not‑enough‑gas error at start, nuking conversion on retail order flow. (prnewswire.com)
• You tried “gasless” once, but hit real constraints: unstable bundler inclusion, opaque paymaster rules, and unpredictable L2 fees.
• Engineering reality: migrating accounts and paymasters across EntryPoint versions (0.6 → 0.7/0.8), keeping up with ERC‑7562 validation rules, and implementing ERC‑7677 paymaster web services without vendor lock‑in is distracting your core product roadmap. (alchemy.com)

Agitation — why this risk compounds

• Missed revenue: every “insufficient gas” error is an abandoned cart in DeFi. If 40–70% of first‑time users fail at checkout, your CAC payback and routing share suffer.
• Deadline risk: the ERC‑4337 stack evolved quickly. EntryPoint v0.7 repacked UserOperations and added penalties; v0.8 tweaked unused‑gas behavior and introduced a “Simple7702Account” to align with EIP‑7702. Shipping against moving targets without a plan leads to rollbacks and partner escalations. (github.com)
• Ops blast radius: poorly designed paymasters are slashable, doxx your budget via predictable patterns, and can get THROTTLED/BANNED by bundlers under ERC‑7562 reputation rules—causing silent non‑inclusion right when you run a promo. (docs.erc4337.io)
• Budget shock: post‑Dencun, L2 data costs dropped 75–95% via EIP‑4844 blobs—great for users, but also means your gas‑sponsorship unit cost is now low enough to scale, so finance will ask for hard ROI and per‑wallet caps before approving GTM. (investopedia.com)

Solution — 7Block Labs’ methodology for production paymasters

We implement “budget‑aware gasless” for DeFi by aligning three layers: on‑chain contracts (paymaster/account), off‑chain policy (ERC‑7677 web service), and infra (bundler, MEV protection), mapped to your P&L.

1. Architecture that maps to business controls

• Contract layer (v0.7/0.8 ready)
  • Paymaster built on BasePaymaster from the official ERC‑4337 repo, configured for PackedUserOperation (v0.7+) with explicit paymaster gas limits and post‑op limits. We enforce deterministic validation to pass ERC‑7562 and bundler simulations. (github.com)
  • Two patterns out of the box:
    • Sponsorship Paymaster (you pay the gas) with per‑user, per‑method, and per‑chain caps.
    • ERC‑20 Paymaster (user pays in USDC/other tokens) with price oracle checks and slippage bands—compatible with Pimlico/Alchemy/CDP flows. (docs.pimlico.io)
• Off‑chain policy (ERC‑7677 capability)
  • We expose a standards‑compliant pm_getPaymasterStubData / pm_getPaymasterData API so wallets can request sponsorship or ERC‑20 quotes, and we return version‑correct fields (v0.6 vs v0.7 paymaster gas fields). This removes vendor lock‑in and lets you rotate providers. (eips.ethereum.org)
• Infra layer (bundler and routing)
  • Multi‑provider bundler strategy (Alchemy, Candide, Etherspot) with failover, ERC‑7562 reputation monitoring, and optional private‑route MEV protection on supported networks. We target v0.7 as default and validate v0.8 on your chains for future‑proofing. (alchemy.com)

1. Versioning playbook (so you don’t stall migrations)

• EntryPoint addresses and detection
  • v0.7 singleton address: 0x0000000071727De22E5E9d8BAf0edAc6f37da032 across major EVMs. v0.6: 0x5FF137D4b0FDCD49DcA30c7CF57E578a026d2789. We auto‑detect the account’s interface (UserOperation vs PackedUserOperation) to select the right flow. Providers are deprecating 0.6 over 2026—plan your staged cutover now. (alchemy.com)
• EIP‑7702 coexistence
  • If you leverage 7702 “smart EOAs” for batching approvals+swaps, we integrate Simple7702Account where relevant, while keeping 4337 paymasters for sponsorship. Result: native‑feeling UX without breaking your gas policies. (etherspot.io)

1. Security hardening to avoid griefing and hidden costs

• Deterministic validatePaymasterUserOp (no SSTORE, no blockhash, bounded gas) and slashing‑aware staking/deposit ops via EntryPoint. We treat paymaster deposits as “working capital,” with alerts when projected bundle cost exceeds deposit to avoid EREP‑010 throttling. (docs.erc4337.io)
• ERC‑7562 compliance testing in CI: we replay validation under varied baseFee/timestamps, track inclusionRate, and auto‑pause risky policies. (eips.ethereum.org)
• Latest packing and signature hygiene: for v0.7+ we use separate paymaster gas fields; for newer stacks we support “paymaster signature” appendage so account and paymaster can sign in parallel without hash‑mismatch footguns. (hackmd.io)

1. Gas optimization on L2s (where the ROI is now obvious)

• After Dencun’s EIP‑4844, L2s like Base/OP/Arbitrum reduced data availability costs dramatically (often 75–95%), bringing typical per‑op sponsorship into low‑cents. We size your Gas Tank by scenario (e.g., claim + swap campaigns) and bake in penalties/overestimates noted in v0.7/v0.8 so your budget doesn’t drift. (investopedia.com)

1. Procurement‑ready controls

• Hard per‑user and per‑day caps, method‑level allowlists, chain routing policies, and evented webhooks for “budget used” with human‑readable SKUs (e.g., “gas for mint_v1 on Base”).
• Vendor strategy: we prefer standards (ERC‑7677, ERC‑7769) to keep your options open; where you require hosted services, we implement dashboard‑managed gas tanks (e.g., Biconomy) with programmatic deposits and withdrawal controls. (ercs.ethereum.org)

Practical, current examples

Example A — Sponsoring a swap+settle flow on Base (v0.7)

• Goal: reduce “approve + swap” abandonment.
• Flow:
  1. Wallet requests sponsorship via EIP‑5792 capability including paymasterService (ERC‑7677). (eips.ethereum.org)
  2. Our service returns stub data with correct paymasterVerificationGasLimit + paymasterPostOpGasLimit for v0.7 and a policy token in the 7677 context (e.g., policyId=“swap_v1_base”). (eips.ethereum.org)
  3. Bundler simulates, we sign paymaster data, and user signs their UserOp; we route to a bundler with private submission/MEV protection where available. (alchemy.com)
• Why it works now: post‑Dencun L2 fees are low; v0.7 cleans up gas penalties and postOp estimation; ERC‑7677 avoids SDK‑specific lock‑in. (investopedia.com)

Example B — ERC‑20 Paymaster taking USDC for gas on Arbitrum

• Use Pimlico/Alchemy’s ERC‑20 paymaster semantics so the user pays fees in USDC while your app never forces ETH top‑ups. Oracle‑guarded quotes, stable token lists, and UI‑safe maxFee exposures via 7677 metadata. (docs.pimlico.io)

Reference Solidity snippet (v0.7‑style PackedUserOperation)

// SPDX-License-Identifier: MIT
pragma solidity ^0.8.20;

import "@account-abstraction/contracts/core/BasePaymaster.sol";
import "@account-abstraction/contracts/core/Helpers.sol"; // for _packValidationData
import "@account-abstraction/contracts/interfaces/PackedUserOperation.sol";

contract PolicyPaymaster is BasePaymaster {
    // Simple policy: sponsor only whitelisted targets + method selectors within a spend cap
    mapping(address => bool) public targetWhitelist;
    uint256 public perUserDailyCapWei;

    constructor(IEntryPoint ep, uint256 cap) BasePaymaster(ep) {
        perUserDailyCapWei = cap;
    }

    function setTarget(address target, bool allowed) external onlyOwner {
        targetWhitelist[target] = allowed;
    }

    // v0.7 requires paymaster-specific gas limits in the UserOp and a PackedUserOperation
    function _validatePaymasterUserOp(
        PackedUserOperation calldata userOp,
        bytes32 userOpHash,
        uint256 /*maxCost*/
    ) internal view override returns (bytes memory context, uint256 validationData) {
        // 1) Deterministic, bounded checks only (ERC-7562): no SSTORE, no external reads unless staked
        (address target, bytes4 selector) = _decodeCall(userOp.callData);
        if (!targetWhitelist[target]) {
            return ("", _packValidationData(true, 0, 0)); // signature failure => reject
        }
        // 2) Encode a minimal context for postOp accounting (only if staked entity rules allow)
        // Note: unstaked paymasters face extra 7562 constraints (e.g., context rules); stake in production.
        context = abi.encode(userOp.sender, target, selector);
        // 3) Time-bounded validity (useful for budget windows)
        uint48 validUntil = uint48(block.timestamp + 1 hours);
        uint48 validAfter = uint48(block.timestamp - 60); // tolerate small clock skew
        validationData = _packValidationData(false, validUntil, validAfter);
    }

    function _postOp(PostOpMode mode, bytes calldata context, uint256 actualGasCost)
        internal
        override
    {
        // Deterministic and gas-bounded accounting only; avoid on-chain loops
        (address sender,,) = abi.decode(context, (address, address, bytes4));
        // Production: enforce perUserDailyCapWei using compact structs and a time-bucketed mapping
        // Note: Keep postOp light; you pay for it. v0.7 penalties apply for bad gas estimation.
    }

    function _decodeCall(bytes calldata callData) internal pure returns (address target, bytes4 selector) {
        // For SimpleAccount-style execute: calldata = abi.encodeWithSelector(execute.selector, target, value, data)
        // Adjust if using a different account ABI
        if (callData.length >= 4) {
            selector = bytes4(callData[0:4]);
        }
        // parse "target" from callData offset; omitted for brevity (varies by account)
        return (address(0), selector);
    }
}

• Key details this enforces:
  • Deterministic, bounded validation to satisfy ERC‑7562. (eips.ethereum.org)
  • v0.7 PackedUserOperation and separate paymaster gas limits. (hackmd.io)
  • Minimal context for postOp; stake the paymaster for any non‑trivial logic per 7562 rules. (docs.erc4337.io)

Best emerging practices we apply in 2026

• Prefer ERC‑7677 capability flows in wallets over vendor‑specific SDKs; standardize pm_* RPC and pass policy via the context object. This reduces lock‑in and simplifies audits. (eips.ethereum.org)
• Monitor ERC‑7562 reputation (opsSeen vs opsIncluded) for your paymaster/factory; alert before THROTTLED/BANNED status. Bake in chain‑specific MIN_STAKE_VALUE/unstake delays. (eips.ethereum.org)
• Adopt v0.7 today; plan v0.8 in a feature branch. v0.7 introduces a 10% unused‑gas penalty and other changes developers often miss in testing; v0.8 relaxes penalties under small thresholds and aligns with 7702. (github.com)
• MEV protection where available (private route to builders) for sponsored UserOps; several bundlers expose MEV‑protected lanes. (alchemy.com)
• Split budgets by SKU: treat “approve+swap” vs “claim” vs “bridge” as separate cost centers; ERC‑7677 context makes this traceable for finance/procurement. (eips.ethereum.org)
• Keep a second provider warmed: Candide/Alchemy/Stackup/Pimlico endpoints with health checks and automatic failover. (docs.candide.dev)
• For ERC‑20 paymasters, ensure token payment metadata in 7677 responses (tokenAddress, maxFee) and simulate postOp to avoid UI‑quote drift. (docs.base.org)
• Track evolving “paymaster signature” conventions on newer ERC‑4337 versions to parallelize signing safely. (docs.erc4337.io)

Costing it — realistic budgets post‑Dencun

• Data point: EIP‑4844 blobs cut L2 posting cost by ~75–95%, pushing typical swaps and claims into low‑cents. That’s why gas sponsorship is now financially attractive for acquisition and reactivation flows. (investopedia.com)
• Planning heuristic we use with DeFi clients:
  • Unit cost (UC) per sponsored action on Base/OP: $0.02–$0.10 depending on calldata size and concurrency; include v0.7 unused‑gas penalty headroom. (github.com)
  • Conversion lift: eliminate the “not enough gas” error on first action; 0x/CBW report 69% of swaps hit that friction—your potential recovery ceiling. (prnewswire.com)
  • ROI model: ROI ≈ (Recovered volume × take rate) – (UC × actions). We instrument this per SKU with on‑chain events keyed to 7677 policy IDs.

Go‑to‑market proof points (what we measure)

• Conversion: reduce “insufficient gas” cancels on first swap by 30–60% in first 30 days, depending on your user mix—benchmarked against the 69% friction stat. (prnewswire.com)
• Reliability: >99% successful inclusion for sponsored UserOps on target L2s with ERC‑7562‑clean validation and deposit headroom logic; we alert before EREP‑010 throttling. (eips.ethereum.org)
• Cost: keep blended UC within pre‑approved envelopes post‑Dencun; finance receives daily cap usage and “gas SKU” reports by chain. (investopedia.com)

Where 7Block Labs fits

• Strategy to ship: We scope, build, and operate your paymaster stack with clear business controls.
  • Smart contract engineering, audits, and versioning plans via our smart contract development and security audit services.
    • See: smart contract development and security audit services
  • End‑to‑end DeFi UX with gasless flows, ERC‑7677 capability wiring, and bundler integrations.
    • See: DeFi development services and dApp development
  • Integration to your existing stack (custody, KYC partners, analytics) and cross‑chain routing.
    • See: blockchain integration and cross‑chain solutions
  • If you need net‑new primitives (bridges, token rails), we handle that too.
    • See: custom blockchain development services

Implementation checklist (copy/paste for your sprint board)

• Decide EntryPoint target: v0.7 across the board; branch v0.8 for future (7702‑aware) features. Detect account type by validateUserOp signature (UserOperation vs PackedUserOperation). (alchemy.com)
• Stand up ERC‑7677 paymaster web service with pm_getPaymasterStubData/Data and policy‑driven context; keep keys server‑side. (erc7677.xyz)
• Implement Sponsorship Paymaster with deterministic validation and minimal context; stake the paymaster to unlock safe state reads; enforce per‑user/day caps in postOp. (docs.erc4337.io)
• Wire at least two bundlers; enable private routing/MEV protection where available; add health‑based failover. (alchemy.com)
• Add CI: ERC‑7562 rule replay, inclusionRate alerts, deposit vs. pending‑bundle gas checks (EREP‑010), and “unused gas penalty” guardrails on estimates. (eips.ethereum.org)
• Pilot on a low‑fee L2 (Base/OP/Arbitrum); instrument events with policy IDs; align finance reporting with SKU tags.
• Expand to ERC‑20 paymaster (USDC) once UX telemetry stabilizes; expose acceptedTokens in 7677 responses; simulate postOp with quotes. (docs.base.org)

FAQ — the pragmatic bits your team will ask

• Which networks are ready today? Major EVM L2s (Optimism, Base, Arbitrum, Polygon) are supported by leading bundlers/paymasters; we configure per your routing. (alchemy.com)
• Do we need our own bundler? Not initially. We start with reputable hosted bundlers (with MEV protection) and add self‑hosted when scale or compliance requires. (alchemy.com)
• What if we’re still on v0.6? We migrate your accounts and paymasters with a staging window; vendors plan to deprecate 0.6 support during 2026, so put it on the calendar. (alchemy.com)
• How does 7702 affect this? 7702 enables smart‑EOA batching; we keep 4337 paymasters for sponsorship and pair them with 7702 accounts where it helps UX. (etherspot.io)

Bottom line

• When you remove gas friction the right way—standards‑first (ERC‑7677/7562), version‑aware (v0.7/0.8), and budget‑controlled—you trade a few cents of UC for recovered order flow. With post‑Dencun L2 costs and modern bundlers, that trade pays. (investopedia.com)

CTA for DeFi

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Notes and references

• EntryPoint v0.7 release notes and singleton address; provider guidance and v0.6 deprecation window. (github.com)
• EIP‑4844/Dencun impact on L2 costs. (investopedia.com)
• ERC‑7677 paymaster web service capability and wallet capability flows (EIP‑5792). (eips.ethereum.org)
• ERC‑7562 validation/reputation rules and EREP‑010 deposit checks. (eips.ethereum.org)
• Bundler networks and MEV‑protected lanes. (alchemy.com)
• 0x/CBW metric on “not enough gas” errors in swaps. (prnewswire.com)

If you need deeper integration (bridges, tokenized rewards, or custom settlement), our team can extend the same standards‑first approach across your stack: web3 development services, DeFi development, and cross‑chain solutions.