Gas Sponsored Swaps

Overview

Gas sponsored swaps allow users to execute token swaps without needing to hold native blockchain currency for gas fees. This is typically done using smart contract accounts or signature-based transactions (e.g., CoWSwap) where transactions are executed on behalf of the user.

Blink's gas sponsored swap solution enables transactions directly from Externally Owned Accounts (EOAs) that lack sufficient native currency to cover gas fees.

How It Works

Blink utilizes bundles / block sequencing to facilitate gas sponsored swaps for EOAs. When a user initiates a swap but lacks the required gas, a small amount of native currency is transferred to their address before their transaction in the same block. This allows them to complete the transaction.

Note that while the below example references swaps when the swap fee is greater than X, Blink can in reality configure any transaction to be "Gas Sponsored" including non-swaps or swaps where the fee is less than X.

One use case we've encountered for gas sponsored transactions is when a user moves assets from a Centralised Exchange to a wallet for the first time and doesn't have the native currency. Blink can sponsor the user's first transactions to create a seamless UX when they land on-chain.

Bundled Gas Sponsored Swap Process

1. Blink detects when a user does not have enough native currency to execute a swap.

2. We simulate the transaction to determine the swap fee and notional USD value.

3. If the swap fee meets or exceeds the gas cost threshold, a small amount of native currency is transferred to the user's wallet.

4. The user executes the swap using the provided gas.

5. The wallet benefits from a seamless user experience and earns additional swap fee revenue.

Gas Sponsored Swap Flow

Gas Transfer Thresholds

Since transferring gas incurs a cost, Wallets can configure parameters to ensure gas is only transferred if the swap fee is greater than or equal to the gas cost. This helps optimize costs and ensures efficiency in gas allocation.

Gas Sponsored Swap Which Exceeds Threshold

Let's run through the image above as an example.

• A user wants to make a $100,000 USDC swap but does not have sufficient gas

• The Wallet has an associated Swap Fee of 0.5%

• This will result in $500 worth of revenue for the Wallet if the swap is executed

• The gas fee to make this swap is $5 worth of the native currency

• Since $500 > $5 (swap fee > gas cost) Blink will execute the gas sponsored swap for the user

• The Wallet net revenue for this swap will be $495 after factoring in the cost of the gas

Benefits

• Improved User Experience: Users no longer need to manually acquire native currency to complete swaps, reducing friction and increasing transaction completion rates.

• Additional Wallet Revenue: Gas sponsored swaps enhance swap volume, generating more fee revenue for the wallet.

• Zero Tech Lift for Customers: Blink fully manages the gas sponsored swap process, requiring no additional integration effort from customers.

• Customer UX Enhancements: Wallets can incorporate user-friendly features such as "We sponsored your gas" messaging to highlight the seamless experience.

Implementation

• No additional technical integration is required from customers.

• Blink manages gas detection, fee validation, and gas transfer automatically.

• Wallet providers can optionally add UX elements to highlight the gas sponsorship feature.

Blink's gasless swap solution simplifies user transactions, enhances the swapping experience, and increases revenue opportunities for wallets—all with zero integration effort required.