Refuting Ethereum's claim of "abandoning" ETH: What does it mean to pay gas without using ETH?

Author: imToken

If you're involved in on-chain transactions, you've likely encountered these awkward situations:

Received stablecoins in a new address, but when trying to transfer them out, a pop-up window popped up saying there was no ETH to pay the gas; wanted to exchange coins on a DEX but got stuck; withdrew USDC from a trading platform only to realize you hadn't prepared the gas.....

All of these situations force you to find fiat currency channels elsewhere or beg others to transfer some "water" (equity), which is arguably the most classic scene of discouraging newcomers in the crypto world.

Recently, Vitalik Buterin mentioned the progress of EIP-8141 (Frame Transactions), once again bringing new possibilities to the forefront: in the future, even without ETH in your wallet, you can directly transfer funds, and the gas can be deducted directly from USDC. Some applications, in order to attract users, might even simply cover your gas.

The news quickly escalated into a alarming claim: "If we don't need ETH to use Ethereum anymore, what value will ETH have?" The answer isn't that simple. What users use to pay fees and what the Ethereum protocol ultimately uses to settle fees are two completely different things. First, what does it mean to not use ETH to pay gas? Let's start with a typical Ethereum transaction today. For example, Frank has 1000 USDC in his wallet and wants to transfer 100 USDC to a friend, but if he doesn't have ETH in his wallet, the transaction cannot be sent. The reason is simple: the current logic of ordinary Ethereum accounts is very rigid. The person initiating the transaction is also responsible for paying the network gas—Frank's signature, Frank's initiation of the transaction, and Frank's ETH balance paying the gas are essentially tied together. EIP-8141 aims to break these three things down. According to the current design, a Frame Transaction can be broken down into multiple different "Frames," each responsible for verifying the transaction, confirming who pays the gas, and actually executing the user's action. Therefore, in the future, when Frank makes a transfer, he can still sign to prove "this 100 USDC is indeed what I want to transfer," but another Paymaster or account will use ETH to pay the gas to the Ethereum network on Frank's behalf, and Frank will then use a small amount of USDC to pay the fee to this Paymaster. For Frank, all he might see is a transfer of 100 USDC and a network fee of 0.1 USDC. Throughout the process, he doesn't even need to know the ETH gas cost or prepare ETH beforehand. However, from the Ethereum protocol's perspective, it doesn't mean "Ethereum starts accepting USDC as gas." It simply means someone in the background pays Frank's gas with ETH and then settles the payment with him in USDC. The official ERC-20 payment example provided by EIP-8141 uses a similar structure. The Sponsor is responsible for approval and bears the gas, while users transfer ERC-20 tokens to the Sponsor as payment. This is easier to understand if compared to real-life consumption. When we use a RMB credit card in Japan, the user perceives a "RMB deduction," while the merchant may receive Japanese Yen. However, this doesn't mean the underlying settlement currency in Japan has become RMB. The front-end payment asset and the back-end settlement asset can be different things.

EIP-8141 essentially does a similar abstraction. Ultimately, users no longer need to hold ETH themselves; other accounts can pay the ETH gas on their behalf, and then use assets such as USDC to complete the fee settlement.

The two may seem to differ by only a few words, but their meanings for ETH are completely different.

II. Why does Ethereum insist on "hiding" the gas?

In fact, "not needing to prepare ETH yourself" is not a completely new idea. ERC-4337's introduction of Account Abstraction and Paymaster already allows smart accounts to implement Gas Sponsorship, enabling applications to pay transaction fees on behalf of users or allowing users to bear the fees using stablecoins. However, while ERC-4337 can do this, it primarily adds a separate infrastructure of UserOperation, Bundler, EntryPoint, and Paymaster outside the protocol. EIP-8141, on the other hand, attempts to integrate these capabilities more natively into the Ethereum transaction structure itself. Ultimately, the core issue is to solve a problem that should have been addressed long ago: why should ordinary users need to understand what Gas is? In real life, if you transfer 200 yuan to a friend via WeChat, WeChat will never pop up a window asking you to "buy 2 yuan worth of clearing tokens from another platform first." But crypto has always been this frustrating. On Ethereum, you need to prepare ETH; on Solana, you need to exchange for SOL; on the BNB Chain, you need to accumulate BNB. Even when switching to a new L2 blockchain, the first reaction is to check if you have enough initial capital in your wallet. Experienced users might be able to handle this in two minutes by crossing chains, but for outsiders, it's a formidable barrier that can make them immediately close the webpage and leave. Besides hiding gas fees, frame transactions can also solve many other persistent problems. For example, when trading a new token on a DEX, you have to click "Approve" to authorize, then "Swap," and confirm twice via wallet pop-ups. If the latter "Swap" fails, the former authorization remains on the chain for a long time, leaving the risk of theft. If we use Frames, these two things can be packaged into an atomic batch: if the swap fails, the previous authorizations are automatically rolled back cleanly. This involves a much larger scope for imagination; who will authorize, who will execute, who will pay, and what verification methods will be used can all be broken down and recombined. Third, is this good or bad news for ETH? This is also the area where this discussion is most likely to go to two extremes. One argument is, "If you don't need to use ETH to pay gas in the future, ETH will have no value," while another argument is, "Lowering the user threshold and causing a surge in transaction volume is a huge boon for ETH." Regarding major architectural changes affecting the user experience of the underlying protocol, it's still difficult to draw definitive conclusions. However, one thing is certain: EIP-8141 has not eliminated ETH's role as the underlying gas and fee settlement asset for Ethereum. Users may not be aware of ETH, but Paymaster, applications, or other accounts responsible for paying on behalf of users still need to be able to handle network fees denominated in ETH. The existing EIP-1559 fee market has not been replaced by stablecoins due to Frames. What has changed is the position of ETH demand. Today, there might be a million users, each keeping a small amount of ETH in their wallets for gas payments; in the future, it might become a small number of Paymasters, wallet service providers, and applications holding larger ETH balances, then handling gas payments for a large number of ordinary users. Of course, don't naively assume that "every time a user pays in stablecoins, the backend will buy the equivalent amount of ETH at market price on the secondary market." Payment intermediaries have their own inventory management and hedging strategies, making it difficult to directly translate into the instant buying power that retail investors fantasize about. Paymaster can prepare inventory in advance, replenish its reserves dynamically, and use other fund management methods. Therefore, it's difficult to directly deduce the magnitude of new ETH buying simply because "stablecoins can be used to pay gas in the future." The real key to success lies in one thing: Does the improved user experience ultimately lead to more real demand for Ethereum, and can it actually increase the overall market size? Let's do the math: If in the past 100 people planned to enter the market, and 70 of them were bogged down by gas purchases, Gwei calculations, and cross-chain issues, ultimately only 30 people completed their transactions; If in the future wallets handle all these hassles in the background, allowing 80 people to smoothly complete their transactions—even if they don't have a single ETH—the actual ETH consumed and destroyed by the network will be far greater than before; Conversely, if the entire ecosystem doesn't bring any incremental activity and merely replaces "paying out of pocket" with "having someone else pay," then it certainly won't generate any new incremental value.

In conclusion

From the author's perspective, it weakens the requirement that "every user must accumulate some ETH in advance to use Ethereum," but it bets that once this barrier disappears, more people will actually start using Ethereum.

For ordinary users, there's certainly no need to change their usage habits because of this EIP, but from the perspective of wallet development, the direction it points to is already very clear.

A truly user-friendly wallet in the future will likely require users to understand gas fees beforehand. Users will be responsible for deciding where their assets will go and what operations they will perform; the wallet will inform them of the risks and the final cost. The complex protocol details—which account to use for payment, whether to use ETH or stablecoins for billing, and whether available gas sponsors—should gradually be hidden in the background. Truly mature infrastructure often operates in this manner.