Ethereum has revolutionized the way digital value is transferred and managed through smart contracts and token standards like ERC-20. However, a persistent barrier to mainstream adoption remains: users must hold Ether (ETH) to pay for transaction fees (gas), even when transferring non-ETH tokens such as LikeCoin. This creates friction for users who engage with token ecosystems but aren’t expected to manage cryptocurrency wallets actively.
This article explores Ethereum token payment delegation, a solution that enables users to transfer tokens without owning Ether. We’ll dive into the technical foundations of Ethereum’s architecture, examine the problem of gas fees in user onboarding, and demonstrate how EIP-712 and delegated transactions can unlock seamless, gasless experiences.
Understanding Ethereum’s Core Architecture
Before diving into delegation, it’s essential to understand how Ethereum works under the hood.
What Is a Blockchain?
A blockchain is a decentralized, immutable ledger that records transactions across a distributed network. Each block contains a list of transactions and is cryptographically linked to the previous one, forming a chain. Ethereum extends this concept by introducing smart contracts—self-executing programs that run on the blockchain.
At the heart of Ethereum’s data structure is the Modified Merkle-Patricia Trie, a cryptographic data structure used to efficiently store and verify state changes. Every Ethereum block header includes three trie roots:
stateRoot: Represents the current state of all accounts.transactionsRoot: Contains the root hash of all transactions in the block.receiptsRoot: Stores execution results of each transaction.
These components ensure data integrity and enable lightweight clients to validate operations without downloading the entire chain.
Smart Contracts and the ERC-20 Standard
Smart contracts are written in languages like Solidity and deployed on the Ethereum Virtual Machine (EVM). A foundational example:
pragma solidity ^0.4.0;
contract SimpleStorage {
uint storedData;
function set(uint x) public {
storedData = x;
}
function get() public constant returns (uint) {
return storedData;
}
}This simple contract stores and retrieves a number—demonstrating how logic can be encoded immutably on-chain.
Most fungible tokens on Ethereum follow the ERC-20 standard, which defines a set of functions and events for interoperability:
contract ERC20Interface {
function totalSupply() public constant returns (uint);
function balanceOf(address tokenOwner) public constant returns (uint balance);
function transfer(address to, uint tokens) public returns (bool success);
function approve(address spender, uint tokens) public returns (bool success);
event Transfer(address indexed from, address indexed to, uint tokens);
}Tokens like LikeCoin (LIKE) implement this standard to reward content creators across platforms.
The Problem: Users Need Ether to Transfer Tokens
Despite the elegance of ERC-20, a major usability hurdle exists: every Ethereum transaction requires gas paid in Ether. Even if a user holds only LIKE tokens, they still need ETH to send them.
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For ecosystems like LikeCoin—designed for writers, artists, and casual users—this is problematic. Most participants don’t want to buy or manage ETH. Requiring it introduces complexity, security risks, and friction that hinder adoption.
Core issue: Users cannot interact with token-based systems without first acquiring Ether.
Solution: Payment Delegation via EIP-712
To solve this, developers have turned to transaction delegation, where a third party (e.g., a dApp or service) pays gas on behalf of the user. This is made possible through EIP-712: Typed Structured Data Hashing and Signing.
EIP-712 standardizes the way Ethereum wallets sign structured data, making it safe and readable for users to authorize off-chain messages. These signed messages can then be submitted on-chain by another party who pays gas—enabling gasless transactions.
Implementing Transfer Delegation in LikeCoin
LikeCoin implements delegation using a transferDelegated function:
function transferDelegated(
address _from,
address _to,
uint256 _value,
uint256 _maxReward,
uint256 _claimedReward,
uint256 _nonce,
bytes _signature
) isDelegated(_from, _maxReward, _claimedReward, _nonce) public returns (bool success)Here’s how it works:
- The user signs an off-chain message authorizing a transfer.
The signature includes:
- Sender (
_from) - Recipient (
_to) - Amount (
_value) - Reward cap (
_maxReward) - Nonce (prevents replay attacks)
- Sender (
- A relayer (such as a server or dApp) verifies the signature using
ecrecover. - The relayer submits the transaction and pays gas.
- The contract processes the transfer and optionally rewards the relayer.
A key component is the SignatureCheckerImpl, which validates signatures against typed data hashes:
bytes32 hash = keccak256(
transferDelegatedHash,
keccak256(msg.sender, "transferDelegated", _to, _value, _maxReward, _nonce)
);
return ecrecover(hash, v, r, s) == _from;This ensures only authorized transfers are executed.
Security Considerations and Best Practices
While delegation improves usability, it introduces new concerns:
- Nonce management: Prevents replay attacks by ensuring each signed message is used only once.
- Rate limiting: Avoid abuse by capping rewards or frequency.
- Signature verification: Must use EIP-712 hashing to prevent phishing.
- Relayer trust: Users must trust relayers not to censor or manipulate transactions.
The isDelegated modifier enforces these checks:
modifier isDelegated(address _from, uint256 _maxReward, uint256 _claimedReward, uint256 _nonce) {
require(allowDelegate);
require(_claimedReward <= _maxReward);
require(!usedNonce[_from][_nonce]);
usedNonce[_from][_nonce] = true;
require(_transfer(_from, msg.sender, _claimedReward));
_;
}This ensures safe execution while allowing relayers to be compensated in tokens.
Alternative Approaches: ERC-865
Another proposal, ERC-865, allows users to pay fees in tokens instead of ETH:
function delegatedTransfer(
uint256 _nonce,
address _from,
address _to,
uint256 _value,
uint256 _fee,
uint8 _v,
bytes32 _r,
bytes32 _s
) public returns (bool);While similar in goal, ERC-865 focuses on fee abstraction within the token contract itself. EIP-712-based delegation offers greater flexibility and composability with modern wallet support.
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Frequently Asked Questions (FAQ)
How does EIP-712 improve security over traditional signing?
EIP-712 structures data before signing, so wallets display human-readable content (e.g., “Send 5 LIKE to Alice”). This prevents phishing attacks where users unknowingly sign malicious payloads.
Can any token use payment delegation?
Yes—any ERC-20 token can implement delegation by adding methods like transferDelegated. However, it requires careful smart contract design and integration with relayer infrastructure.
Who pays for gas in delegated transactions?
A relayer—often a dApp backend or dedicated service—submits the transaction and covers gas costs. They may be reimbursed in tokens via _claimedReward or operate as part of a business model.
Is this the same as meta-transactions?
Yes. Delegated transfers are a form of meta-transaction, where user intent is signed off-chain and relayed on-chain by a third party.
Does this work on Layer 2 networks?
Absolutely. In fact, Layer 2 solutions like Optimism and Arbitrum further reduce gas costs, making delegation even more efficient and scalable.
Are there risks for relayers?
Relayers risk financial loss if they pay gas but the transaction fails or gets front-run. Proper error handling, fee modeling, and monitoring are essential.
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Conclusion
Ethereum token payment delegation solves a critical bottleneck in user experience: the need for Ether to perform token transfers. By leveraging EIP-712, projects like LikeCoin enable seamless interactions for non-custodial users—removing onboarding friction while maintaining decentralization.
As blockchain technology matures, features like gasless transactions will become standard in social tokens, gaming economies, and decentralized identity systems. Developers who adopt these patterns today will lead the next wave of accessible, user-centric Web3 applications.
Core Keywords: Ethereum token payment delegation, EIP-712, ERC-20 token transfer, gasless transactions, smart contract delegation, decentralized application usability, meta-transactions