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Ethereum: Payment Giant Visa Deploys First Paymaster Smart Contract on ETH Testnet

Thu, 05/18/2023 - 10:47
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Tomiwabold Olajide
Ethereum: Visa deploys first Paymaster Smart Contract on testnet
Ethereum: Payment Giant Visa Deploys First Paymaster Smart Contract on ETH Testnet
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Cuy Sheffield, head of crypto at payment giant Visa, made known on Twitter the deployment of Visa's first paymaster smart contract on the ETH Goerli testnet. This comes as Visa continues to research and experiment with account abstraction and ERC-4337.

"Excited to see Visa deploy our first paymaster smart contract on the testnet as we continue to research and experiment with account abstraction and ERC-4337," Sheffield tweeted.

Raj Parekh, CEO of Portal and previously at Visa Crypto, is excited about the recent advancement, saying: "A Visa-powered paymaster could be a large driver of growth for the ecosystem."

Visa previously proposed a system known as "account abstraction," or AA, wherein smart contracts can be used to enable automated programmable payments on Ethereum.

Visa publishes experiment findings

Visa has published a report on its experiments with ERC4337 (Account Abstraction). On March 1, 2023, ERC-4337 was rolled out to the Ethereum mainnet, adding the ability for smart contracts to transact on behalf of the user.

In this experiment, Visa put together two prototypes that demonstrate potential use cases of a new Paymaster flow: first, using the Paymaster to facilitate the use of ERC20 tokens to pay for gas fees, and second, completely covering the gas fees for a transaction.

In line with this, the Visa team deployed experimental Visa Paymaster contracts on Ethereum's Goerli Testnet.

It demonstrated paying with ERC-20 tokens using ERC-4337 Paymaster via the first Visa Paymaster contract, wherein it explored whether a user can pay transaction fees with alternative tokens, such as a dollar stablecoin or, in the future, even a Central Bank Digital Currency (CBDC).

Visa Head of Crypto Pushes Back on Claims of Cutting off Crypto Partnerships

Another Visa Paymaster contract was deployed, which completely sponsors transaction fees per the second use case.

In a blog post, Visa explains its current experiment with account abstraction, intending to seek out how the current AA paradigm on Ethereum offers creative solutions for dealing with transaction fees. Can users pay Ethereum transaction fees with stablecoins or other ERC-20 tokens, or not pay them at all?

It believes the findings of its experiment may help further mainstream crypto adoption.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.