Two months ago, Trust Wallet, one of the most widely used self-custody wallets for cryptocurrencies, rolled out a gas sponsorship feature. This allows people to trade tokens on the network without having to first own the network’s fuel currency. For example, you can exchange tokens without doing anything. $ETH It aims to make it easy for anyone to start using decentralized apps and services.
Typically, to do something on a blockchain (like a swap token), you have to pay a small fee using that particular network’s own cryptocurrency. This fee, called “gas,” is sent to the computers that process and secure your transactions.
For approved swaps, the app will automatically pay for your gas as long as you follow a few rules.
- This can be done up to 4 times a day
- Works with Ethereum, BNB Chain, and Solana
- Swaps must meet a minimum dollar amount that varies by network (approximately $50 for Ethereum)
But what are the hidden costs?
The wallet pays the user’s transaction fees. That is, Trust Wallet simply collects this fee using special funds that are likely to be paid by business partners, sponsors, or their own reserves.
This approach naturally leads people to wonder if it can last forever and who will really pay for it in the long run.
Even though transaction fees are free, it does not mean that there are no fees for exchanging tokens. The trade itself, unlike gas fees, can be subject to price slippage and unfavorable rates from the trading platform. Trust Wallet’s app displays applicable network fees, but users pay the final price offered by the decentralized exchange for their trades.
Last year’s upgrades to the Ethereum network (such as EIP-7702) allowed users to pay transaction fees in a variety of tokens, not just tokens. $ETH. Many wallets are starting to support such payments, including Trust Wallet.
However, this change also raises big questions about how the rules and economics of the system will work if the primary currency is not always used to pay operating costs.
Also, some users may think that “no native tokens required” means the swap is completely free, but that is not the case. Sponsorship means you don’t have to hold on to any of the following, for example: $ETH Put it in your wallet to pay for yourself.
To maintain user trust, it is critical that wallets be open about who is paying these fees and whether they can continue to pay them.
Related: Trust Wallet confirms security issue in extension v2.68 after wallet leak
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