VeChain Introduces Fee-Delegation As A Service (DaaS), Enabling Seamless Mass Adoption of dApps and Creating New Business Opportunities

Peter Zhou
Jan 15 · 5 min read
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Users, when using public-blockchain-based decentralized applications (dApps), are typically responsible for two things:

  1. Signing transactions using their private keys to invoke smart contract functions, and
  2. Paying crypto for their transactions to be executed and included in the public ledger.

The second responsibility requires users to be able to acquire and manage crypto, endure the volatility associated with the crypto market as well as navigate potentially variable transaction costs. Such issues make the mass adoption of dApps difficult and so far, have proven a significant hindrance to the entire blockchain space.

At VeChain, we strongly believe that a public blockchain should serve as an infrastructure layer and not be directly exposed to the users of applications running on it. As an analogy, if Amazon users were asked to pay for computational resources any time they placed an order, it would significantly impact the usability of the platform by placing constraints on users.

Looking at the wider blockchain space, interaction with blockchain-based dApps (e.g., signing a transaction) without possessing crypto assets seems impossible. Even if people do find some kind of solution (e.g., the Ethereum GSN), it tends to be expensive and technically inefficient. In contrast, VeChainThor natively supports such functions thanks to the fee delegation protocol, particularly the VIP-191 protocol. In summary, VeChainThor allows someone else to pay the gas fee of your transaction on your behalf, removing a significant adoption hurdle.

However, having the fee-delegation protocol alone is far from enough to turn VeChainThor into a dApp powerhouse. Accordingly, we are pleased to formally introduce a new infrastructure-level module we call Fee-Delegation as a Service (DaaS).

  • DaaS allows projects to hide the complexity of paying transaction costs from their users entirely, significantly improving the user experience and making them more able to be mass adopted.
  • It will make it possible to pay any VeChain Ecosystem token for transaction gas fees on VeChainThor, potentially creating genuine demand for the token and relevant DeFi services.

How It Works

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In this new arrangement, communication between the dApp and the DaaS module is now standardized by the newly proposed VIP-201. It is a communication protocol that allows any dApp and DaaS service provider to seamlessly work together, as long as they both apply the protocol. DaaS can be run by the same team that runs the dApp, or by a dedicated third-party service provider.

Example

To allow the game to be mass adopted, we need to expand the user base to reach people who have very little knowledge of crypto and blockchain. Without DaaS, users first need to learn a long list of things about blockchain before they can even start to play the game.

With DaaS, the game now looks like a normal online game, with in-game points and a marketplace — something highly familiar to millions of people across the world. Individuals can acquire the project’s native tokens through, for instance, game cards or airdrops and start to play right away. Moreover, they are guaranteed to own their in-game assets (NFTs) thanks to the immutable nature of VeChainThor’s public blockchain.

Looking Ahead

In general, we expect more and more applications to take advantage of DaaS to facilitate the expansion of their user bases far beyond the crypto world. A natural outcome of increasing demand for DaaS services will be the existence of dedicated DaaS service providers, as illustrated below. Service providers will not only provide various options (e.g., acceptable tokens, rates, etc.) for using their services, but themselves generate genuine demand for DeFi services to acquire VTHO and maximize their own profits.

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Development

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