VeChain Introduces Fee-Delegation As A Service (DaaS), Enabling Seamless Mass Adoption of dApps and Creating New Business Opportunities
Users, when using public-blockchain-based decentralized applications (dApps), are typically responsible for two things:
- Signing transactions using their private keys to invoke smart contract functions, and
- 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
The figure below illustrates how we will be able to structure a dApp with DaaS on VeChainThor. The dashed box marks the boundary of the dApp, including both on-chain and off-chain components. Every time a user wants to trigger a smart contract function, the dApp will request the signature of the user. At the same time, it will also send the same data to the DaaS service provider to ask for its signature to pay for the gas fee. Once the dApp collects both signatures, it will assemble a transaction and broadcast it to the VeChainThor network. After the transaction is processed, the smart contract function will be executed and a certain amount of VTHO be deducted from the account of the service provider.
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.
Imagine we have a blockchain-based gaming app that allows users to spend the native tokens of the project on purchasing weapons and armors (which exist as NFTs) to enhance their in-game characteristics. Users can also trade or sell the NFTs they own on the in-game marketplace.
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.
The DaaS module stands to significantly improve the user experiences of dApps, no matter whether enterprise or gaming related. Even a digital wallet can now benefit by turning itself into a DaaS service provider, allowing users to charge a single account to pay for the gas fees of all of their transactions.
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.
VeChain’s core development team has prototyped the DaaS module, pending future release, with the proposal to be released entirely open-source. The development team has also built a new faucet app on the testnet for demonstration purposes. This new faucet allows anyone to claim a fixed amount of testnet VET and VTHO via invoking a smart-contract function without the associated gas fees, allowing anyone to test and develop their own applications more readily. More details on the new faucet and other technical updates will be published in future articles by Lead Scientist, Peter Zhou. Be sure to follow Peter Zhou as well as VeChain Foundation’s official Twitter and Medium to track ongoing developments and news.
VeChain’s appetite for continuous innovation has been nothing short of voracious following the launch of mainnet in 2018. VeChain’s expert technical and development teams have continuously pushed boundaries, pioneering various innovative solutions such as native fee delegation via the multi-party payment protocol, greatly enhanced transaction capabilities with multi-task transactions (MTT), and later this year, the advanced dual consensus mechanism: SURFACE.