Scalability, being one among the main hindrances within the defi applications, has created huge barriers to entry. Due to the lack of scalability and network congestion, the amount of fee to be paid by the transaction holders has become huge. Alternatively, users now search for the solution that improves the decentralized finance ecosystem and makes it more usable and accessible.
What is the solution to such a problem?
Meta transactions allow different users to do transactions on the public blockchain with zero transaction fees. It builds a more seamless UX since users don’t need to understand the inner workings of various blockchain platforms and gas fee dynamics.
Meta transactions are quite almost like regular blockchain transactions but they have to possess proxy contracts as an addition that’s referred to as relayer. Meta transactions use the cryptography where users got to sign the transaction and authenticate it. A serious difference here is, the transaction is managed by the relayer, who pays the gas and completes the transaction by sending it to a receiving address.
Several developers can leverage the meta transactions that will significantly offer a far better user experience to the users and different DeFi applications. Such a feature would bring the crypto and decentralized finance ecosystem to the highest level which will offer a seamless user experience while accessing the Defi Platforms and web 3.0.
Meta transaction is the gasless transaction that allows several users to interact with different decentralized applications that have a public key and the private key.
How does it work?
To do a meta transaction, an ethereum user must initiate the transaction just like the standard transaction on the ethereum platform and sign it with its private key. But rather than sending it to on-chain users, it should send it to a relayer who does the further transactions.
Relayer is that tool or a service that’s willing to pay a gas fee. So, whenever the transaction is hit on the on-chain, it’ll use a ‘proxy’ smart contract which will validate the signature and ensure that it works properly. The most important advantage of this mechanism is that there’s always a node or relayer that’s interested in covering all the gas costs with its funds.
Relayers do not run any charity, what they are doing is that they charge in the contract who is the recipient and obtain the fees back with some extra fees for the services offered.
Gas Station Network
A decentralized network of various relayers is understood as a gas station Network. Different users can build decentralized applications but without any need to pay gas. Different relayers work on the gas payment of the transaction that assists different dApps to work without any hindrance.
What are the various sorts of Meta transactions?
Relays are of two types: centralized Relays and Decentralized Relays.
Centralized Relays are an array of relays or one relayer who facilitates the meta transactions using the proxy contracts. Being centralized, it causes the contradiction for decentralization finance and it can cause one point of failure.
Decentralized relays are the perfect solution that watches the transaction pools and works like secondary miners. Relayers are capable of processing one transaction, hence the relayer validates the foremost profitable transactions.
How does a gas station Network work?
A Gas station takes the gasless transactions from the users, and different relayers within the GSN sign the transactions and return it to users. A sensible contract like Relayhub acts because of the relays who facilitate the transactions between the smart contracts and relays.
Meta transactions aim to scale back the complexities of the transactions by making it a gasless transaction. it offers a good range of advantages for the users while onboarding on the online 3.0 applications.
Meta transactions have the potential to become the common practice to create a decentralized application. The most use case of meta transactions is for decentralized finance. Relayers and meta transactions have mostly reduced the hindrances caused within the use of decentralized finance.