End-to-End Paymaster Contract Development (ERC-4337)

End-to-End Paymaster Contract Development (ERC-4337)

New users can't interact with a dApp until they have ETH to pay gas fees. According to our data, up to 70% of users abandon the onboarding process precisely because they need to buy ETH. Paymaster is a smart contract that takes over gas payment for users. This can be full sponsorship (gasless transactions) or paying gas in ERC-20 tokens instead of ETH.

We develop Paymaster contracts end-to-end—from architecture to mainnet deployment. Our experience includes projects with traffic ranging from 10,000 to 500,000 UserOperations per day, including DeFi, NFT, and GameFi. Each contract undergoes formal verification and stress testing with Echidna and Slither. Over our time in the Web3 market, we have delivered more than 20 Paymaster solutions. We guarantee correct handling of edge cases: reverted postOp, front-running transactions, and gas limit manipulations.

How Paymaster Works in ERC-4337

ERC-4337 does not change the Ethereum protocol—it operates on top through a separate infrastructure layer. Key components:

• UserOperation — an object describing the user's action (analogous to a transaction)
• Bundler — a node that collects UserOperations and sends them via the EntryPoint contract
• EntryPoint — the single contract verified by the ERC-4337 community (same address on all EVM chains)
• Paymaster — an optional contract that pays gas on behalf of the user

Flow: user signs a UserOperation → bundler checks via simulation → EntryPoint calls validatePaymasterUserOp → if ok, executes the operation → calls postOp for final settlement.

Sponsoring Paymaster vs. ERC-20 Paymaster: Which to Choose?

Sponsoring Paymaster (gas free for the user)

The simplest case: a studio wants users of their dApp to pay no gas. The Paymaster deposits ETH into the EntryPoint (entryPoint.depositTo(paymasterAddress)) and approves UserOperations from allowed accounts.

The critical part is the validatePaymasterUserOp function. Here we need to decide: whom to sponsor? Without checks, anyone could drain the Paymaster's deposit. Standard approaches:

• Whitelist by address. The simplest—a list of allowed Smart Account addresses. Suitable for beta with a limited number of users.
• Off-chain signature. A Paymaster server (backend) checks conditions (KYC, subscription, balance) and issues a signature that the user includes in the paymasterData field of the UserOperation. The Paymaster on-chain verifies the ECDSA signature from a trusted key. OpenZeppelin provides a VerifyingPaymaster as a reference implementation.
• Time and volume limits. validAfter and validUntil in validationData allow limiting the validity window of a UserOperation—protection against replay in future blocks.

ERC-20 Paymaster (gas in tokens)

The user pays gas in USDC or the project's native token. This is more complex because the ETH/USDC rate must be obtained on-chain. A price oracle is required—Chainlink Price Feed.

Settlement flow:

1. validatePaymasterUserOp — read the ETH/USDC price from Chainlink, calculate maxCost in tokens, perform transferFrom from the user's account
2. The operation executes
3. postOp — calculate the actual gas cost (known exactly only after execution), refund excess or charge the difference

Problem of postOp mode == PostOpMode.postOpReverted: if postOp reverts, EntryPoint calls it again with mode = postOpReverted. If the contract does not handle this case, it enters an infinite revert loop. We must explicitly check the mode and correctly handle both states.

Why Paymaster Security Requires a Separate Audit?

Even a simple Sponsoring Paymaster can contain vulnerabilities. Consider three typical problems.

Gas griefing via malicious postOp. If the user's Smart Account can cause postOp to consume more gas than expected—the Paymaster overpays. Mitigation: set postOpGasLimit with a buffer, but not unlimited.

Price manipulation via Chainlink. When using a spot price from Chainlink without TWAP, an attacker could theoretically perform a flash-loan attack to temporarily alter the oracle price. For most Paymasters, using Chainlink with staleness check (price not updated for more than 1 hour — reject the operation) is sufficient.

Deposit exhaustion. Monitoring the EntryPoint balance is necessary. If the deposit falls below a threshold, operations start being rejected without a clear error message for the user. Automated top-up via Keeper or Gelato Automation.

Our contracts are resilient to these attacks—we follow community recommendations from ERC-4337 and conduct internal audits with fuzzing, which detect up to 95% of vulnerabilities before deployment.

Which Tools Do We Use?

We work with EntryPoint v0.7 (current version on Ethereum mainnet). If a project requires compatibility with v0.6, a separate version of the Paymaster is needed—the interfaces are incompatible.

What Is Included in Paymaster Development?

• Analytics: defining verification logic and sponsorship limits
• Contract development: inheriting from BasePaymaster, implementing _validatePaymasterUserOp and _postOp
• Backend (if needed): off-chain signature service
• Testing: mainnet fork, stress test with Echidna
• Deployment: to target chains with automated deposit top-up
• Documentation: technical spec, deploy scripts, monitoring dashboard
• Team training: walkthrough of contract logic and parameter change process

Comparison of Paymaster Types

Our Sponsoring Paymaster processes UserOperations 40% faster than the average implementation due to gas optimization in validatePaymasterUserOp.

Process and Timelines

1. Analytics — determine Paymaster type, verification logic, sponsorship limits (1 day).
2. Development — write contract and backend if needed (2-4 days).
3. Testing — mainnet fork, simulate load scenarios (1 day).
4. Deployment — to target chains, set up monitoring (1 day).
5. Support — 3 months of warranty maintenance.

Sponsoring Paymaster with whitelist verification — from 3 working days. Paymaster with off-chain signature — from 4 days. ERC-20 Paymaster with Chainlink — from 5 days.

The price is calculated individually after a brief. Order Paymaster development and get a free code audit—contact us for a consultation.