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ERC-4337 Paymaster: Gas Sponsorship Explained

Biconomy provides all paymaster functionality through the MEE (Modular Execution Environment) stack. While this page explains how ERC-4337 paymasters work conceptually, you should use MEE to implement gas sponsorship in your applications—it provides paymaster capabilities plus cross-chain orchestration in a unified interface.
A Paymaster is a smart contract in the ERC-4337 account abstraction standard that pays gas fees on behalf of users. Instead of users needing ETH for gas, the paymaster covers the cost.
Traditional Transaction:
User → pays gas in ETH → Transaction Executed

With Paymaster:
User → signs UserOperation → Paymaster pays gas → Transaction Executed
Paymasters enable:
  • Gasless transactions: Users pay nothing
  • Gas abstraction: Users pay in ERC-20 tokens (USDC, DAI, etc.)
  • Sponsored transactions: Apps cover user gas costs
The paymaster integrates with the ERC-4337 flow:
┌─────────────┐    ┌─────────────┐    ┌─────────────┐    ┌─────────────┐
│    User     │───▶│   Bundler   │───▶│  EntryPoint │───▶│  Paymaster  │
│  (signs     │    │  (submits   │    │  (validates │    │  (pays gas, │
│   UserOp)   │    │   UserOp)   │    │   UserOp)   │    │   verifies) │
└─────────────┘    └─────────────┘    └─────────────┘    └─────────────┘
                                             │
                                             ▼
                                      ┌─────────────┐
                                      │   Account   │
                                      │  (executes  │
                                      │   action)   │
                                      └─────────────┘
Key steps:
  1. User creates and signs a UserOperation
  2. UserOperation includes paymasterAndData field
  3. Bundler submits to EntryPoint
  4. EntryPoint calls validatePaymasterUserOp on Paymaster
  5. Paymaster validates and agrees to pay
  6. Transaction executes
  7. Paymaster’s deposit is debited for gas
Paymaster TypeHow It WorksUse Case
Verifying PaymasterOff-chain signature authorizes sponsorshipApp-controlled sponsorship with policies
Token PaymasterAccepts ERC-20 tokens as gas paymentLet users pay gas in stablecoins
Deposit PaymasterUsers pre-deposit funds for gasEnterprise/institutional use
Sponsoring PaymasterUnconditionally sponsors gasDevelopment, promotions
Biconomy’s MEE provides all these paymaster capabilities:
  • Flexible sponsorship policies
  • Token payment options (pay gas in USDC, DAI, etc.)
  • Spending limits (per transaction, total)
  • Plus cross-chain gas abstraction (pay on any chain with tokens from any chain)
Biconomy provides paymaster functionality through MEE (Modular Execution Environment):Step 1: Get your MEE API key from DashboardStep 2: Initialize MEE client
import { createMeeClient, toMultichainNexusAccount } from "@biconomy/abstractjs";
import { base } from "viem/chains";

const account = await toMultichainNexusAccount({
  signer: userSigner,
  chains: [base]
});

const meeClient = await createMeeClient({ account });
Step 3: Send sponsored transaction
// Get quote with sponsored gas
const quote = await meeClient.getQuote({
  instructions: [
    { calls: [{ to: contractAddress, data: encodedCall }] }
  ],
  feeToken: { address: "sponsored" }  // Gas sponsored via MEE
});

// Execute gasless transaction
const { hash } = await meeClient.executeQuote({ quote });
MEE handles all gas sponsorship automatically based on your dashboard configuration.
Configure policies in the Biconomy Dashboard or via API:Per-Transaction Limit:
{
  "policy": {
    "transactionLimit": {
      "maxSpendUsd": 5
    }
  }
}
Total Spending Limit:
{
  "policy": {
    "globalLimit": {
      "maxSpendUsd": 1000
    }
  }
}
Spending limits help you control costs and prevent abuse:Per-Transaction Limits:
  • Set maximum gas cost per individual transaction
  • Prevents unexpectedly expensive operations from draining your balance
Total Limits:
  • Set an overall spending cap
  • MEE automatically stops sponsoring once the limit is reached
Configure both limits in the Biconomy Dashboard for optimal cost control.
MEE supports paying gas in ERC-20 tokens (gas abstraction):
import { createMeeClient, toMultichainNexusAccount } from "@biconomy/abstractjs";
import { base } from "viem/chains";

const account = await toMultichainNexusAccount({
  signer: userSigner,
  chains: [base]
});

const meeClient = await createMeeClient({ account });

// Get quote with token payment
const quote = await meeClient.getQuote({
  instructions: [
    { calls: [{ to: contractAddress, data: calldata }] }
  ],
  // User pays gas in USDC instead of ETH
  feeToken: {
    address: "0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48", // USDC
    chainId: base.id
  }
});

const { hash } = await meeClient.executeQuote({ quote });
MEE supports cross-chain gas payment - pay for gas on any chain using tokens from any other supported chain!Supported gas payment tokens vary by chain. Common options:
  • USDC
  • USDT
  • DAI
  • WETH
Check supported gas tokens for the full list.
Biconomy Dashboard provides:
  • Real-time gas spending
  • Contract interaction breakdown
  • Spending trends over time
API Access:
// Get usage statistics
const stats = await fetch(
  "https://api.biconomy.io/v1/mee/stats",
  {
    headers: { "x-api-key": API_KEY }
  }
).then(r => r.json());

console.log(stats);
// {
//   totalTransactions: 15420,
//   totalGasSponsored: "1.234",  // ETH
//   uniqueUsers: 3250,
//   topContracts: [...],
//   dailyTrend: [...]
// }
Set up alerts:
// Configure spending alerts in dashboard
const alertConfig = {
  dailySpendThreshold: "$50",
  unusualActivityThreshold: "200%",
  lowBalanceThreshold: "0.01 ETH",
  notificationChannels: ["email", "slack"]
};
1. Set per-transaction limits:
{
  "policy": {
    "spendingCaps": {
      "perTransaction": "$5"
    }
  }
}
2. Set total spending caps:
{
  "policy": {
    "spendingCaps": {
      "total": "$1000"
    }
  }
}
3. Monitor for abuse:
  • Watch for unusual patterns
  • Set up anomaly alerts
  • Review spending regularly in the dashboard
Common failure scenarios and handling:
ScenarioCauseSolution
”Sponsorship validation failed”Policy rejectedCheck spending limits
”Insufficient sponsorship balance”Low balanceTop up deposit in dashboard
”Spending limit exceeded”Transaction or total limit hitAdjust limits in dashboard
”Quote expired”Quote too oldGet fresh quote
Implement fallback logic:
async function sendWithFallback(instructions) {
  try {
    // Try sponsored first
    const quote = await meeClient.getQuote({
      instructions,
      feeToken: { address: "sponsored" }
    });
    return await meeClient.executeQuote({ quote });
  } catch (error) {
    if (error.message.includes("sponsorship")) {
      // Fall back to user-paid gas (in tokens)
      console.log("Sponsorship unavailable, user pays gas in USDC");
      const quote = await meeClient.getQuote({
        instructions,
        feeToken: { address: USDC_ADDRESS, chainId: base.id }
      });
      return await meeClient.executeQuote({ quote });
    }
    throw error;
  }
}

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