What if you could use any token —like USDT, ATOM, or OSMO—to pay gas fees across Cosmos chains without needing to hold the specific native token for each chain? Sounds like a game-changer, right? This is exactly what the Gas Pool Mechanism aims to achieve. It’s designed to make Cosmos more user-friendly , efficient , and liquid by removing barriers for users and improving the overall experience of interacting with Cosmos-based blockchains.
Why Do We Need This? (The Problem)
Right now, Cosmos chains require users to hold native tokens just to pay gas fees. While this system works, it creates several challenges:
- Barrier for new users : Newcomers need to acquire the native token of a chain before they can even make a transaction. This adds unnecessary friction for onboarding.
- Expensive & complex bridging : Moving native tokens across chains can be costly, slow, and complicated, especially when dealing with multiple chains.
- Fragmented liquidity : Gas fees are locked in different assets across chains, reducing overall efficiency and liquidity.
- Bad UX for cross-chain DeFi : Users end up juggling multiple tokens just to cover gas fees, which creates a poor user experience and slows down adoption.
How It Works (The Solution)
This proposal introduces a Cross-Chain Gas Fee Circulation System , powered by a Gas Pool Module . Here’s how it works in simple terms:
Pay gas fees with any token : Whether you’re holding USDT, ATOM, or OSMO, you can use it to pay gas fees.
Real-time token swaps : The system automatically converts your chosen token into the required native token using liquidity providers like Osmosis.
Validators still get paid in native tokens : Validators continue to receive their rewards in the native token, ensuring their incentives remain intact.
NFT-based staking for perks : Users can stake tokens or NFTs to gain benefits like fee discounts and priority processing .
Technical Breakdown
Let’s break it down step by step:
1. Gas Pool Module
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Think of this as a shared liquidity pool where users deposit their preferred tokens to pay gas fees.
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The module automatically converts these tokens into the native gas token whenever needed.
2. Fee Matching Algorithm
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This algorithm matches the token you want to use (e.g., USDT) with available liquidity in the pool.
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It ensures there’s always enough native token liquidity to pay validators.
3. Automated Token Conversion
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The system uses on-chain decentralized exchanges (DEXs) like Osmosis or Gravity DEX to swap tokens in real time.
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Safeguards are in place to prevent issues like high slippage or insufficient liquidity.
4. Collateralized Gas Vault
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Users can stake tokens or NFTs to access perks like fee discounts and faster transaction processing.
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This also acts as a safety net for validators, ensuring they’re compensated even if the value of the deposited tokens fluctuates.
5. Real-Time Exchange Rate Monitoring
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The system relies on oracles like Chainlink or Band Protocol to fetch the latest token prices.
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This prevents situations where users try to pay with tokens that have suddenly lost value.
Benefits for Cosmos
Here’s what this system brings to the Cosmos ecosystem:
Seamless Multi-Chain Experience : No more worrying about acquiring native tokens for gas. Just use what you already have.
Higher Cross-Chain Activity : With fewer barriers, more users will engage in cross-chain transactions, boosting adoption.
Better Liquidity Utilization : Gas fees flow smoothly across chains, improving overall liquidity.
Validator Payment Security : Validators are guaranteed to receive their rewards in the native token, maintaining the health of the network.
NFT-Based Incentives : Staking NFTs unlocks perks like reduced fees and priority processing, adding another layer of engagement.
Implementation Plan
Here’s how we’ll roll this out:
Develop the Gas Pool Module : Integrate this module into the Cosmos SDK to handle multi-token gas payments.
Design & Test the Fee Matching Algorithm : Ensure the system efficiently matches user payments with available liquidity.
Integrate with DEXs : Partner with platforms like Osmosis and Gravity DEX for seamless token conversions.
Launch a Testnet : Run a testnet to gather feedback from validators, developers, and users.
Security Audits & Mainnet Deployment : Finalize audits and propose deployment on the mainnet.
In Summary
The Gas Pool Mechanism is a forward-thinking solution to one of the biggest pain points in the Cosmos ecosystem: the need to hold native tokens for gas fees. By allowing users to pay with any token , automating conversions, and ensuring validators are still rewarded, this proposal makes Cosmos more accessible, efficient, and user-friendly. Plus, the added perks of NFT-based staking create exciting opportunities for deeper engagement within the ecosystem.
This isn’t just an upgrade—it’s a step toward making Cosmos the most user-friendly blockchain ecosystem out there.