Blockchain platform VeChain recently introduced what it’s calling Fee-Delegation As A Service (DaaS), which has been designed to enable the “seamless mass adoption” of decentralized applications (dApps) and will support the development of new business opportunities as well.
As noted by the VeChain Foundation in a blog post, users, when using public (or permissionless) blockchain-enabled dApps are usually responsible for signing digital transactions using their private keys in order to invoke various smart contract functions, and also paying crypto for their transactions (which is executed and included in the public distributed ledger).
Paying digital currency for transactions “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,” VeChain explained. The Foundation pointed out that these types of issues can make the mass adoption of dApps quite challenging and have proven to be a major hindrance to the blockchain sector.
The VeChain Foundation added:
“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.”
When looking at the wider crypto and blockchain sector, interaction with blockchain or distributed ledger tech (DLT)-powered dApps (for instance, signing a transaction) without actually possessing digital assets “seems impossible,” VeChain noted. It also mentioned that even if users do manage to find some type of solution (for example, the Ethereum GSN), it can be costly and “technically inefficient.”
The VeChain Foundation pointed out that “in contrast, VeChainThor natively supports such functions thanks to the fee delegation protocol, particularly the VIP-191 protocol.” The Foundation further noted that VeChainThor lets someone else pay the gas fee of your cryptocurrency transactions on your behalf, potentially “removing a significant adoption hurdle.”
But having the fee-delegation protocol by itself is “far from enough to turn VeChainThor into a dApp powerhouse.” That’s why the VeChain Foundation confirmed that they’re launching a new infrastructure-level module, called Fee-Delegation as a Service (DaaS).
As explained in the announcement:
“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.”
According to VeChain, the DaaS module can significantly enhance the user experiences of dApps, including enterprise or gaming related software applications. VeChain also mentioned that even a digital or online wallet can now take advantage of this option 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.”
VeChain further noted:
“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…. Service providers will not only provide various options (e.g., acceptable tokens, rates, etc.) for using their services, but themselves generate genuine demand for (decentralized finance) DeFi services to acquire VTHO and maximize their own profits.”
(For more details on this update, check here.)