BatPay: a gas efficient protocol for the recurrent micropayment of ERC20 tokens
This addresses the scalability problem for micropayments in digital markets and reward distributions on Ethereum, offering a domain-specific incremental improvement.
The paper tackles the high gas cost of ERC20 token micropayments on Ethereum by introducing BatPay, a protocol that bundles operations and uses a challenge game to reduce verification costs, achieving a gas reduction of three orders of magnitude and around 1700 transactions per second.
BatPay is a proxy scaling solution for the transfer of ERC20 tokens. It is suitable for micropayments in one-to-many and few-to-many scenarios, including digital markets and the distribution of rewards and dividends. In BatPay, many similar operations are bundled together into a single transaction in order to optimize gas consumption on the Ethereum blockchain. In addition, some costly verifications are replaced by a challenge game, pushing most of the computing cost off-chain. This results in a gas reduction of the transfer costs of three orders of magnitude, achieving around 1700 transactions per second on the Ethereum blockchain. Furthermore, it includes many relevant features, like meta-transactions for end-user operation without ether, and key-locked payments for atomic exchange of digital goods.