Why EIP-7702

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Background

1. Gasless users: the Facilitator pays all on-chain transaction fees
2. Minimal trust: the user only needs to trust the seller, not the Facilitator
3. Simplicity: the seller does not need to deploy complex smart contracts

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Trust issues with traditional Permit approaches

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Approach A: authorize the Facilitator

// ❌ Risky approach
const permit = {
  owner: buyerAddress,
  spender: facilitatorAddress, // authorize the intermediary
  value: amount,
};

• The user must trust the Facilitator not to act maliciously
• The Facilitator can theoretically move funds to any address
• Violates x402’s “minimal trust” principle

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Approach B: authorize the seller — who pays gas?

// ✅ Correct trust model
const permit = {
  owner: buyerAddress,
  spender: sellerAddress, // authorize the seller
  value: amount,
};

• The seller must submit the transaction and pay gas
• Or the seller must deploy a smart contract to handle the payment
• Raises the seller’s technical barrier and cost

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EIP-7702 to the rescue

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What is EIP-7702?

• Via an off-chain signature, an EOA can “delegate” smart contract code
• During the delegation, the EOA behaves like a smart contract
• The delegation can be revoked anytime to restore a normal EOA

// Seller signs a one-time authorization (off-chain, free)
const authorization = {
  chainId: 84532, // Base Sepolia
  codeAddress: "0xSellerWalletContract", // seller wallet contract
  nonce: 0,
};

const signature = await sellerWallet.signTypedData(
  domain,
  types,
  authorization
);

Seller’s EOA (0xSeller123):
  ├─ External: still a normal EOA address
  ├─ Internal: executes smart contract code
  ├─ Capabilities: auto split, access control, etc.
  └─ Revocable: can revert to a normal EOA at any time

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How the seller wallet contract works

1. Receive the user’s Permit authorization (authorized to the seller EOA)
2. Automatically execute transfers (from the user wallet to the seller EOA)
3. Automatically split:
   • 99% to the seller’s beneficiary address
   • 1% as the Facilitator fee

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Full payment flow

Step 1: Seller enables EIP-7702 (one-time)
  Seller → signs delegation → EOA gains seller wallet capabilities

Step 2: User initiates payment (every time)
  1. User requests resource → server returns 402
  2. User generates Permit signature (spender = seller EOA)
  3. User sends signature in the X-PAYMENT header

Step 3: Verification and settlement (every time)
  1. Facilitator receives the payment request
  2. Verifies Permit signature
  3. Submits on-chain tx (Facilitator pays gas)
  4. Seller wallet contract performs auto split

Step 4: Funds arrive (immediate)
  User wallet → Seller EOA → Auto split
     ├─→ 99% → seller beneficiary account
     └─→ 1%  → Facilitator fee

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Key benefits

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1. Zero-custody risk

Funds path: user → seller EOA → auto split
         ↑
         └─ Facilitator never touches funds!

• Facilitator only: submits tx + pays gas
• Funds go directly from user to seller-designated address
• No third-party custody involved

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2. Minimal-trust model

// What the user sees during authorization
permit.spender = "0xSeller123"; // seller address

// Instead of
permit.spender = "0xFacilitator456"; // intermediary address

• The user only needs to trust the seller (natural buyer-seller trust)
• No need to trust the Facilitator or any third party
• Matches user expectations

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3. Fully gasless for users

• All on-chain fees are paid by the Facilitator
• The user only signs (off-chain, free)
• Facilitator is incentivized via fee share (e.g., 1%)

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4. Zero barrier for sellers

No contract deployment: just sign an EIP-7702 authorization
No gas needed: Facilitator sponsors the gas
No technical background needed: as easy as using MetaMask

• One-time setup cost: ~$1–3 (EIP-7702 authorization gas)
• All subsequent payments: zero cost
• Much lower than deploying a contract (~$50–200)

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5. Flexible configuration

• Beneficiary address: where funds finally arrive
• Fee rate: the Facilitator’s share (e.g., 0–5%)
• Trusted Facilitators: whitelist mechanism

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6. Keep EOA identity

The seller remains a normal EOA:
  ✅ Manageable directly via MetaMask
  ✅ Revocable at any time
  ✅ Upgradable to a new wallet contract
  ✅ No need to learn smart contract dev

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Comparison to other approaches

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Suitable scenarios

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✅ Recommended for:

• Support for more tokens/chains/use cases
• Minimal-trust principle (buyer only trusts the seller)
• Desire to incentivize Facilitators (fee sharing)

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