A Sponsored Transactions dApp#
In this tutorial, you are going to get familiar with how to implement a sponsored transaction mechanism in a smart contract, how to sign messages in a wallet and verify the signature in the smart contract, how to send a transaction from a back-end server to the blockchain, and how to connect your Concordium Wallet for Mobile via walletConnect to the frontend.
The dApp consists of three components that you will explore as part of this tutorial:
A smart contract that verifies signatures.
A frontend that requests the user (sponsoree) to sign messages.
A backend that has access to a wallet (sponsor) and sends transactions to the blockchain.
What are sponsored transactions?#
Sponsored transactions are a mechanism for a sponsor address (third-party) to submit a transaction to a smart contract on behalf of a sponsoree account (user/client). The user/client should sign its intended action in the Concordium Wallet for Web (or Concordium Wallet for Mobile that uses WalletConnect) to authorize the third-party to execute a specific action on its behalf. After the user/client signed its action, the signature is communicated to the third-party. The third-party account (invoker to the smart contract) pays for the transaction fees and submits the transaction on-chain. The signature is verified in the smart contract to ensure the action was authorized by the user/client.
What are the use cases of sponsored transactions?#
Sponsored transactions are a useful tool for third-party service providers to onboard conventional clients/users that don’t want to acquire crypto (such as CCD) from an exchange. The third-party can have a traditional fiat channel open (off-chain) with the conventional clients/users to charge for its service of offering to submit transactions on behalf of the user on-chain.The third-party service provider has its own wallet funded with some CCD at the backend to submit the user’s transaction on-chain. The third-party pays the transaction fee to execute the transaction on-chain.
What is the difference between a normal transaction vs. a sponsored transaction?#
A normal transaction sent to a smart contract is signed by the user’s wallet and authorizes the blockchain to subtract the transaction fee from the user’s wallet as well as to execute a specific action. For example, the action could be to transfer some tokens from the user’s address to another address.
The user creates a normal transaction by signing its account address, its nonce, and the action. The nonce increases sequentially every time the user sends a transaction to the blockchain to prevent replay attacks. The nonce is of type u64 (8 bytes) and by design >= 1.
A sponsored transaction decouples the transaction fee authorization (third-party wallet) from the action authorization (user’s wallet).
The user signs a message (in that case the prepend is account address and 8 zero bytes) to authorize the action. Hence, the 8 zero bytes ensure that the user does not accidentally sign a valid transaction. This means the red signature is not a transaction, while the black signature is a valid transaction in the image below. The user’s signature is sent to the back-end server.
The third-party creates a valid transaction at the back-end server, which is sent to the blockchain.
Note
The CIS-3 standard formally defines sponsored transactions.
