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  • Chainlink Introduces Payment Abstraction on Ethereum to Simplify Fee Payments
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Chainlink Introduces Payment Abstraction on Ethereum to Simplify Fee Payments

Jane Kariuki 1 April 2025
Chainlink LINK Image via Cryptonewsfocus.com

Chainlink Cryptonewsfocus.com

  • Chainlink has launched its Payment Abstraction system on the Ethereum mainnet, allowing users to pay for services with various assets like stablecoins and gas tokens, which are automatically converted into LINK via Uniswap.
  • This feature is initially applied to the Chainlink Smart Value Recapture (SVR) service and aims to enhance user experience and economic sustainability within the network.

Chainlink has taken a significant step forward in simplifying transactions within its ecosystem by launching the Payment Abstraction system on the Ethereum mainnet. This new feature promises to enhance user experience by offering a seamless way to pay for Chainlink services with various assets, including gas tokens and stablecoins, which are automatically converted into LINK via Uniswap.

Simplifying Payments with LINK

Previously, users had to rely on specific tokens to pay for services within the Chainlink ecosystem. With the introduction of Payment Abstraction, the payment process has become more flexible, allowing payments to be made with multiple assets. This move is designed to reduce friction and make it easier for users to access Chainlink services without the need to worry about conversion or compatibility issues.

The system works by converting any payment made through gas tokens or stablecoins into LINK, streamlining the process for both the users and the network. Uniswap plays a crucial role in this by handling the automatic conversion, ensuring that users can use a variety of tokens without needing to manually exchange them for LINK.

Chainlink Smart Value Recapture (SVR)

The Payment Abstraction system is initially applied to Chainlink’s Smart Value Recapture (SVR) service, which allows users to recapture liquidation Miner Extractable Value (MEV) in decentralized finance (DeFi). Aave, one of the first platforms to integrate with Chainlink SVR, is already benefiting from the new system. It enjoys a discounted revenue split, with 65% of the recaptured fees going to the Aave community and 35% allocated to the Chainlink ecosystem.

This partnership not only highlights the utility of the Payment Abstraction system but also strengthens the broader DeFi ecosystem by providing a way for platforms to optimize their revenue generation while contributing to the sustainability of the Chainlink network.

Future Plans for Economic Sustainability

Chainlink’s ultimate goal is to enhance the economic sustainability of its network. Currently, the SVR fees help cover oracle rewards for node operators. However, as Chainlink continues to evolve, these fees will be transitioned to LINK stakers once Chainlink Staking secures the node set responsible for powering SVR services. This transition marks an important milestone in Chainlink’s effort to make LINK the Universal Gas Token, further solidifying its role in the blockchain ecosystem.

With these updates, Chainlink is not only improving user experience but also laying the foundation for a more sustainable and versatile network. The introduction of Payment Abstraction is a clear indicator that Chainlink is dedicated to staying at the forefront of innovation in blockchain technology.

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