Technical Reference

Blockchain in Payments

Working principles, network types, consensus mechanisms, DeFi protocols, stablecoins, and CBDCs — a technical guide to blockchain technology and its integration with modern payment infrastructure.

3–5 sXRPL / Stellar finality

$150B+stablecoin supply

130+CBDC projects globally

1M TPSLightning theoretical max

Native ETH Transfers

Ethereum uses an account-based model (not UTXO). An ETH transfer is a transaction from an EOA (Externally Owned Account) to any address, with a value field set in wei (1 ETH = 10¹⁸ wei). Gas cost is fixed at 21 000 gas units.

EIP-1559 Gas Model

Field	Description	Who receives
Base Fee	Protocol-determined, burned each block	Burned ♻
Priority Fee (tip)	Sender-set incentive for validators	Validator
Max Fee	Upper bound sender will pay per gas	Capped spend

Fee formula

effectiveFee = min(maxFee, baseFee + priorityFee) × gasUsed

EIP-681 Payment URI

ETH transfer

ethereum:0x89205A3A3b2A69De6Dbf7f01ED13B2108B2c43e
 @1?value=2014000000000000000

ERC-20 transfer (chainId 1 = mainnet)

ethereum:0xA0b86991c6218b36c1d19D4a2e9Eb0cE3606eB48
 @1/transfer?address=0xRecipient&uint256=5000000

ERC-20 Token Payments

ERC-20 tokens (USDC, USDT, WBTC…) follow a two-step flow when a contract needs to pull funds:

1. User calls approve(spender, amount)

User allows the contract to spend up to `amount` tokens on their behalf. Requires a separate transaction.

2. Contract calls transferFrom(from, to, amount)

The merchant or payment contract pulls the approved amount from the user's account.

3. Transaction confirmed

Both txs must be confirmed. Permit (EIP-2612) can merge approve + pay into one gasless signature.

For direct P2P ERC-20 transfers, transfer(to, amount) is called directly — no approval needed.

EVM Layer-2 Networks

L2 rollups execute transactions off-chain and post compressed proofs to Ethereum mainnet, drastically reducing fees while inheriting L1 security.

Arbitrum OneOptimistic Rollup

Settle: ~1 sec
Withdraw: 7 days (to L1)
Fees: $0.01–$0.50
TPS: ~7000

Optimism / OP StackOptimistic Rollup

Settle: ~2 sec
Withdraw: 7 days (to L1)
Fees: $0.01–$0.30
TPS: ~2000

BaseOP Stack (Coinbase)

Settle: ~2 sec
Withdraw: 7 days (to L1)
Fees: $0.01–$0.20
TPS: ~2000

zkSync EraZK Rollup

Settle: ~1 sec
Withdraw: ~24 h (proof)
Fees: $0.01–$0.30
TPS: ~100 000 (theoretical)

Account Abstraction (EIP-4337)

EIP-4337 introduces UserOperations that allow smart-contract wallets to pay gas in ERC-20 tokens, sponsor fees for users, and batch multiple calls — enabling web2-like UX for crypto payments.

1. UserOperation created

App or SDK builds a UserOp — similar to a transaction but signed by the smart wallet.

2. Bundler collects

A bundler (like Pimlico, Biconomy) aggregates UserOps and submits them on-chain in a batch.

3. Paymaster (optional)

A paymaster contract pays gas on the user's behalf, or accepts ERC-20 tokens as gas.

4. EntryPoint executes

The canonical EntryPoint contract validates and executes each UserOp, calling the user's smart wallet.