<aside> ⚠️ Why not to use your protocol’s native token as your rollup’s gas token, the exceptions that prove the rule, and a potential alternative for token value accrual.
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At Conduit, we’ve been lucky to talk to hundreds of teams and protocols about launching their own rollup. The most common ask we get is:
Can we allow our users to pay for gas using our native token?
These are our answers ⬇️
If you map out the token flows, there won’t be any net demand. Users buy your token to bridge to your rollup. When they spend gas, the sequencer sells those tokens to try to cover data availability (DA) costs, which are only priced in ETH.
If the gas costs in your token don’t cover the DA costs, then your protocol foots the bill for the remaining DA cost. You are essentially subsidizing usage on your rollup, but still need to pay DA costs in ETH.
In the long run, cross-domain interop and MEV may become the dominant revenue model for rollup sequencers¹. By forcing users of your rollup to acquire your token, you make it harder for builders/searchers to extract MEV on your chain. Instead of holding one token (ETH) they would need to hold N tokens across N rollups, significantly complicating their token inventory strategy.