I want to know what this para means, more clearly and with more detail.

" Theoretically, Ethereum-based token systems acting as sub-currencies can potentially include another important feature that on-chain Bitcoin-based meta-currencies lack: the ability to pay transaction fees directly in that currency. The way this would be implemented is that the contract would maintain an ether balance with which it would refund ether used to pay fees to the sender, and it would refill this balance by collecting the internal currency units that it takes in fees and reselling them in a constant running auction. "

  1. To whom does it refund the ether?

  2. To whom is the txn fee paid?

  3. Please explain that para using plain and easy english so that I & even a 10 year old kid can understand.

1 Answer 1

  1. The user interacting with the token contract will receive a refund.

  2. The miners receive the transactions fees.

  • can you please say why will it refund ether to the user? My understanding is that if the user pays txn fee in the currency/token system he is using, and this fee is paid to the miner then where does this extra ether(((which is refunded to the user))) come from? May 25, 2021 at 10:53
  • 1
    @DStarLet'sExplore A contract has balance so they can refund their users without manual intervention (someone has to previously deposit ether in the contract). The exercise is mostly theoretical, it is possible but I haven't seen a contract do it. The most common approach is to give the users a token reward.
    – Ismael
    May 25, 2021 at 15:36

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