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Sponsored Transactions, Protocol 10 Product Update Livesstream

Community Blog

— 7 min read
Sponsored Transactions, Protocol 10 Product Update Livesstream

On March 12, 2026, Concordium CTO Peter Marirosans and Director of Engineering Andy Nelson went live to walk through Protocol 10 and the introduction of sponsored transactions.

On the surface, this is a focused product update. Underneath, P10 is a prerequisite that unlocks several of Concordium's most important strategic directions: frictionless stablecoin payments, x402 agentic payment integration, and a new class of potential future delegation and custody control models, all without smart contracts.

Sponsored transactions remove the last friction point between holding stablecoins and spending them. Via a flexibly extendable header design, Concordium is now positioned for future protocol-level capabilities without repeated structural overhauls. And the implications for x402 are deeper than the presentation itself made explicit: P10 may be what allows Concordium to deliver a unique "smart-contract-less" agentic payment architecture that preserves self-custody by design.

1 Introduction

  • Speakers
    • Peter Marirosans (CTO)
    • Andy Nelson (Director of Engineering)
  • Topic
    • Protocol 10 (P10) product update livestream
  • Format 
    • High-level overview first, then technical deep dive for developers
  • Concordium basics (for new joiners)
    • Layer 1 blockchain
    • Identity at the protocol layer: every account requires verified identity
    • Privacy-preserving: identity data stays on the user's device
  • P10 went live Tuesday 12 March at 10:00 AM GMT
    • First P10 block produced at 10:04
    • Smooth deployment, though the team admits the final seconds always feel tense
  • Protocol history recap
    • P8: Validator stability. Ability to suspend underperforming validators
    • P9: Protocol Level Tokens (PLTs). Tokens issued at the protocol layer, held in self-custody rather than inside smart contracts. Multiple stablecoins issued on Concordium throughout 2025
    • P10: Sponsored transactions (covered in next section)
  • Consistent design philosophy
    • Protocol-level security and self-custody over smart-contract custody

2 Sponsored Transactions — The Core Concept

  • The problem
    • All transaction fees on Concordium are paid in CCD (native token)
    • Users holding stablecoins (dollars, euros, etc.) as PLTs also needed a small amount of CCD to transact
    • This is a blocker for real-world consumer adoption
  • What P10 solves
    • Introduces transaction sponsorship at the protocol level
    • A third party (e.g. a merchant) can sponsor the transaction fees on behalf of the user
  • How it works (high level)
    • Merchant constructs the transaction with the correct amount
    • Merchant pre-sponsors it and sends it to the user's wallet
    • User only signs for the PLT payment (e.g. stablecoins)
    • User never needs to hold or think about CCD
  • Inner Circle
    • Apply for free Inner Circle Membership and get 246 additional words with comments and analysis.

3 What This Means for Adoption

  • Euro-pegged fees
    • Transaction fees on Concordium are pegged to the euro
    • Token price fluctuations do not affect the cost of a transaction
    • Merchants get predictable, stable fee structures
  • Flexible sponsorship design
    • Does not matter who sponsors the transaction
    • Does not matter which party signs first
    • Does not matter who submits it to the chain
    • Both parties (sponsor + sender) just need to have signed
  • The adoption vision
    • Users on-ramp into stablecoins they already understand (dollars, euros, etc.)
    • They spend those stablecoins without ever touching CCD
    • The merchant handles the network fees behind the scenes
    • Peter's long-standing goal: a single "verify and pay" button
  • Merchant implementation
    • Straightforward: just add sponsor signing to the backend signer merchants already need
    • Demo apps and SDKs already available for developers
  • Scope of sponsorship
    • Per transaction, but works for any on-chain transaction type
    • Covers PLT transfers, smart contract interactions, certificate issuance, and more
    • Multiple operations within a single transaction (mint, allow-list, transfer) are all covered under one sponsorship
    • Future-proof: any new transaction type added to the chain will automatically inherit sponsorship capability
  • Inner Circle
    • Apply for free Inner Circle Membership and get 301 additional words with comments and analysis.

4 Card Networks vs. Concordium Fees

  • The card network comparison
    • When you tap a card, there is always a hidden cost running in the background
    • Merchants pay either a percentage or a fixed fee to the card network
    • This has led to surcharges, minimum payment thresholds, and eventually legislation banning those practices in many western countries
  • How Concordium differs
    • One transparent fee, denominated in euros, unaffected by token price fluctuations
    • No card network, no hidden charges, no intermediary taking a cut
    • Significantly lower than traditional card transaction fees
    • $19.95 means $19.95. No magic added on top
  • What backs it all
    • Blockchain-level cryptographic security
    • PLTs held at the protocol level, not inside smart contracts
    • Identity layer embedded in every account
    • Combined: strong foundation for real-world payment use cases
  • Inner Circle
    • Apply for free Inner Circle Membership and get 116 additional words with comments and analysis.

5 New Header Structure & SDK

  • Backwards compatible
    • All existing transaction types still work exactly as before
    • Nothing breaks for developers who built on earlier protocols
  • What changed
    • P10 introduces a second class of transaction with the same payloads
    • The header adds two new fields: an optional sponsor field and a feature-enable field
    • First feature enabled: sponsored transactions
  • Extensibility by design
    • The header structure was deliberately built to support future protocol-level capabilities
    • Adding new functionality will not require a new header version
    • Sponsored transactions are the first use case, more can follow without structural changes
  • Developer experience
    • Abstracted into the SDKs
    • For developers: a minor change to the call to enable sponsorship and specify the sponsor
    • Merchant setup: create an account, fund it with CCD, start sponsoring
  • Inner Circle
    • Apply for free Inner Circle Membership and get 439 additional words with comments and analysis.

6 Typical Merchant Flow

  • Before P10 (old flow)
    • Merchant connects to the customer's wallet and retrieves their address
    • Merchant specifies the amount and token type, calculates the fees
    • Sends an unsigned transaction to the customer's wallet
    • Customer signs and submits
    • Customer pays the PLT amount plus a small CCD fee
  • After P10 (new flow)
    • Same starting point: wallet connection, amount, token, fee calculation
    • Merchant now adds their own address as sponsor and signs the transaction
    • Sends this pre-signed transaction to the customer's wallet
    • Wallet displays the PLT amount and shows the CCD fee as zero, covered by the sponsor
    • Customer signs and submits to the chain
    • Merchant receives the PLT payment, merchant's account is deducted the CCD fee, customer only pays the PLT amount
  • Who submits
    • In the optimal flow, the customer's wallet submits the final transaction to the chain
  • Inner Circle
    • Apply for free Inner Circle Membership and get 239 additional words with comments and analysis.

7 Nonce / Sequence Number Design

  • How sequence numbers work on Concordium
    • Every account transaction carries a sequence number (also called a nonce)
    • On some chains, the number just needs to be higher than the previous one
    • On Concordium, it must be strictly sequential
    • If two transactions arrive out of order, the second one waits until the first is processed
    • This means transactions are never lost, just queued. Safer by design
  • The problem with two accounts
    • Sponsored transactions involve two accounts: the sender and the sponsor
    • If both accounts had to increment their sequence numbers, race conditions become a real risk
    • A merchant processing hundreds or thousands of sponsored transactions could get blocked by sequencing conflicts
  • How P10 solves it
    • The sponsor does not increment their sequence number when sponsoring
    • Only the customer's sequence number is updated
    • The sponsor is simply agreeing to pay the fee, which is why it makes sense for the customer to submit
    • When the sponsor makes their own transactions (e.g. moving PLTs), their sequence number increments as normal
    • Key distinction: this is a transaction sequence number, not a payment sequence number
  • Why this matters
    • Merchants can sponsor at high volume without sequencing bottlenecks
    • No risk of one customer's transaction blocking another's
    • Designed for a fast chain handling high throughput
  • Inner Circle
    • Apply for free Inner Circle Membership and get 227 additional words with comments and analysis.

8 Running Out of CCD / Buffer Management

  • What happens if the sponsor runs out of CCD?
    • The transaction gets rejected. No workaround for that
    • But the mitigating factor is that fees are extremely low and euro-pegged
  • The math
    • A thousand sponsored transactions per day costs roughly 10 euros
    • A hundred euros per week keeps a busy merchant comfortably funded
    • The merchant earns PLT (stablecoin) revenue from every sale, which is spendable currency elsewhere
  • Practical advice for developers
    • Keep a buffer proportional to transaction volume
    • Higher pace means a larger CCD buffer, but the amounts remain small
    • No need to lock up billions of tokens. This is micro-cost territory
  • Inner Circle
    • Apply for free Inner Circle Membership and get 43 additional words with comments and analysis.

9 Use Cases — Gas Stations, Bridges, Parental Controls, Agentic Payments

  • Any account can sponsor
    • Sponsorship is not restricted to merchants or any specific account type
    • Any party can be the sponsor, as long as they are specified in the transaction header
    • A PLT issuer could choose to sponsor all transactions in their token
  • Gas stations
    • An on-chain entity holding CCD that sponsors transactions in exchange for payment in any currency
    • Could even accept value from other chains, enabling cross-chain fee coverage
  • Bridges
    • Bridge operators could let users hold wrapped tokens as PLTs on Concordium
    • The bridge sponsors all CCD fees, so users never need to touch native tokens
  • Delegated spending / parental controls
    • Fund one master account with CCD, create sub-accounts that only hold PLTs
    • The master account sponsors all transactions from the sub-accounts
    • Build business logic on top: approve or veto spending based on amount, destination, or purpose
    • Works for children, employees, or any controlled spending scenario
  • Agentic payments
    • Same logic applies to AI agents: fund them with stablecoins, control their spending via sponsorship approval
    • Andy's line: "it could be my real kids or it could be my robot kids"
  • Built-in safety feature
    • An account holding only PLTs and zero CCD literally cannot move funds anywhere
    • Funds are locked until someone sponsors a transaction or the account acquires CCD
    • Adds a new layer of custody control by design
  • Inner Circle
    • Apply for free Inner Circle Membership and get 140 additional words with comments and analysis.

10 x402 Integration

  • Why sponsored transactions matter for x402
    • Concordium's self-custodial, protocol-enforced design meant some traditional smart contract approaches to agent payments were not available
    • Sponsored transactions solve this: the x402 facilitator can act as the sponsor
  • How it works
    • The x402 facilitator manages the full flow: what the payment is for, the amount, and the sponsorship
    • The transaction uses stablecoins (PLTs) while the facilitator covers the CCD fee
    • End result: agent payments that work seamlessly with just stablecoins
  • Concordium-specific advantage
    • On other chains, agent payment facilitators rely on smart contract delegation and token approvals
    • On Concordium, the facilitator sponsors at the protocol level without requiring token custody or smart contract intermediaries
    • Partners are actively building x402 facilitators on Concordium
  • Inner Circle
    • Apply for free Inner Circle Membership and get 305 additional words with comments and analysis.

11 Who Benefits & What's Next

  • Who benefits
    • Users: no need to hold or understand CCD. Just hold stablecoins and spend them
    • Merchants: full control over fee structure, lower costs than card networks, more customers actually transacting
    • The chain ecosystem: enables gas stations, stablecoin issuers covering fees, x402 agentic payments
  • The narrative arc
    • P8: chain stability
    • P9: Protocol Level Tokens (self-custodial stablecoins)
    • P10: sponsored transactions (removing the last friction point)
    • P11 and P12: referenced as coming soon, no details shared
  • Closing
    • Peter and Andy confirm continued protocol-level development
    • Invitation to visit concordium.com, follow on X, and join Discord and Telegram
  • Inner Circle
    • Apply for free Inner Circle Membership and get 125 additional words with comments and analysis.

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