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We have set up a system where notifications get sent to a user with the following From address format: user-{0}@aol.com (replace {0} with an ID)

This way we can track what user we sent the message to originally. This format is not likely to change for various reasons. The issue we are running into is this: every email we send out with a dynamic address is creating a new SMTP relay.

My knowledge of relays is very limited. Our host (GoDaddy) limits SMTP relays to 250 per day. This is an application that potentially will be sending out thousands of emails per day.

Is my assumption that every 'unregistered' email address we use opens a new relay, correct? If so, are there any services or hosts that provide unlimited relays for a reasonable price?

Thanks.

A: 

so my assumption that every 'unregistered' email address we use opens a new relay, correct?

Relay is basically a classification. every email sent via relay opens an SMTP connection on the mail server and not "a new relay"...that said, It might be cheaper, if you can, to set up your own sending SMPT server. It comes as a component of IIS. If you need any additional information on setting this up, let me know.

Godaddy, yes, due to the different plans. You can try any other email providers like google and yahoo as well. Just make sure to setup a "catch" all mailbox for undelivered mails and any responses.

Saif Khan