A key Zcash developer has published the first detailed blueprint for a dynamic fee market, opening a community discussion about how the decade-old network should price transactions as ZEC’s price, user activity and institutional interest climb.
The Monday proposal, released by Shielded Labs, lays out a shift away from Zcash’s historically static fee model — originally 10,000 ‘zatoshi,’ later cut to 1,000 — which worked during low demand but eventually contributed to “sandblasting” spam episodes that clogged wallets and congested the chain.
An earlier ZIP-317 proposal’s move to action-based accounting fixed the abuse vector, but retained predictable, low fees that don’t adjust to usage.
Action-based accounting treated every Zcash transaction component — such as spends, outputs, JoinSplits, Orchard actions — as a single uniform “action,” letting fees scale with activity rather than byte size.
Developers say that with ZEC’s recent resurgence, new retail onboarding and the emergence of Zcash digital-asset treasuries, the status quo is becoming less tenable.
It said some users have started to report rising transaction costs in ZEC terms, and edge-case scenarios — like large sets of tiny user transactions costing double-digit ZEC to shield — show how fee rigidity breaks down when token prices climb.
The proposed mechanism introduces a simple, stateless dynamic fee design built around “comparables,” or the median fee per action observed over the prior 50 blocks, padded with synthetic transactions to simulate always-on congestion.
The median becomes the standard fee, bucketed into powers of ten to reduce linkability and avoid leaking user information. Under stress, a temporary priority lane opens at 10× the standard fee, giving users a way to compete for block space without redesigning the protocol.
The system is designed to roll out in phases. First is off-chain for monitoring, then as wallet policy, and only later — if approved — as a simple consensus change with expiry-height limits and power-of-ten fee rules.
That avoids the complexity and fork risk of EIP-1559-style mechanisms while keeping Zcash’s privacy constraints intact.
Other ideas floated include using mining difficulty as a long-term heuristic for USD-denominated fees to tune prices based on mempool pressure.
ZEC traded around $395 on Tuesday, up more than 12% in 24 hours as traders digested the first concrete roadmap for fee reform since ZIP-317.