Zcash Proposes Dynamic Fees as Network Activity and Token Price Rise
A leading Zcash developer has unveiled a detailed blueprint for a dynamic fee market, sparking community discussion on how the decade-old network should price transactions amid rising ZEC value, user adoption, and institutional interest.
The proposal, released Monday by Shielded Labs, moves away from Zcash’s static fee model—originally 10,000 zatoshi, later reduced to 1,000—which, while effective during low demand, eventually contributed to spam attacks that congested wallets and clogged the blockchain.
Earlier action-based accounting under ZIP-317 solved the spam issue by treating each transaction component—spends, outputs, JoinSplits, and Orchard actions—as a single “action,” letting fees scale with activity rather than size. But fees remained predictably low, failing to adjust to higher network usage or rising token prices.
Developers point to recent trends—ZEC’s price surge, growing retail adoption, and the emergence of digital-asset treasuries—as evidence that the current system is increasingly unsustainable. Users have reported rising transaction costs in ZEC terms, and shielding large numbers of small transactions can cost double-digit ZEC.
The new proposal introduces a stateless dynamic fee design based on the median fee per action over the prior 50 blocks, supplemented with synthetic transactions to simulate congestion. Fees are bucketed in powers of ten to protect privacy, with a temporary 10× priority lane for high-demand periods.
Rollout would occur in phases: off-chain monitoring, wallet policy integration, and eventually a consensus-level update with expiry-height limits. The design avoids complex mechanisms like Ethereum’s EIP-1559 while preserving Zcash’s privacy standards.
Following the announcement, ZEC traded around $395 on Tuesday, up more than 12% in 24 hours, as traders digested the first detailed fee-reform roadmap since ZIP-317.
