A key Zcash developer has published the first detailed plan for a dynamic fee market, opening a community discussion on how the decade-old network should price transactions as ZEC’s price, user activity and institutional interest increase.
Monday’s proposal, released by Shielded Labs, describes a shift away from Zcash’s historically static fee model – initially 10,000 ‘zatoshi’, later cut to 1,000 – which worked during low demand but eventually helped “sandblast” spam episodes that clogged wallets and overloaded the chain.
An earlier ZIP-317 proposal’s shift to activity-based accounting fixed the abuse vector but maintained predictable, low fees that don’t scale with usage.
Action-based accounting treated each Zcash transaction component—such as spend, output, JoinSplits, Orchard actions—as a single uniform “action,” allowing fees to scale with activity rather than byte size.
Developers say that with ZEC’s recent resurgence, new retail onboarding and the emergence of Zcash digital assets, the status quo is becoming less tenable.
It said some users have started reporting rising transaction costs in ZEC terms, and edge-case scenarios — like large sets of small user transactions costing double-digit ZEC to screen — show how fee rigidity breaks down as token prices rise.
The proposed mechanism introduces a simple, stateless dynamic fee design built around the “comparable” or median fee per action observed over the previous 50 blocks, padded with synthetic transactions to simulate constant congestion.
The median becomes the standard fee, divided into powers of ten to reduce linkability and avoid leaking user information. Under stress, a temporary priority lane opens at 10× the default fee, allowing users to compete for block space without redesigning the protocol.
The system is designed to be rolled out in phases. First it is off-chain for monitoring, then as wallet policy and only later – if approved – as a simple consensus change with expiration height limits and power-of-ten fee rules.
It avoids the complexity and fork risk of EIP-1559 style mechanisms while keeping Zcash’s privacy constraints intact.
Other ideas that came up include using mining difficulty as a long-term heuristic for USD fees to adjust 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.
