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 the ZEC price, user activity and institutional interest rise.
Monday’s proposal, published by Shielded Labs, sets out a move away from Zcash’s historically static fee model (originally 10,000 ‘zatoshi’, later reduced to 1,000) that worked during low demand but eventually contributed to “weeding out” spam episodes that clogged wallets and congested the chain.
The move from an earlier ZIP-317 proposal to share-based accounting fixed the abuse vector, but kept low, predictable fees that don’t align with usage.
Share-based accounting treated each component of the Zcash transaction (such as expenses, exits, JoinSplits, Orchard shares) as a single uniform “share,” allowing fees to scale with activity rather than byte size.
Developers say that with the recent resurgence of ZEC, the addition of new retailers, and the rise of Zcash digital asset treasuries, the status quo is becoming less sustainable.
He said some users have started reporting rising transaction costs in terms of ZEC, and extreme scenarios, such as large sets of small user transactions costing double digits to secure ZEC, show how fee stickiness breaks down when token prices rise.
The proposed mechanism introduces a simple, stateless dynamic fee design built around “comparables,” or the median fee per share observed over the previous 50 blocks, complemented by synthetic transactions to simulate permanent congestion.
The median becomes the standard rate, divided into powers of ten to reduce linkability and prevent leakage of user information. In stress situations, a temporary priority lane is opened at 10 times the standard rate, giving users a way to compete for block space without redesigning the protocol.
The system is designed to be implemented in phases. First, it is off-chain for monitoring, then as a wallet policy, and only later, if approved, as a simple consensus exchange with expiration limits and power-of-ten fee rules.
This avoids the complexity and forking risk of EIP-1559 style mechanisms while keeping Zcash’s privacy limitations intact.
Other ideas that came up include using mining difficulty as a long-term heuristic for dollar-denominated 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 tariff reform since ZIP-317.
