Zcash Developers Unveil First Dynamic Fee Market Blueprint Amid Rising Network Demand

A leading Zcash developer has introduced the first in-depth blueprint for a dynamic fee market, igniting community-wide discussion about how the privacy-focused blockchain should evolve its transaction pricing as ZEC’s value, user activity, and institutional interest continue to surge. The proposal, released by Shielded Labs, marks a major shift away from Zcash’s historically static fee structure, which began at 10,000 zatoshi and was later reduced to 1,000. While this fixed-fee approach worked during years of low network usage, it eventually contributed to spam-driven “sandblasting” attacks that overloaded wallets and slowed transaction processing.

Although the introduction of ZIP-317’s action-based accounting helped resolve the most severe abuse vectors, it retained predictably low fees that did not adjust to real-time network conditions. Under ZIP-317, each component of a Zcash transaction—such as Orchard actions, spends, outputs, or JoinSplits—is standardized as a single “action,” allowing fees to scale more fairly with transaction complexity rather than byte size. However, developers argue that the current model is becoming unsustainable as ZEC experiences renewed market momentum, retail adoption grows, and new digital-asset treasury tools emerge.

With ZEC’s rising price, some users have begun reporting significantly higher transaction costs, particularly in edge cases where batching small inputs can lead to large shielding fees. The new proposal introduces a stateless dynamic fee mechanism that calculates a median fee per action based on the last 50 blocks. Synthetic transactions are added to simulate consistent network load, ensuring fees remain adaptive even during quieter periods. This median is then rounded into powers of ten to preserve user privacy and prevent fee-based fingerprinting. During periods of congestion, a temporary priority tier priced at 10× the standard fee gives users an optional path to faster confirmations.

The roadmap envisions a phased rollout: initially off-chain for data gathering, then integrated into wallet policies, and eventually—pending community approval—implemented as a lightweight consensus update. This approach avoids the complexity of Ethereum’s EIP-1559 while maintaining Zcash’s strict privacy requirements. Some developers have also proposed exploring mining difficulty as a long-term indicator for USD-pegged fee adjustments.

ZEC was trading near $395 on Tuesday, up more than 12% as the market reacted to the first meaningful step toward modernizing Zcash’s fee system since ZIP-317.