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- Zcash developers outline a dynamic fee model using median action costs to curb congestion and price spikes.
- Priority lane at ten times standard fees offers temporary relief during stress while preserving user privacy patterns.
Shielded Labs has introduced a new proposal aimed at solving long-standing fee issues in the Zcash network. The current system, which began with a flat 10,000 zatoshi fee and later dropped to 1,000, worked in periods of low usage. However, it fell short when the network came under pressure from spam attacks, known as “sandblasting,” that overwhelmed wallets and stalled the chain.
An earlier fix called ZIP-317 replaced byte-based fees with action-based accounting. This approach treated each transaction component such as spend, output, or Orchard action as a separate process. While this change helped block spam by linking fees to activity instead of size, it did not allow fees to rise naturally when network usage increases and token prices climb.
Developers say rising ZEC values are exposing gaps in the current approach. One case involved shielding large batches of micro-transactions, which ended up costing users double-digit ZEC. Complaints have started to surface about transactions becoming more expensive in ZEC terms, prompting concern that ordinary users could be pushed out.
Median-based Fees with Power-of-Ten Privacy
The suggested update includes a system that sets transaction fees dynamically using a rolling median of recent activity. The reference point is the median fee per action over the last 50 blocks. This number is then adjusted using synthetic transactions that act as if the network is always under moderate load, maintaining steady pressure.
To prevent user data from being exposed through precise fee amounts, the new plan rounds fees into buckets using powers of ten. In high-demand situations, a temporary fast lane would become available, allowing users to pay ten times the standard rate to ensure their transactions get processed more quickly.
The proposal is structured to launch gradually. Monitoring would start off-chain, followed by integration into wallet software as policy. If all goes well, the final step would involve a small consensus change, avoiding risks tied to more invasive upgrades seen in other blockchains.
Traders push Zcash (ZEC) higher on Fee proposal
ZEC was trading at around $416 on Tuesday, showing a 7.62% rise in the past 24 hours as market participants responded to the first concrete proposal for overhauling fees since ZIP-317. Developers framed this new approach as one that balances privacy with performance without major disruption to the protocol.
Additionally, the Winklevoss-led venture Cypherpunk Technologies Inc. has acquired 200,000 ZEC for its treasury, spending over $80 million since November. The firm aims to eventually control about 5% of the coin’s circulating supply. Reliance Global followed a similar strategy, converting all its digital assets into Zcash and exiting other positions entirely.
On November 26, Grayscale moved forward with a filing to turn its existing Zcash Trust into a spot exchange-traded fund. If approved, it would track the token through the CoinDesk Zcash Price Index.
