Zcash proposed a dynamic fee mechanism to address network congestion and rising transaction costs

According to CoinDesk, the Zcash core development team Shielded Labs has released a detailed proposal for a dynamic fee market aimed at addressing network congestion and rising transaction costs.

The proposal suggests a dynamic pricing mechanism based on the median fees of the first 50 blocks, with a priority channel opened during periods of high demand. Currently, Zcash employs a static fee model, initially set at 10,000 zatoshis, which was later reduced to 1,000 zatoshis. Although the previous ZIP-317 proposal introduced a behavior-based billing method, it still maintained a predictable low fee structure. With the recent rebound in ZEC prices, an increase in retail users, and heightened institutional interest, developers believe the existing fee model is no longer sustainable. The new proposal will be implemented in phases, starting with off-chain monitoring, then as wallet strategies, and finally with consensus changes after approval. This mechanism avoids the complexities similar to EIP-1559 while preserving Zcash's privacy features.