Thread by @CheckMateHere

Summary of fee mechanisms studied by GMU 4 #Zcash shielded assets electriccoin.co/wp-content/upl…

1. Computational Costs: Identical to the current one

Pros: Straightforward and easy to implement

Cons: Unfair to $ZEC holders if ZSA's become popular + could potentially weaken privacy

2. Shielding Hosting: ZSA's pay fee equivalent to the dilution of ZEC holders. Fees are cumulative while assets remain shielded

Pros: Fairness between ZEC holders & ZSA
holders

Cons: Incentivises quick ZSA redemption & complicates overhead for miners + tx's might get censored

3. Shielding Hosting + Mandatory ZEC market buys: Similar to previous but fees are automatically converted at some rate to ZEC through a Zcash DEX

Pros: More mangeable overhead for miners
Cons: Need to rely on price oracles, ZEC liquidity providers & fosters arbitrage behavior

4. Private Transaction Volume Proportional Fees: fees in ZEC are proportional to the amount of ZSA being sent in tx

Pros: Relies on burning $ZEC which increase value of remaining supply

Cons: Relies on price oracles, miners only get incentives when ZSAs are transacted

5. Transparent Direct- Transaction-Volume-Proportional Fees: Proportional fee in ZSA units is paid & used as a block reward to miners

Pros: Does not seem to have any

Cons: Fails to extend privacy property right to ZSAs, making ZSA's pointless

6. Scarce Active Asset Auctions: There's an interval 4 which limited number of asset types are allowed 2 be transacted. Parties wanting an asset 2 be active post $ZEC bids 2 activate asset type during interval

Pros: None

Cons: Incentive for bidders 2 free-ride on other bidders

7. Scarce Asset Type Creation Rate Auctions: Here permanence of ZSAs would allow their continual use & not incentivise rapid removal from the chain

Pros: None

Cons: Increased computation costs 2 miners due to expanding types of ZSA's + no lasting security incentives

8. Supply-Proportional Issuance Bonds: ZSA issuer can't mint an ZSA unless they post price-proportional amount of $ZEC to a bonding system.

Pros: Scales demand 4 ZEC alongside that of ZSAs, tx's remain private

Cons: relies on escrow & brings problems similar 2 oracles