My curiosity prompts me to ask you a question... We have seen with many L1 Blockchains a recurring problem: the transaction fees fatally get more and more expensive with the valuation of the native coin when measured in USD (not to mention the protocols that prioritize transactions with an auction system).

I read in the official documentation that the Cardano fee structure is quite simple and has 2 protocol parameters.

Fees are constructed around two constants (a and b). The formula for calculating minimal fees for a transaction (tx) is a * size(tx) + b, where:

a/b are protocol parameters size(tx) is the transaction size in bytes Protocol parameters (a and b) Protocol parameters are values that can be altered by Cardano's update system to react and adapt to changes in transaction volume, hardware prices, and ada valuation.

Since a and b are protocol parameters, changing these parameters would require a kind of hard fork.

Do you think that in the near future, one could imagine that the protocol will monitor in real time the valuation of ADA as well as the prices of the material needs of SPOs and will automatically launch hardforks?

1 Answer 1


Protocol parameters do not require a hard fork. They require a governance model to submit an update proposal that changes the parameters, but they do not increase the protocol version like era transitions. All existing nodes will get the new protocol parameters at the epoch boundary the update proposal takes effect. In the future, there could be some potential process that automates this.

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