Proposal — Strengthen NAM Utility and Fee Economics

Governance Ops Proposal 🗳️
1

Hey everyone,

I’d like to reopen a topic that has been discussed before but never moved forward into action: how transaction fees are paid and how they are priced.

At the moment, Namada allows fees to be paid in any asset, and the actual fee levels are extremely low — sometimes so low that they risk undermining the perceived value of the network itself.

I’d like to propose a two-part adjustment that could significantly improve both the economic sustainability and perceived quality of the Namada ecosystem.

:one: Transaction Fees Paid in NAM Only

Currently, users can pay transaction fees using any token they hold. While this flexibility was convenient in the early phases, it has some negative consequences:

  • It weakens the utility and demand for NAM, since users can interact with the network without ever holding it.

  • It decouples network activity from the token economy, meaning NAM’s value doesn’t reflect actual on-chain usage.

  • It creates complexity for fee logic in wallets and applications.

Proposal: Restrict transaction fees to be paid exclusively in NAM.

This would:

  • Strengthen NAM as the core economic unit of the Namada network.

  • Create natural demand for NAM as network usage grows.

  • Simplify the user and developer experience with a unified, predictable fee system.

:two: Adjust Fee Levels to Reflect Market Reality

Today’s transaction fees are extremely low — to the point of being almost symbolic.
For example:

  • Unbonding transaction: ~0.2 NAM ≈ $0.0016 USD

  • Delegation transaction: ~0.04 NAM ≈ $0.00032 USD

Such prices are orders of magnitude below what’s typical in other networks and can create two issues:

  1. They don’t contribute meaningfully to validator or protocol sustainability.

  2. They may devalue the perception of service quality — users often associate higher operational costs with a more serious, secure network.

Proposal: Implement a mechanism to periodically adjust fee parameters according to NAM’s market price, ensuring a stable target cost in fiat terms (for example, maintaining transaction costs around a few cents USD, regardless of NAM’s token price).

This doesn’t mean making the network expensive — just ensuring fees remain meaningful enough to signal quality and support long-term sustainability.

Expected Outcomes

  • Reinforced NAM utility and economic relevance.

  • Healthier fee market and validator economics.

  • Improved external perception of Namada as a robust, high-quality network.

  • Foundation for sustainable MASP usage once incentives are phased out.

Next Steps

I’d like to hear the community’s thoughts — and especially from the core contributors — on:

  • Any technical constraints to enforcing NAM-only fees;

  • Preferred mechanisms for adjusting fees (manual governance parameter vs. automatic adjustment);

  • Timeline and governance process to formalize these changes.

Curious to hear everyone’s thoughts and see if we can turn this into action.

2

Re point 1: I don’t understand why you want to discuss/reopen a topic that has been fully debated in several rounds with the result always landing on that gas abstraction (being able to pay gas in multiple tokens) is a net benefit. (I could repeat arguments I’ve made in favor of Nam’s utility in many other ways, but again you are opening a topic that has already been comprehensively debated - see for instance discord threads a few months ago)

Re point 2, I don’t see a need for that, but curious to see which arguments exist in favor. (I don’t see it as a net loss that transactions on the network are cheap, in fact that’s an argument for using the network…)

3

Point1:
I am reopening simply because I understand from several discord discussion that, althought switcing to NAM only won’t be a cure all, there was a common willing and acceptance from the community to do so, but no actions have been taken towards it.

4

I think the last time we discussed it we landed on not wanting to do that, amongst others because it had no support from founders, and those who asked for it withdrew the ask because of the reasoning given by cw (as best I recall).