Zcash NU7 Upgrade Live on Mainnet, Cutting Block Time to 25 Seconds

Zcash activated its NU7 network upgrade on mainnet at block height 3,543,405 on Nov. 5, cutting the target block interval from 75 seconds to 25 seconds and switching on a fee-recycling mechanism that pulls 60% of every block's transaction fees out of circulation.

The threefold reduction in block time is the headline change, but the issuance math stays intact. NU7 scales block subsidies down by the same factor, so the rate of new ZEC entering supply remains essentially unchanged. The number of blocks between halvings is tripled, which preserves the existing halving calendar and the 21 million ZEC supply cap.

What does the Network Sustainability Mechanism do?

The second pillar of the upgrade, the Network Sustainability Mechanism (NSM), removes 60% of each block's transaction fees from circulation and stores them in a public reserve. Miners keep the remaining 40%.

The reserved fees are scheduled for gradual reissuance through block rewards starting at block 8,939,664 — expected to begin in 2031. That's a deliberate long-horizon design, holding the fees on-chain for roughly six years before they re-enter the reward stream.

"Like Bitcoin, Zcash faces a long-term challenge: how to sustain network security as block rewards decline. The NSM helps address that while preserving the 21 million coin cap," said Shielded Labs, an independent organization supporting Zcash development. The group called the NSM its first major mainnet deployment on Zcash.

The mechanism is effectively a deflationary sink with a delayed release valve. Fees get pulled from circulating supply now, then drip back to miners years later as block subsidies — a structural answer to the security-budget question that Proof-of-Work chains face as issuance declines.

What happens to funds in the old Sprout pool?

NU7 disallows version 4 transactions outright. That has a hard operational consequence: the original Sprout shielded pool relies exclusively on that transaction format, so any ZEC still sitting in Sprout becomes unspendable.

Approximately 12,224 ZEC sat in the pool at the activation height. That's the balance effectively frozen once the rule took effect.

Node operators had to upgrade their software before the activation height to stay on the consensus chain. For most wallets, the changes don't require significant updates, which limits the user-side disruption of a consensus shift this size.

Why the market shrugged it off

The upgrade landed amid a broad crypto downturn rather than a Zcash-specific reaction. ZEC dropped 5.17% over 24 hours to trade at $1,254.7 as of 2:05 a.m. Friday, while the GMCI 30 index, tracking the top 30 cryptocurrencies, fell 6.9% over the same window.

The price action says little about the upgrade itself. NU7 changes the chain's economics — block cadence, fee routing, halving arithmetic — rather than anything the market reprices in a single session.

What comes next for Zcash economics

The next structural milestone is already fixed on-chain: reserved fees under the NSM begin flowing back into block rewards at block 8,939,664, expected in 2031. Between now and then, miners collect 40% of fees while 60% accrues to the public reserve, and holders of Sprout-era funds who missed the migration window hold balances they can no longer move.