Zcash Activates NU7, Cutting Target Block Time to 25 Seconds

NU7 changes Zcash block production

Zcash activated its NU7 network upgrade on mainnet on November 5, at block height 3,543,405. The change cuts the network’s target block interval from 75 seconds to 25 seconds, a threefold reduction. This is a change to the target time between blocks, not a claim that every transaction will settle in exactly 25 seconds. NU7 also revises reward and halving parameters, making the upgrade broader than a block-timing adjustment alone.

The change to block timing comes with a corresponding adjustment to block rewards. According to the upgrade details, rewards are being altered so that new ZEC continues to enter circulation at roughly the same pace despite blocks being targeted more frequently. The number of blocks between halvings is also tripled. These linked adjustments are intended to keep the issuance schedule aligned with the shorter interval rather than letting faster block production alone accelerate coin issuance.

The upgrade therefore changes how often blocks are targeted without changing Zcash’s stated fixed supply ceiling of 21 million ZEC. That distinction matters when assessing the tokenomics: the schedule uses more frequent blocks, while reward sizing and the block count between halvings are adjusted alongside them. The supplied upgrade details do not specify revised reward amounts or calendar dates for each future halving, so those figures cannot be inferred from the new 25-second target alone.

A fee-recycling mechanism for long-term security

NU7 also activates the Network Sustainability Mechanism, or NSM, developed by Shielded Labs. Its stated purpose is to address a challenge for proof-of-work networks: whether transaction fees by themselves can provide enough support for network security as block subsidies decline. The NSM changes how a portion of fees is treated, but it does not replace the existing halving schedule. Instead, the mechanism is designed to operate alongside that schedule.

Under the NSM, 60% of Zcash transaction fees will be removed from circulation and gradually reissued through future block rewards. Reissuance is scheduled to start at block 8,939,664, which is expected to be reached in 2031. The funds are to be distributed along a smooth curve, on top of the existing halving schedule. This describes the planned mechanism; it does not establish how much support it will ultimately provide at any particular point.

Shielded Labs Executive Director Jason McGee described the deployment as a major milestone for the organization and its first major mainnet release. He also connected the mechanism to an earlier proposal by Nate Wilcox, which was then called the Zcash Posterity Fund. That background places the NSM within a longer-running discussion about sustaining Zcash, while the mainnet activation marks the point at which its rules become part of the live network.

Protocol changes also affect Sprout funds

A practical consequence of NU7 is that it disables version 4 transactions. Under the new rules, funds remaining in Zcash’s original Sprout privacy pool can no longer be spent. About 12,224 ZEC are still locked there, according to the supplied details. The upgrade thus has a direct effect on those holdings, distinct from its changes to block timing, rewards and fee handling.

The Sprout pool outcome is a protocol-rule change, not simply a temporary delay in processing. With version 4 transactions disabled, the remaining funds are described as impossible to spend under NU7’s rules. The available information gives the approximate quantity but does not explain whether any route to move those ZEC could be proposed or adopted later. For now, the stated result is that roughly 12,224 ZEC remain locked.

A separate proposal would require Zcash Community Grants to contribute 50,000 ZEC from its treasury to the NSM. It is still under consideration, rather than an enacted part of NU7. If approved, the contribution could add support for future block rewards as the existing subsidy declines. The proposal’s status is important: the planned fee-recycling rules are active, but this additional treasury contribution cannot be treated as settled.

Market context and unresolved questions

ZEC’s market performance provides context for the timing of the upgrade, but it does not establish a cause-and-effect link between NU7 and price moves. The source reports that the asset had risen more than 150% year to date in 2026, moving from the $500s to a multi-year high of $1,693 in September. It also says the rally lifted ZEC into the crypto market’s top ten by market capitalization.

The same account reports that ZEC briefly fell to around $1,222 after the upgrade, then recovered to $1,322 before facing another pullback. Its latest cited level is near $1,290. These figures describe a volatile period around activation, not a measure of the upgrade’s long-term effect. No trading volume, comparison with other assets or explanation for the individual price movements is provided in the supplied material.

The key questions now concern how the changed block schedule operates in practice, how the NSM’s gradual reissuance interacts with future halvings, and whether the separate 50,000 ZEC treasury proposal advances. The fee mechanism’s start is scheduled for a block expected in 2031, so its operation lies ahead. NU7’s activation establishes the rules described here, but the available details do not quantify their eventual effect on network security or market value.

Source: CryptoPotato