The Block reported that NU7 activated on Zcash mainnet at block 3,543,405 on November 5, 2026. The upgrade cuts the target block interval from 75 seconds to 25 seconds, routes 60% of transaction fees to the Network Sustainability Mechanism reserve, and disallows version 4 transactions. That last change makes any ZEC still held in the original Sprout shielded pool unspendable.
Taken separately, each change is understandable. Faster blocks can make the network feel more responsive. A fee reserve can help prepare for the day when new issuance is too small to fund mining. Retiring old transaction formats can reduce long-running technical risk. Together, however, they show Zcash using consensus rules to redefine both the economics of validating the chain and the range of money that can still move on it.
The key point is that NU7 does not simply make Zcash three times faster. It changes the unit in which the network thinks about time, rewards and transaction validity.
A faster clock without a larger mint
Before NU7, Zcash targeted one block every 75 seconds. That works out to roughly 1,152 blocks a day:
| Network schedule | Target block time | Approximate blocks per day |
|---|---|---|
| Before NU7 | 75 seconds | 1,152 |
| After NU7 | 25 seconds | 3,456 |
A threefold increase in block frequency would normally create an obvious monetary problem. If the subsidy paid to miners remained unchanged, Zcash would issue new coins three times as quickly. Halvings would arrive early in calendar time and the network could reach its 21 million ZEC cap far sooner than intended.
NU7 prevents that by changing three variables together:
- The target interval falls from 75 seconds to 25 seconds.
- The subsidy paid per block is divided by three.
- The number of blocks between halving events is multiplied by three.
That combination keeps issuance approximately constant over real time.
Suppose the pre-NU7 block subsidy is represented by S. Under the earlier schedule, the network produced about 1,152 blocks a day, so its daily issuance was:
1,152 × S
Under NU7, Zcash produces about 3,456 blocks a day, but each pays a subsidy of only:
S ÷ 3
The resulting daily issuance is:
3,456 × (S ÷ 3) = 1,152 × S
The number of coins minted per day is therefore unchanged in the simplified model. What changes is the granularity. Rather than paying a larger reward less often, Zcash pays a smaller reward more often.
This is why the halving interval must also be adjusted. A halving is not intrinsically tied to a block number. It is an economic event tied to the reduction of issuance. If Zcash tripled blocks per day but left the halving height unchanged, the next reduction would occur about three times sooner in wall-clock time. Multiplying the remaining block interval by three preserves the intended calendar cadence of the issuance curve.
For holders, this means the nominal monetary policy remains intact. The 21 million ZEC ceiling is not relaxed merely because blocks arrive faster. For miners, it means the predictable subsidy per unit of time remains broadly comparable, although each individual block becomes less valuable.
That distinction matters because a blockchain’s security budget is paid over time, while its consensus operates one block at a time.
The new fee split changes miner economics
NU7’s more consequential innovation may be the Network Sustainability Mechanism, or NSM. Transaction fees are no longer paid entirely to miners. Instead, 40% goes to the miner of the block, while 60% is removed from immediate circulation and placed in a public reserve.
The reserve is intended for gradual future reissuance through block rewards beginning at block 8,939,664, which The Block said is expected around 2031. This is not the same as creating new ZEC beyond the cap. Fees have already been paid from existing coins. Moving them into a reserve changes who can receive them, and when, but it does not increase the total number of ZEC.
The economic distinction between a burn and a reserve is crucial. A true burn destroys the practical claim on coins permanently. A reserve delays their circulation and assigns their future distribution to consensus rules. In both cases, the coins are unavailable to current miners. But only the reserve retains them as a possible future security resource.
At first glance, miners lose. They receive less fee revenue from every block than they did before NU7. If a block contains fees worth F, then a miner’s immediate reward becomes:
subsidy + 0.4F
The other 0.6F does not disappear into the miner’s wallet. It goes to the NSM reserve.
That is a deliberate tradeoff. Zcash is choosing to reduce current fee capture in order to build an onchain source of future rewards. The strategic rationale is familiar to every proof-of-work system: subsidies decline over time, while network security still requires validators to expend resources. If transaction fees alone are not enough when issuance becomes small, miners could face weaker incentives to keep contributing hash power.
The NSM does not solve that problem today. It shifts some value from present block producers toward future ones.
Faster blocks complicate the fee picture
The shorter interval makes per-block fees a potentially misleading metric. There are now three times as many blocks in a day. If the same amount of user activity is simply spread across three times as many blocks, the average fee per block could fall.
Consider an earlier daily fee total of D. Under the 75-second schedule, miners would have received all of it:
old daily miner fees = D
Under NU7, if daily transaction demand is unchanged, the network still collects approximately D in daily fees, but miners receive only:
new daily miner fees = 0.4D
The remaining 0.6D moves to the reserve.
The result is different if faster confirmation opportunities create more activity or greater fee demand. If daily fees rise enough, miners may partly or fully offset the lower fee share. But that depends on actual usage, not the protocol’s target block interval.
A useful revenue model is:
daily miner revenue = daily subsidy + 40% of daily fees
Because the subsidy has been rescaled to preserve daily issuance, the main new variable is the fee share. Miners now need higher total daily fees to earn the same fee income as before.
| Daily fee environment | Total fees paid by users | Miner share under NU7 | Amount reserved |
|---|---|---|---|
| Low demand | D | 0.4D | 0.6D |
| Higher demand | 2D | 0.8D | 1.2D |
| Break-even versus old fee revenue | 2.5D | D | 1.5D |
The break-even row captures the tension. To recover the same absolute fee income they formerly received from daily fees of D, miners need total daily fees to reach 2.5 times D, because they now receive only 40%.
That could be a demanding target in a low-fee environment. It also makes Zcash’s security policy more explicit than the conventional model in which miners receive every fee today and future miners depend on unknown future demand.
The policy is not free of risk. Current miners bear the immediate reduction in fee revenue, while the promised benefit is deferred. If mining becomes materially less profitable before the reserve begins reissuance, hash rate and competition for blocks could weaken. Conversely, if the reserve becomes a credible and well-understood future income source, it may help miners and investors price the post-subsidy era more rationally.
The reserve is public, which is important. Its balance and eventual distribution schedule can be audited. That makes it different from an offchain treasury controlled by a company, foundation or committee. Yet its rules still carry governance significance, because any future change to its distribution would require broad agreement on consensus rules.
Why 25-second blocks are not simply a user experience upgrade
Users will most directly notice shorter expected waits for the next block. A transaction sent just after a block is mined now has a shorter expected wait to be included. Whether that translates into stronger settlement assurance still depends on the confirmation depth a recipient requires and the network’s reorganization risk.
But a shorter block interval also compresses the time available for block propagation. A miner who finds a block must relay it across the network before another miner finds a competing block. The faster blocks arrive, the more important efficient relay, well-connected infrastructure and low-latency mining operations become.
This is not necessarily a flaw. It is a tradeoff. Zcash is choosing more frequent settlement opportunities while requiring the network to operate on a tighter communications schedule. The outcome will depend on how effectively miners and nodes propagate blocks, and whether the changed cadence alters the rate of stale blocks or the concentration of mining advantages.
For business users, the deeper implication is that confirmation speed and network security are linked but not identical. A wallet can display a new block every 25 seconds, but the economic confidence attached to a payment still depends on the cost of reorganizing the chain and the strength of the mining market behind it.
Sprout’s sunset is a consensus decision, not a wallet bug
NU7 also ends spendability for ZEC remaining in the Sprout pool. Sprout was Zcash’s original shielded transaction system. It was later superseded by newer shielded pools and transaction formats, but residual value remained in the old pool.
The technical trigger is version 4 transaction deprecation. Sprout relies exclusively on version 4 transactions. Once consensus rules reject that version, no valid transaction can spend Sprout notes. The funds do not move, and no one gains the ability to reveal or seize them. They simply cannot produce a transaction that the network will accept.
The Block reported that roughly 12,224 ZEC remained in Sprout at the activation height. That quantity should be understood as stranded rather than newly burned at the protocol level. The coins may still be visible as part of historical supply accounting, but they are no longer economically spendable under the current rules.
This is a critical difference from normal wallet compatibility problems. A wallet can be upgraded, restored or replaced. A consensus rule cannot be bypassed by using old software, because old software will produce transactions that upgraded nodes reject. The retirement is network-wide for participants following the canonical chain.
It also does not weaken Zcash privacy by allowing hidden Sprout funds to escape through an exception. The protocol does the opposite. It refuses the only transaction format capable of moving those legacy notes. Privacy systems often face a difficult maintenance question: how long should a network preserve support for old cryptographic constructions that have been replaced by safer or more maintainable ones? NU7 answers that Zcash is willing to impose an irreversible migration deadline.
The larger test is whether deferred security can work
NU7 is best viewed as a combined monetary and infrastructure upgrade. Its faster blocks preserve issuance by changing subsidy size and halving height in lockstep. Its fee reserve preserves the 21 million cap because it reallocates existing coins rather than minting additional ones. Its Sprout retirement removes a legacy transaction path by consensus, not by administrative discretion.
For Zcash, the next question is whether the arrangement produces the intended balance. Users may benefit from more frequent blocks. Future miners may benefit from a transparent reserve. Current miners must accept a smaller slice of fee revenue. And users who did not migrate Sprout funds before November 5 have learned the hardest lesson of consensus systems: once a network retires a valid transaction type, no wallet update can restore it.
NU7 will be judged by the data: whether post-upgrade hash rate holds or rises as stale-block rates remain contained, whether miner revenue and fee volume grow, whether NSM reserves accumulate, and how much ZEC had migrated from Sprout before activation alongside the fixed quantity stranded at block 3,543,405.
David Smith is not a person. No notebook, no deadlines, no face behind the name — just a byline this newsroom publishes under. Here is the production line underneath it, because a name beside a portrait reads like a journalist, and this one is not one.
The models. Writing: gpt-5.6-luna. Out on the live web: gpt-5.6-luna and gpt-5.6-terra. Pictures: gpt-image-1. Swap one in the newsroom and this line swaps with it — it is read off the machines, not typed here.
How a story is made
- Research. The searching model reads around the story, pointed at primary sources — the filing, the post, the repository — rather than at somebody else's write-up of them.
- Writing. The writing model drafts it against what was found, at David Smith's usual length and in David Smith's usual register.
- The loop. A reviewer reads the draft and sends it back with notes. Then reads it again. A piece can go round several times before it leaves the building.
- Enrichment. A quotation has to appear word for word on the page it is taken from. A chart may only use figures that appear in the source it cites. Whatever fails is dropped, and the reason is kept.
- Fact check. A last pass hunts for claims the article makes and its sources do not.
- A human stop. Sensitive subjects are held for a person to read before publication, and a person can kill any of it at any point.
If that sounds less like a newsroom and more like a factory: quite. It is called Press Factory.
This article was generated using AI and published automatically without human pre-publication review.
Read and checked by admin on 11/10/2026
How this article was made
The article was produced by the Grandmonts Media News Engine using automated research, drafting and verification workflows. No human editor reviewed the article before publication. Grandmonts Media remains responsible for the published content. Errors can be reported at office@grandmonts.cz.