Key Takeaways
Zcash’s NU7 upgrade cuts block times from 75 to 25 seconds while preserving its 21 million ZEC supply cap.Shielded Labs’ new mechanism redirects 60% of Zcash transaction fees to a long-term security reserve.Zcash will begin redistributing reserved ZEC in 2031, while its next halving remains on track for 2028.
Zcash Cuts Block Times While Preserving Supply Cap
Zcash has officially completed its latest network upgrade, Network Upgrade 7 (NU7), activating at block 3,543,405. The major milestone introduces a shift to 25-second block target times alongside the mainnet deployment of the Network Sustainability Mechanism (NSM), designed to address long-term tokenomics and security as block subsidies decline.
With NU7, Zcash transitions block target times from 75 seconds to 25 seconds. To keep total daily ZEC issuance consistent with the existing schedule, the block reward has been proportionally adjusted to 0.52083333 ZEC per block.
The total 21 million supply cap and the timing of the next halving, projected for late 2028 at block 6,132,390, remain completely unchanged. NU7 also officially invalidates Version 4 transactions, freezing the legacy Sprout pool.
That means more than $16 million worth of ZEC (roughly 12,224 ZEC) held in the network’s original Sprout shielded pool is now unspendable, effectively freezing the funds under the new consensus rules. Zcash co-founder Sean Bowe in September described the lingering Sprout pool, which had previously been exit-only, as “pure technical debt” and “a needless security risk for the project.”
The headline economic change in NU7 is the activation of the NSM, developed by Shielded Labs. Building on an idea originally proposed by Nate Wilcox as the “Zcash Posterity Fund,” the NSM addresses a challenge inherited from Bitcoin: securing the network over the long term as mining subsidies taper off.
New Mechanism Redirects Transaction Fees to Security Reserve
Key features of the NSM deployment include redirecting 60% of all transaction fees out of active circulation into the NSM balance, leaving miners with 40%. Gradually those accumulated funds will be reissued starting in 2031 along a smooth curve layered over the halving schedule, rather than burning the ZEC. To further bolster this security reserve, a separate proposal under consideration evaluates contributing an additional 50,000 ZEC directly from the Zcash Community Grants treasury into the NSM.
Emphasizing the long-term focus of the upgrade, Shielded Labs’ Jason McGee noted, “Zcash is money for an infinite civilization, and we’re building for a network that remains secure and sustainable for centuries to come.”
Shielded Labs’ initial design proposed replacing halvings altogether with a smooth issuance curve. While community panels supported the original design, coinholders favored preserving halvings. In response, Shielded Labs adjusted the design to maintain the classic halving cycle while integrating the recycled issuance mechanism.
Writing on X, McGee highlighted this iterative process as a core strength of Zcash’s consensus model, noting that no single entity or individual can unilaterally push changes to the protocol.
The deployment of NU7 represents a key milestone for Shielded Labs alongside ongoing initiatives such as Crosslink and Epoch. While the full economic effects of the NSM will unfold over years and decades, the upgrade lays the groundwork for Zcash’s long-term security as block subsidies continue to decline.
Meanwhile, ZEC appeared to rally on the upgrade finalization, surging from $1,225 to briefly surpass $1,380 even as the broader cryptocurrency market sat nearly even after substantial losses on Thursday. As of this writing, the privacy coin was trading around $1,345, up approximately 8% over the previous 24 hours.
