The Zcash network activated its NU7 upgrade on the public testnet at block 4,465,026 on October 4, approximately two days before the October 6 estimate the Zcash Foundation had set when it shipped the first release candidate. According to reports from the testnet, if services retain a three-confirmation policy, the target wait time falls to approximately 75 seconds from 225 seconds. Both Zakura and Zebra node software now support the testnet trial, with an earlier separate testing network having been shut down. The public trial gives developers, exchanges, and other infrastructure operators an opportunity to check compatibility before the changes reach the live network, using testnet coins with no monetary value to allow participants to evaluate the upgrade without using real ZEC. The activation block was mined on October 4 at 18:21:45 UTC, as confirmed by Zcash, earlier than the roughly October 6 timing developers had previously estimated. Zebra 7.0.0-rc.0, released on October 2, supported NU7 on the public testnet and urged node operators to run the release in a live network environment.
The NU7 upgrade introduces a Network Sustainability Mechanism under ZIP 235, where 60% of each block's transaction fees are removed from circulation into a reserve while miners keep the other 40%. Additionally, under ZIP 237, each block reissues a small, predictable slice of that reserve on top of its normal reward. The reserve is designed to keep paying for network security once block rewards shrink, since rewards halve every four years. The block reward is reduced to one-third of its previous amount, with the upgrade also cutting per-block rewards to preserve the ZEC issuance schedule. The amount of ZEC issued each day stays the same, so the upgrade leaves the coin's 21 million supply cap and four-year halving schedule unchanged. NU7 adjusts issuance alongside the shorter block schedule so that producing more blocks does not result in miners receiving three times as much ZEC each day. NU7 increases the difficulty averaging period by 102 blocks to better maintain long-term issuance stability with more blocks per unit of time.
The upgrade tightens shielded transaction limits significantly, allowing 330 Orchard or Ironwood actions and 300 Sapling inputs or outputs per block, with no new Sprout JoinSplits. These changes more than double Orchard throughput while cutting the worst-case sync load a spammer can impose on light wallets by about 37%. The upgrade disables transactions using Sprout, Zcash's oldest privacy system, requiring holders to move their funds before mainnet activation to retain spending capabilities. The planned retirement makes preparation relevant for affected holders, alongside the software updates required by infrastructure operators, ensuring compatibility with newer privacy systems while maintaining the network's commitment to privacy protection. NU7 also introduces new limits on shielded actions designed to control the amount of work that can be included in individual blocks, with the Zcash Foundation stating these limits are intended to protect wallets from spam while block production becomes more frequent. These restrictions aim to improve shielded transaction capacity and reduce the maximum verification load that spam transactions could place on lightweight wallets.
Developers of privacy-focused Zcash plan to add protections designed to withstand quantum computers within months as warnings about AI-assisted attacks put the broader security of cryptocurrency wallets under scrutiny. Zakura engineer Roman Akhtariev announced that developers intend to introduce new instructions allowing Zcash to verify hash-based signatures in January 2027, as reported by Zakura. The upgrade would initially protect transparent transactions, which account for about 70% of issued ZEC, while shielded payments require separate safeguards. The planned signature changes focus on transparent Zcash addresses, where transaction details are publicly visible on the blockchain, unlike shielded transactions which conceal payment information. According to ZecStats data, approximately 11.96 million ZEC sat in the transparent pool on October 9, representing 70.4% of the roughly 16.98 million coins issued. The upgraded software would produce a signature that the network checks using hashes, digital fingerprints made from secret data, using a different method to prove permission to spend that would require defeating those hashes to forge an approval. ZEC ended Thursday around $1,185, down about 11% over the preceding week, leading a drop among top cryptocurrencies after warnings about quantum attacks went viral.
The proposed timing change received overwhelming support from the Zcash community before the upgrade schedule was finalized. A private governance poll involving nearly 2.4 million ZEC found that roughly 99.9% of participating coins supported reducing the target block interval to 25 seconds, with participation representing roughly 66% of the eligible Ironwood balances recorded for the vote. Around 98.9% supported keeping Zcash's existing halving schedule, while approximately 96.6% backed February 2031 for the start of reissuance under the Network Sustainability Mechanism. Developers are scheduled to review testnet results on October 20, when they are expected to determine the mainnet activation height based on test results. Mainnet activation remains targeted for November 5 and has not yet been finalized, though no specific activation block has been set. The Zcash Foundation described the Network Sustainability Mechanism as recycling part of transaction fees into later issuance, ensuring the system maintains long-term sustainability while adapting to increased block production. Implementing this change in the main Zcash network would reduce the number of expected blocks during the current block target spacing interval to three, reducing average first-block confirmation times from 75 seconds to 25 seconds.
