The Zcash network has officially activated the NU7 upgrade at block 3,543,405. The update introduces the Network Sustainability Mechanism, which redirects 60% of transaction fees to fund future block rewards. This mechanism aims to maintain network security as block subsidies decrease over time, with reissuance scheduled to begin in 2031 while maintaining the 21 million ZEC supply cap.
The upgrade significantly alters block parameters by reducing the target time between blocks from 75 seconds to 25 seconds. Additionally, the update retires the Sprout privacy pool, which contained approximately $16 million in assets. To improve performance, the protocol now limits the amount of private transaction activity per block, which reduces the data load for wallets scanning for payments.
The development of the mechanism was led by Shielded Labs, building on a concept previously known as the Zcash Posterity Fund. A separate proposal currently under consideration suggests that Zcash Community Grants contribute 50,000 ZEC from its treasury to the new mechanism. The community is also debating the future of the Dev Fund and the role of Zcash Community Grants.
Five organizations, including Shielded Labs and the Zcash Foundation, have established an expedited timeline for future governance decisions. Proposals are due by November 8, with voting scheduled between November 16 and November 30. If consensus is reached, the community plans to proceed with a subsequent upgrade, NU 7.1, to implement further changes.
