Zcash NU7 upgrade: 25-second blocks and a 60% fee reserve

Key takeaways

• The Zcash NU7 upgrade cuts the target block time from 75 seconds to 25 seconds under ZIP 218. Developers chose mainnet block 3,543,405 for activation, with a target date of Nov. 5, 2026.
• Each block's reward is divided by three and the halving interval is tripled, so daily ZEC issuance (about 1,800 ZEC) and the four-year halving rhythm stay the same.
• A new Network Sustainability Mechanism (NSM) takes 60% of every block's transaction fees out of circulation and slowly pays it back to miners through future blocks. The 21 million ZEC cap does not change.
• NU7 went live on the public testnet in early October at block 4,465,026. Zebra developers have since fixed several node sync stalls, and a stable Zebra 7.0.0 release was still pending as of Oct. 21.
• Node operators must upgrade before activation. Wallets and services must stop creating version 4 transactions, and any funds left in the old Sprout pool become unspendable once NU7 activates.

The Zcash NU7 upgrade cuts the target block time from 75 seconds to 25 seconds, so payments get their first confirmation about three times faster. Developers chose mainnet block 3,543,405 for activation, targeting Nov. 5, 2026. Daily ZEC issuance is unchanged.

What is the Zcash NU7 upgrade?

NU7 stands for "Network Upgrade 7," the seventh coordinated consensus change since Zcash launched. ZIP 259, the deployment specification, lists the Zcash Improvement Proposals (ZIPs) included in it:

• ZIP 218: 25-second block target spacing.
• ZIP 235: removes 60% of transaction fees from circulation.
• ZIP 237: the Network Sustainability Mechanism, in a "halving-preserving" form.
• ZIP 2003: disallows version 4 transactions.
• ZIP 207 and ZIP 214 (revised) and ZIP 2008: adjust the development-fund streams and their addresses to the new block schedule.

Decrypt reports that five teams build Zcash software and agreed unanimously on this scope: the Zcash Foundation, Project Tachyon, Valar Group, ZODL and Shielded Labs. ZEC holders voted on the main design choices first. According to Decrypt and Cointelegraph, 98.9% of the votes cast backed keeping Bitcoin-style halvings, and 99.9% of the ZEC-weighted vote backed faster blocks. Decrypt says about 2.4 million ZEC took part, roughly 66% of the eligible pool.

How do 25-second blocks work?

Under ZIP 218, the network's difficulty adjustment targets one block every 25 seconds instead of one every 75. The Zcash Foundation says this brings the average wait for a first confirmation down to about 25 seconds. For users, a shielded payment shows its first confirmation roughly three times sooner.

Faster blocks affect much more than the headline number, so ZIP 218 also rescales several network parameters to keep wall-clock behaviour about the same:

Source: ZIP 218 specification (zips.z.cash). Blocks per day are calculated from the target spacing.

ZIP 218 also sets new per-block limits on shielded activity. Each block can include up to 330 Orchard actions, a separate 330 for the newer Ironwood pool, and 300 Sapling inputs and outputs, all within a shared budget of 330. No new Sprout JoinSplits are allowed. The specification estimates that Orchard throughput rises from about 2.9 to 6.6 transactions per second for typical two-action payments. It also estimates that worst-case bandwidth for syncing a shielded wallet falls from about 270.5 MB to 169.1 MB per day.

Why does the block reward drop by two-thirds?

Three times as many blocks means each block has to pay out a third as much, or issuance would triple. ZIP 218 divides the per-block subsidy by three and multiplies the halving interval by three, from 1,680,000 to 5,040,000 blocks. Before NU7, 1,152 blocks a day at 1.5625 ZEC each produce 1,800 ZEC. After NU7, 3,456 blocks at about 0.5208 ZEC produce the same amount. A halving still arrives about every four years.

The development-fund streams set out in ZIP 214 (an 8% stream and a 12% stream) get the same treatment, so they receive the same amounts per unit of time. Rounding at the zatoshi level (one hundred-millionth of a ZEC) trims total scheduled issuance very slightly. ZIP 218 puts the shortfall at about 0.68 ZEC, which ZIP 237 could later reissue.

What is the Network Sustainability Mechanism?

The Network Sustainability Mechanism changes how fees are handled. Today, miners keep all transaction fees in the block they mine. Under ZIP 235, 60% of each block's total fees is removed from circulation, with the amount rounded down so miners keep any fraction, and the remaining 40% goes to the miner. The Zcash Foundation tells miners that, after activation, coinbase transactions may claim only that 40% share.

The removed fees are not destroyed for good. ZIP 237 adds them to an "NSM value balance," which on mainnet starts at about 368.58 ZEC of unclaimed pre-NU6 value. From a set block height onward, each block pays out a small fraction of that balance (1,375 parts in 10 billion) on top of the normal subsidy. The ZIP's own example works out to about 0.00005 ZEC per block at first. Because the payout is a fixed fraction of a shrinking balance, the reserve roughly halves over each halving period. The existing halving schedule and the 21 million ZEC maximum supply stay the same.

ZIP 259 sets the mainnet reissuance height at block 8,939,664. At 25 seconds a block, that is about 4.3 years after activation. Decrypt and Cointelegraph report that reissuance starts in February 2031.

The amounts are small for now. ZIP 235 estimated, when it was drafted, that Zcash produced about 369.7 ZEC in fees a year, of which about 221.8 ZEC would be removed. Supporters see the mechanism as groundwork for keeping miners paid as block subsidies keep halving, rather than as a near-term supply shock.

What has the NU7 testnet shown since activation?

The Zcash Foundation shipped Zebra 7.0.0-rc.0, a release candidate of its Rust node, on Oct. 2. NU7 activated on the public testnet at block 4,465,026. Crypto Briefing reported the switch on Oct. 4, and the Zebra team's tracking issue dates it to around Oct. 6. On testnet, the adjusted third halving is set for block 4,497,948 and NSM reissuance for block 7,305,222.

The testnet has not run flawlessly, according to the Zebra project's public mainnet-readiness tracker on GitHub:

• Operators reported testnet nodes that stopped syncing after rc.0. One issue describes a node following a losing branch during bursts of minimum-difficulty blocks.
• Fixes for several of these sync stalls were merged between Oct. 12 and Oct. 19. A few related fixes were still under review on Oct. 20 and 21.
• The network seeder's activation observer saw about 14 of 31 peer groups ready on testnet. That is below its 75% quorum, so the seeder could not confirm NU7 activation on its own.
• A stable Zebra 7.0.0 is the final gate. The tracker says it will include selected fixes plus three security fixes that are not yet public, and the mainnet height still had to be wired into Zebra's code.

Testnet exists to catch problems like these before mainnet. The open question is whether every blocking fix lands in a stable release far enough ahead of activation for operators to upgrade.

When does NU7 activate on mainnet?

ZIP 259 sets mainnet activation at block 3,543,405, with consensus branch ID 0x77190AD9. The Zebra tracker records that the height was decided on Oct. 20. TokenPost reported that the change was merged into the deployment proposal on Oct. 21, although the ZIP itself is still marked "Proposed." Decrypt and Cointelegraph reported Nov. 5 as the target date. The Zebra tracker estimates the block will arrive around 00:45–02:35 UTC on Nov. 6, which is the evening of Nov. 5 in the Americas. Block times vary, so the exact moment will drift by a few minutes a day.

What node operators, wallets and exchanges must do

Node operators and miners

• Upgrade before the activation height. ZIP 259 waives the usual rule that old software shuts itself down before an upgrade. Nodes running outdated software can therefore stay online and quietly follow the old chain, so operators should not wait for their node to stop. TokenPost reports that Zebra 6.4.x is set to stop around Nov. 2.
• Expect peer changes. NU7 nodes prefer other NU7 peers before activation and disconnect peers with older protocol versions after it. The mainnet minimum protocol version is 170190.
• Use fresh block templates. The Zcash Foundation advises miners and pools to request a new template rather than editing the transaction set, and to claim only 40% of fees in the coinbase.
• Update dependent services. According to the Foundation, tools that read Zebra's state database directly, such as Zallet's Zebra backend or Zaino's read-state backend, must move to a compatible build at the same time as the node.

Wallets and payment services

• Stop building version 4 transactions for inclusion after activation. ZIP 259 notes this applies to transparent and Sapling transactions as well as Sprout ones.
• Check pending and pre-signed transactions. Saved or offline-signed v4 transactions will become invalid after activation.
• Move Sprout funds now. Version 4 is the only format that can spend from the Sprout pool, so any balance left there becomes unspendable after NU7, according to ZIP 259 and TokenPost. Before moving funds, make sure your wallet backup is in order; our checklist on how to secure a crypto wallet seed phrase covers the basics.
• Developer Sean Bowe told Cointelegraph that NU7 "should not significantly affect wallets" and introduces no new transaction formats.

Exchanges, explorers and indexers

• Run an NU7-ready node before the activation height, and check deposit-confirmation policies. A fixed number of confirmations now takes about a third of the time it used to.
• Block explorers and indexers "may require adjustments," Bowe said, according to Cointelegraph. Zebra's new getblock verbosity level 3 adds input and fee data that explorers may find useful.
• Exchanges commonly pause ZEC deposits and withdrawals around network upgrades. Users should watch their platform's own notices, as no exchange schedule had been published in the sources reviewed.

How has ZEC traded around the upgrade news?

Price is context here, not a forecast. CoinDesk reported that ZEC traded around $1,260 early on Oct. 21 UTC, up about 11% over 24 hours, after developers set the November date. The token was still down about 12% over the month. As of 05:12 UTC on Oct. 22, CoinGecko data showed ZEC at about $1,285, up 1.7% over 24 hours, with a market capitalization of about $21.8 billion. Decrypt notes that ZEC rose more than 2,500% over the past year. That gain included a 38% drop in July, after the Ironwood upgrade patched a four-year-old flaw that could have allowed counterfeit ZEC. Prices of privacy coins have been highly volatile, and upgrades can be delayed or run into problems.

What it means

NU7 is mainly a usability and economics upgrade, not a privacy one. For everyday users, the visible change is faster confirmations. The issuance math is designed to stay neutral: the same ZEC per day, the same halving rhythm and the same supply cap. The fee mechanism is the longer-term change. It moves part of miner income from fees paid today to a reserve paid out from 2031, and supporters argue it could help fund security as the block subsidy shrinks.

The near-term risks are operational. Testnet exposed sync problems in Zebra, and the stable release was still pending two weeks before activation. Retiring Sprout and v4 transactions also creates a firm deadline for anyone holding old-format funds or pre-signed transactions. Whether NU7 activates smoothly on Nov. 5–6 will depend on how quickly node operators, pools and exchanges upgrade once the final software ships.

For more on how other networks are changing their base layers, see our explainer on Solana's Alpenglow upgrade, our guide to Ethereum's fast finality proposal, and why Ethereum's Glamsterdam testnet upgrade was postponed. For market context, read our crypto daily brief for Oct. 21 and our report on bitcoin ETF flows and the crypto market. Our guide to tokenized stocks covers another fast-moving corner of crypto.

Sources

• ZIP 259: Deployment of the NU7 Network Upgrade (zips.z.cash)
• ZIP 218: 25-second Block Target Spacing (zips.z.cash)
• ZIP 235: Remove 60% of Transaction Fees From Circulation (zips.z.cash)
• ZIP 237: Network Sustainability Mechanism, Halving-Preserving Issuance (zips.z.cash)
• Zcash Foundation: Zebra 7.0.0-rc.0, NU7 Arrives on Testnet
• Zebra 7.0.0-rc.0 release notes (GitHub)
• Zebra tracking issue: NU7 Mainnet activation readiness (GitHub)
• CoinDesk: Zcash extends gain after setting upgrade date (Oct. 21, 2026)
• Cointelegraph: Zcash NU7 November mainnet activation
• Decrypt: Zcash upgrade to make private payments 3x faster
• Crypto Briefing: Zcash activates NU7 on testnet
• TokenPost: Zcash sets NU7 mainnet height at block 3,543,405
• CoinGecko: Zcash (ZEC) price data, as of 05:12 UTC, Oct. 22, 2026

This article is for information only and is not investment advice.