Zcash's NU7 Upgrade Goes Live, Recycling 60% of Fees to Fund Future Block Rewards
The Network Sustainability Mechanism will reissue removed ZEC from 2031 within the 21 million cap, as the community debates its dev fund.
Zcash's NU7 upgrade became effective on Friday, rendering approximately $15 million worth of legacy Sprout funds unspendable. This occurred at block 3,543,405, which took place at 02:34 UTC, according to blockchain tracker ZecStats. The Sprout pool balance stands at around 12,224 ZEC, though the exact number is not specified in the source.
The upgrade significantly alters Zcash's block generation time, reducing it from 75 seconds to 25 seconds. However, the actual interval may vary depending on changes in mining difficulty. Under Zcash Improvement Proposal (ZIP) 2003, NU7 disallows version 4 transactions, which are the only format capable of spending Sprout funds. Consequently, these remaining coins cannot be transferred under the new rules, but they have not been destroyed.
The NU7 specification allows for the possibility of restoring access to the unspendable funds. This could be achieved by re-enabling version 4 transactions or implementing an alternative method to retrieve the funds. However, a warning is issued that "the ability to spend Sprout funds may never be re-enabled."
NU7 also introduces a Network Sustainability Mechanism, which deducts 60% of transaction fees from circulation. Over time, these fees will be reintroduced into the system through future mining rewards, starting around February 2031. The upgrade maintains Zcash's 21 million ZEC supply cap and halving schedule, while simultaneously limiting shielded activity to reduce wallet synchronization demands.
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