Zcash’s NU7 upgrade went live on November 6, 2026, with a long-term security funding mechanism shaped by disagreement over how the privacy network should issue coins. Community panels had supported replacing halvings with a smooth issuance curve, but coinholders did not. The activated design keeps the halvings.
According to Decrypt’s original report, published November 6, 2026, at 18:13:27 UTC+8, NU7 activated at block 3,543,405. It also shortened the target interval between blocks and retired Zcash’s original privacy pool, leaving coins worth about $16 million locked in it.
A funding mechanism shaped by disagreement
The upgrade’s Network Sustainability Mechanism, or NSM, addresses a question Zcash inherited from Bitcoin: as block subsidies decline with successive halvings, will transaction fees alone be enough to pay miners to secure the network?
Under the new mechanism, 60% of transaction fees are removed from circulation and gradually reissued through future block rewards. Reissuance is scheduled to begin in 2031, following a smooth curve layered on top of the existing halving schedule. The 21 million ZEC supply cap remains intact.
Jason McGee of Shielded Labs, the development organization behind the mechanism, described the activation as a major milestone. He said the NSM was the organization’s first project and grew out of developer Nate Wilcox’s earlier proposal, originally called the Zcash Posterity Fund.
Shielded Labs’ initial design would have replaced halvings altogether. After community panels and coinholders took different positions, an alternative preserving halvings was developed.
“We still think the original design was simpler and better, but we respect the process that led us here,” McGee wrote. “It should be difficult to change the protocol, and the process should resist capture by any single organization, group, or influential individual.”
A separate proposal remained under consideration at the time of the report: requiring Zcash Community Grants, or ZCG, to contribute 50,000 ZEC from its treasury to the NSM. That contribution was not reported as an approved part of NU7.
Faster blocks and a retired privacy pool
According to the Zcash Foundation, NU7 cut the target time between blocks from 75 seconds to 25 seconds. It also retired Sprout, Zcash’s original privacy pool introduced in 2016, leaving approximately $16 million worth of coins locked in the pool.
Faster blocks carry a trade-off: a greater risk of orphan blocks—valid blocks discarded because another miner’s block reaches the rest of the network first.
Zakura developers tested 80 nodes across 11 regions, with every block full of private transactions. They measured an orphan rate of 3.43% with 25-second blocks, compared with 1.57% at 75 seconds. Those developers, who had proposed a quantum privacy fix for shielded swaps the previous month, expected the live network’s orphan rate to remain below 1%, because actual mining is more concentrated and blocks are much less full. That figure was an expectation, not a reported live-network result.
NU7 also limits private transaction activity per block, reducing the amount of data wallets must scan to find payments, according to the upgrade specification.
The next community decision: development funding
The activation took place amid a separate debate over ZCG’s future and its share of the Dev Fund, the portion of block rewards used to pay for development.
The five organizations coordinating Zcash’s coinholder voting—Project Tachyon, Shielded Labs, Valar Group, the Zcash Foundation and ZODL—set an expedited proposal and polling schedule. They said “tensions were high” and warned that a prolonged debate risked “deepening divisions within the Zcash community.”
At the time of publication, proposals were due by November 8, 2026, with coinholder and community-panel polls scheduled for November 16–30. The organizations said they would support a further upgrade, NU 7.1, if rough consensus emerged around a proposal.