Zcash has activated its NU7 network upgrade on mainnet at block 3,543,405, reached on Nov. 5. The update makes a major change to the chain’s pacing by reducing the target time between blocks from 75 seconds to 25 seconds.

The upgrade also revises block rewards so that new ZEC continues entering circulation at roughly the same overall rate despite the faster block cadence. At the same time, the number of blocks between halvings has been tripled.

Faster blocks without faster issuance

The headline change in NU7 is the threefold reduction in target block time. By shortening the interval between blocks, Zcash will produce blocks more frequently than before, but the protocol changes accompanying the upgrade are intended to prevent that shift from accelerating the rate of new coin issuance.

To do that, block rewards are being adjusted in tandem with the new schedule. The network will also now go through three times as many blocks before each halving, a change that keeps the broader issuance structure aligned with the new timing model rather than simply increasing the number of reward events.

Network Sustainability Mechanism goes live

NU7 also introduces the Network Sustainability Mechanism, or NSM, developed by Shielded Labs. The mechanism is designed to address a long-running question for proof-of-work systems: whether transaction fees on their own will eventually be enough to support network security as block subsidies decline over time.

Under the NSM, 60% of Zcash transaction fees will be removed from circulation and later reissued through future block rewards. According to the proposal, this does not alter Zcash’s fixed supply cap of 21 million ZEC because the funds are recycled rather than newly created.

That reissuance is scheduled to start at block 8,939,664, which is expected to be reached in 2031. The recycled funds are set to be distributed along a smooth curve on top of the existing halving schedule, not as a replacement for it.

Older transaction type disabled

Another effect of NU7 is the disabling of version 4 transactions. Under the new rules, that means funds still sitting in Zcash’s original Sprout privacy pool can no longer be spent.

The source article says about 12,224 ZEC remain locked in the Sprout pool. With v4 transactions disabled, those coins are effectively left inaccessible on the network.

Proposal for extra support remains under review

Separate from the activated upgrade, another proposal is still being considered. It would require Zcash Community Grants, or ZCG, to contribute 50,000 ZEC from its treasury to the mechanism.

If that proposal is approved, the added funds could provide further support for future block rewards as the current subsidy continues to decline. For now, the confirmed next step in the NU7 changes is the eventual start of NSM reissuance at block 8,939,664, currently expected in 2031.

Source: cryptopotato.com