Key highlights:
- Zcash activated NU7 on testnet Oct. 4, with final review Oct. 20 and mainnet target Nov. 5, cutting block intervals from 75 to 25 seconds.
- NU7 introduces the Network Sustainability Mechanism, shielded action limits to prevent spam, and disables Sprout v4 transactions.
- Institutional adoption is growing as Grayscale filed for a Zcash High Income ETF and a 2x leveraged ZEC ETF after its spot ZCSH product grew from $260M to $914.5M.
Zcash has started the countdown to its next major network upgrade after activating NU7 on its public testnet, giving developers and infrastructure operators several weeks to test changes that could make the privacy-focused blockchain process transactions much faster.
According to Zcash testnet block data, the activation block was mined on Oct. 4 at 18:21:45 UTC, earlier than the roughly Oct. 6 timing developers had previously estimated.
Zcash later confirmed that NU7 was live on the testnet, and it is now running on Zcash’s public test network, where developers can observe how the new consensus rules perform before they are considered for the mainnet.
A final decision is scheduled for Oct. 20, while Nov. 5 remains the target date for the production rollout.
Zcash targets faster transactions with a major network upgrade
The most visible change under Zcash’s NU7 upgrade is a reduction in the network’s target block interval from 75 seconds to 25 seconds.
The change is designed to produce three blocks in the time previously required for one, potentially reducing confirmation times for deposits, payments, and other transactions.
A transaction requiring three confirmations, for example, would have a targeted wait of about 75 seconds instead of 225 seconds, although actual block times can vary.
The faster block schedule will not increase the rate at which new ZEC enters circulation. NU7 reduces the reward per block to one-third, allowing the network to maintain its existing issuance schedule despite producing blocks more frequently.
The upgrade also introduces the Network Sustainability Mechanism, which changes how transaction fees are distributed. Under NU7, miners will receive 40% of transaction fees, while the remaining 60% will be placed in a reserve rather than immediately entering circulation.
The reserve is designed to support future mining rewards as newly issued ZEC declines, linking current network activity to future security.
NU7 also introduces limits on shielded actions to control the amount of computational work included in each block. The measure is intended to reduce the risk of excessive activity or spam affecting wallet performance and network operations.
Together, the changes are designed to make Zcash confirmations faster while maintaining its existing issuance schedule and strengthening the network’s long-term sustainability.
What Zcash users need to know before the NU7 upgrade
There is also an important migration requirement for some Zcash users, as NU7 will disable version 4 transactions, which are used by Zcash’s oldest Sprout shielded pool.
ZEC remaining in Sprout will need to be moved before the mainnet activation if users want to retain the ability to spend those funds through the existing system. The current testnet activation does not affect mainnet funds.
The upgrade has received strong support from Zcash holders, with a private governance poll involving nearly 2.4 million ZEC recording about 99.9% support for reducing the target block interval to 25 seconds.
Around 98.9% backed maintaining the existing halving schedule, while roughly 96.6% supported February 2031 as the starting point for reissuance under the Network Sustainability Mechanism.
Zcash is entering this test period after a difficult few months for its protocol, as the Ironwood upgrade went live on July 28 following a vulnerability discovered in the Orchard shielded pool that created uncertainty over whether counterfeit ZEC could theoretically have been generated without detection.
Developers found no evidence that the flaw had been exploited, but the network introduced a separate shielded pool and accounting safeguards to address the supply uncertainty.
Infrastructure providers have also been preparing for NU7, as the Zcash Foundation released a Zebra 7.0.0 release candidate with testnet support on Oct. 2, while Zakura, another Zcash node implementation, received its NU7 implementation on Oct. 1.
Gemini had already migrated its Zcash infrastructure to Zakura ahead of the upgrade.
Zcash is upgrading as investors pile into new ZEC products
The timing also comes as institutional interest in ZEC is expanding as Grayscale has filed for a Zcash High Income ETF that would use options linked to its spot Zcash ETF to generate option-premium income and make distributions to investors.
The asset manager has also filed for a 2x leveraged Zcash ETF after its spot Zcash product grew from about $260 million in assets at launch to $914.5 million by the week ending Sept. 18, when it recorded about $98.2 million in inflows.
ZEC was trading around $1,315.55, down 1.8% over 24 hours and 15.2% over seven days at the time of the latest data.
The token remained up 31% over 30 days and more than 730% over the past year, showing that the recent pullback has occurred after a much larger recovery.
Source:: Zcash Starts the Countdown to November With NU7 Testnet Activation