Zcash's NU7 technology helps create contours three times faster
Zcash developers have activated the target for NU7, the next major upgrade to the network, after all Zcash development organizations reached a consensus on its content and timeline.
9/21/20264 min read
Increase block creation speed without adding coins.
Triple-frequency block creation, if left unchecked, would triple the rate of new ZEC issuance. ZIP 218 prevents this by reducing the reward paid per block to one-third and tripling the number of blocks between halvings, thus keeping the total daily issuance and the scheduled time of each halving constant. Therefore, this change is entirely related to latency. It has nothing to do with Zcash's monetary policy. This separation is intentional, and the vote of coin holders reinforced that.
Coin holders were given another option: replace the Bitcoin-style halving with a smoother, incremental release curve instead of a discrete, stepped one. They rejected this, with 98.9% of the approximately 2.4 million ZEC voting to maintain the current halving schedule. Weighted by holdings, 99.9% favored shortening the block creation interval. The result is a faster network while the release remains as intuitive as Bitcoin holders understood it.
Three times faster on sculpting
Articles have described NU7 as enabling up to three times faster private payments, which is accurate in terms of block creation time, but misleading in terms of capacity. NU7 also imposes new limits on each block: a maximum of 330 actions, including the 330 Orchard action limit and 25 Sprout JoinSplits. Because each block has a limit, tripling the number of blocks does not triple throughput. Test data shows that protected transaction throughput increased from approximately 2.9 transactions per second to 6.6, an increase of about 2.3 times, not three times.
The articles describe these as Orchard actions. Since the Orchard pool itself was shut down in July and replaced by Ironwood, these figures appear to describe a protected action format rather than activity within a closed pool, although the articles don't clarify this point. There's also a clear discrepancy in reporting the Sprout JoinSplit limit in the same upgrade that disables the transaction version used for spending from Sprout, which may reflect limitations imposed by consensus rules in general rather than intended use.
The block-per-block load limit explains another reported result: in a load test scenario, the daily wallet synchronization bandwidth is expected to drop from 271 MB to 169 MB. This is more significant for Zcash than for transparent chains, because protected wallets have to scan every block to find out which transactions belong to them. The worst-case load limit per block makes that scan cheaper for lightweight clients, which is one of the practical hurdles for protected wallets on mobile devices.
The decision to discontinue support for Sprout continues Ironwood's logic.
The disabling of transactions in Version 4 prevents further spending from Sprout, Zcash's original protected pool dating back to the network's launch in 2016. The implications of this are directly related to the Orchard vulnerability. Each protected pool is a separate cryptographic system that needs protection, and each pool whose supply cannot be independently verified is where a potential integrity vulnerability can lurk. Ironwood addressed that issue with Orchard by sealing it behind a mechanism that limits withdrawals to verifiable deposits. The cessation of spending from Sprout narrows the set of legacy systems the network is using. The broader pattern across the two upgrades is a network deliberately minimizing its cryptographic attack surface after discovering the costly expense of an unverifiable pool.
Security Budget
The NSM mechanism temporarily removes approximately 60% of transaction fees from circulation and reuses them as mining rewards starting in February 2031. This isn't burning. It's a reserve that helps move fee revenue forward over time. The purpose relates to a problem every Proof-of-Work chain with a halving mechanism eventually faces: as block rewards diminish through successive halving cycles, miners become increasingly dependent on fees, and if fees aren't sufficient, the security budget shrinks. Accumulating fees now and paying them later smooths miner revenue throughout the halving cycle instead of letting it be affected by fee volume at any given time.
There are two conditions to consider. Zcash fees have historically been low in absolute terms, so the amount accumulated over a short period may be negligible, and the value of this mechanism is more structural than immediate. And this design choice reflects the security budget debate that Bitcoin has never resolved, making NU7 a viable test case for a solution.
Assessment and Conclusion
The activation of the test network on October 6th allows node operators, explorers, exchanges, and infrastructure providers a month of testing before the target date. The review on October 20th will set the final activation date, and a delay beyond November 5th would be insignificant given the frequent changes in upgrade progress during the final testing phase.
Market signals surrounding the network have been very positive throughout September. Grayscale's Zcash ETF, ZCSH, is undergoing a 3-for-1 stock split, an action that typically occurs after sustained price increases. A smoothly executed NU7 upgrade would follow the crisis-induced Ironwood upgrade with a planned and uncontroversial upgrade, which could be more meaningful proof of a project whose credibility was severely damaged in May.
Disclaimer: The content in this article is for informational, research, data analysis, and reference purposes only regarding the cryptocurrency market. All opinions, assessments, forecasts, or opinions reflect the author's perspective at the time of publication and do not constitute investment advice, solicitations for buying or selling, trading recommendations, advertising, marketing, or promotion of any financial products, services, or cryptocurrencies. Mentions of projects, tokens, protocols, exchanges, wallets, or cryptocurrency service providers (CASPs) are for research, analysis, or informational purposes only and should not be construed as endorsements, recommendations, or guarantees in any way. HCCVenture does not broker, advertise, market, promote, or connect users in Vietnam with any cryptocurrency services from CASPs. HCCVenture does not accept asset custody, investment mandates, manage assets, or execute transactions on behalf of clients. All investment decisions are made entirely through the reader's own research (DYOR), evaluation, and responsibility; HCCVenture is not liable for any losses or damages arising from the use of or reliance on the information presented in this article.
Compiled and analyzed by HCCVenture
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