Zcash NU7 triples faster, reconstructs privacy and incentives

According to Woofun AI, after the US midterm elections, the Democratic Party regained control of both houses. After experiencing traditional asset linkage shocks, ZEC performed significantly better than the market: it rose 7.45% and 6.38% on November 3 and 4, respectively, and fell only 1.21% when it generally declined on November 5. This market performance was immediately anchored by major technological changes at the Zcash network level: the NU7 upgrade was officially launched to address the core bottlenecks that have long limited its popularity as “digital cash” through underlying protocol restructuring, including confirmation delays, limited throughput, and attenuation of miner incentives.

The upgrade implemented four key changes in the technical architecture and tokenomics. First, according to the ZIP-218 proposal, the target time for network block generation was drastically reduced from 75 seconds to 25 seconds, which meant that payment confirmation speed was increased by 3 times, directly optimizing the user experience of exchange recharges and cross-chain transfers. Since the maximum block capacity remains the same, the three-fold increase in the frequency of block generation increased the original throughput of the network by 3 times; under the premise that the maximum limit of 21 million cards remains the same as the existing halving rhythm, the single block reward was reduced to about one-third of the original.

However, the ability to process private transactions has not expanded in the same proportion. According to data compiled by Woofun AI, in order to prevent nodes from being crushed by massive zero-knowledge verification requests or wallets being flooded with data, NU7 set an upper limit on the amount of blocked transactions per block, resulting in an increase of only about 2.3 times the actual capacity of newer Orchard transactions. Second, in response to the risk of shrinking security budgets that may be caused by block rewards being halved, ZIP-235 introduced a new fee allocation mechanism: 40% of the fee is paid directly to miners, and the remaining 60% are “retained” and temporarily withdrawn from circulation. Starting around February 2031, this portion of ZEC will gradually be returned as additional mining rewards to provide financial reserves for future cybersecurity without changing the four-year halving pace and the total volume limit of 21 million copies. Finally, ZIP-2003 officially banned the v4 transaction format, marking the complete decommissioning of Zcash's earliest blocking pool, Sprout, reducing protocol complexity and potential security risks.

In terms of legacy asset disposal, the Sprout pool still had around 12,226 ZEC units remaining before NU7 was activated, which translates to approximately $16 million at the price at the time of activation. With the v4 transaction format being disabled, this batch of funds has since lost its normal spending channel; ZIP-2003 has retained only a theoretical search path — it is difficult to use unless future upgrades specifically re-open exports for Sprout. The ban also covers older Sapling and Transparent v4 transactions, forcing related wallets to migrate to the new format, but existing Sapling funds can still be spent normally after the wallet is upgraded.

This clean-up clean-up clears the way for Zcash's larger roadmap. As Zcash co-founder Sean Bowe and ZK researcher Dev Ojha mentioned earlier, the network urgently needs to solve problems such as private transaction processing efficiency, wallet synchronization ability, and block transmission speed. Some researchers have sorted out the complete roadmap in this conversation and pointed out that the real core project lies in the Tachyon project—Bowe's redesign of Zcash's private payment cryptography. Currently, nodes need to separately verify zero-knowledge proofs for each blocked transaction and store a growing list of nullifiers to prevent double flowers, while Tachyon aims to aggregate many proofs into one and remove the historical burden of the node to break through the throughput ceiling.

Furthermore, this restructuring also provides a clearer path to the post-quantum privacy that Zcash pursues. At the same time, researchers are promoting private information retrieval (PIR) technology to solve the problem that wallets can locate recorded payments without scanning every transaction, and to work with a faster block transmission mechanism to jointly support network operation under high activity.

Market sentiment and technology implementation resonate at this moment. ZEC's performance was relatively resistant to decline after the Senate election, and the activation of NU7 provided substantial fundamental support for this concern: faster confirmation speed, more space for private transactions, and a sustainable miner incentive plan.

However, this was only a phased victory. NU7 has given Zcash valuable breathing room to maintain network vitality and user confidence until Tachyon is expected to completely remove the performance ceiling. At a time when Tachyon has yet to announce the exact activation date, whether Zcash can actually operate as private cash on a large scale still depends on the efficiency of the implementation of subsequent cryptographic restructuring. However, given that NU7 has successfully overcome short-term bottlenecks, market momentum is expected to continue until the next round of technological paradigm shift is completed.