Zcash NU7 Upgrade Freezes $16 Million in Legacy Sprout Funds
Legacy shielded pool retired as network triples block speed
Roughly $16 million in Zcash became effectively frozen Friday when the network’s NU7 upgrade went live at block 3,543,405, cutting off the only transaction pathway for funds held in the original Sprout shielded pool.
The upgrade, which activated at 02:34 UTC, implements ZIP 2003 — a proposal that disallows version 4 transactions across the network. Version 4 is the sole format capable of moving coins out of Sprout, Zcash’s first shielded pool launched in 2016. Without it, the 12,224 ZEC remaining in that pool can no longer be spent, even by holders with valid private keys.
The coins are not burned. They remain part of Zcash’s 21 million supply cap. But the mechanism to transfer them has been removed. ZIP 2003 leaves the door technically ajar for a future upgrade to restore access, though the specification warns that possibility may never materialize.
Holders saw this coming. In the week before activation, roughly 10,000 ZEC exited the Sprout pool, drawing the balance down from about 22,263 ZEC. The exodus suggests most large holders migrated to newer shielded protocols — Sapling, Orchard, and the recently activated Ironwood — which offer better efficiency and lower synchronization costs.
Maintaining the Sprout transaction machinery had become a liability. Developers cited accumulating complexity and potential security vulnerabilities in the old code paths. Retiring them simplifies the protocol and reduces the attack surface.
NU7 does more than retire legacy code. The target block interval drops from 75 seconds to 25 seconds, tripling confirmation speed in theory. Exchanges requiring three confirmations could see wait times fall from nearly four minutes to roughly 75 seconds, once mining difficulty adjusts to the new target.
A Network Sustainability Mechanism also takes effect. Sixty percent of transaction fees are now removed from circulation and reserved for future reissuance as mining rewards starting around February 2031. Miners keep the remaining 40 percent. The design aims to sustain network security as block rewards halve, without raising the supply cap.
Per-block limits on shielded activity and a reduced daily download cap — 169 MB, down from 271 MB — aim to ease the burden on node operators. Those operators were already instructed to migrate from the deprecated zcashd to Zebra 7.0.0, the Zcash Foundation’s consensus implementation.
