Zcash sets NU7 activation for block 3,543,405 as ZEC rallies 12%

Zcash developers locked the NU7 network upgrade to block 3,543,405 on Oct. 21, fixing activation for about Nov. 5. ZEC jumped roughly 12% to near $1,300 that day, touched about $1,360 the next morning, then faded — by Oct. 23 it traded near $1,214, down about 7% in 24 hours.

Crypto Brief

Key Takeaways

4 Points24s Read

• 01The date is set–NU7 activates at mainnet block 3,543,405 — roughly Nov. 5 — after the ZIP editors merged the height into the official specifications on Oct. 21.
• 02What changes–Target block time drops from 75 to 25 seconds; 60% of transaction fees flow into a sustainability reserve until about 2031; the legacy Sprout pool retires.
• 03The market’s verdict–ZEC popped ~12% on Oct. 21, then gave it back: down ~7% in 24 hours to about $1,214 (CoinGecko, Oct. 23 ~02:20 UTC), leaving it roughly flat over seven days despite nearly 29% of supply sitting in shielded pools.
• 04What to watch–Node operators must run NU7-ready software (Zebra 7.0.0 shipped Oct. 22) before block 3,543,405; about 22,300 ZEC left in Sprout becomes unspendable at activation.

The block number that replaced a question mark

Zcash upgrades do not switch on at a calendar date. They activate at a block height — the running count of blocks on the chain — and every node starts following the new rules at the same block. For NU7, that number is now written into the protocol’s rulebook: 3,543,405.

The change landed on Oct. 21, when developer Sean Bowe merged pull request #1405 in the zcash/zips repository — the official Zcash Improvement Proposal specs — at 20:06 UTC. “This sets the NU7 Mainnet activation height to 3543405, which the ZIP editors agreed, and makes the other changes to the ZIPs that are needed alongside it,” the PR body states. The diff for ZIP 259, the NU7 deployment spec, is surgical: the mainnet activation line changes from “TBD (To be set on OCT 20)” to “3543405”, and the ZIP’s status moves from Draft to Proposed.

NU7: before and after block 3,543,405

Parameter	Before NU7	After NU7
Target block time (ZIP 218)	75 seconds	25 seconds
Blocks per day (TECHi calc.)	~1,152	~3,456
Wait for 3 confirmations (TECHi calc.)	~225 seconds	~75 seconds
Transaction fees to miners	100% of fees	40% now; 60% diverted to the NSM reserve (ZIP 235)
Diverted fees paid out	n/a	Reissued as subsidies from block 8,939,664 (~Feb. 2031, ZIP 237)
ZEC supply cap	21,000,000	~0.50 ZEC lower — the rounding shortfall stays below the cap (ZIP 237)
Legacy Sprout pool	Usable (oldest privacy pool)	Retired — unmigrated funds unspendable (ZIP 2003)

The calendar estimate attached to that block is about Nov. 5–6, 2026. Because block production is not perfectly uniform, the exact moment shifts slightly with the chain; downstream tooling puts it near 00:50 UTC on Nov. 6. The NU7 ZIPs moved to Proposed status alongside the height: ZIP 218 (25-second block spacing), ZIP 235 (fee removal), ZIP 237 (the sustainability mechanism’s accounting), ZIP 2003 (banning old transaction versions), ZIP 2008, plus revised editions of ZIPs 207 and 214. Notably, ZIP 226’s deployment section no longer schedules shielded assets (ZSAs) for NU7 — that ambition is out of this upgrade.

This is the last big milestone before the switch. NU7 already activated on Zcash’s testnet on Oct. 4, at testnet block 4,465,026, giving developers roughly a month of live-fire testing before mainnet. On Oct. 22, the Zcash Foundation published stable Zebra 7.0.0, the first stable node release that carries the NU7 activation: “Mainnet nodes must upgrade before the activation height to stay on the consensus chain.”

What NU7 actually changes

NU7 is the most consequential Zcash upgrade since the NU6 series, and the merged diffs let us reconstruct exactly what the chain looks like before and after block 3,543,405.

The headline change is speed. ZIP 218, titled “25-second Block Target Spacing,” cuts the target block interval by two-thirds. At target spacing the chain goes from about 1,152 blocks a day to about 3,456, and a payment that waited roughly 225 seconds for three confirmations clears in about 75. Per-block mining subsidies are recalibrated so the issuance schedule does not triple — faster blocks do not mean three times as much new ZEC.

The more structural change is the money plumbing. Under ZIP 235, 60% of every transaction fee is removed from circulation into the Network Sustainability Mechanism, a protocol reserve, while miners keep 40% immediately. ZIP 237’s accounting then reissues the accumulated reserve as block subsidies starting at block 8,939,664 — roughly February 2031 — smoothing miner revenue across the network’s upcoming halving cycles. The merged ZIP 237 diff works the arithmetic from the new activation height: the third halving lands at block 6,132,390, and reissuance begins at 8,939,664.

There is also a small, tidy detail the ZIP editors insisted on getting exactly right. Because ZIP 218’s subsidy rounding introduces a tiny issuance shortfall, the effective supply cap falls by about 0.50 ZEC, to roughly 0.68 ZEC below the protocol’s hard MAX_MONEY. “Total issuance never exceeds the existing supply cap,” the merged ZIP 237 text states, “but falls slightly short of it, because the NSM does not reissue the shortfall that the rounding of the post-NU7 block subsidy introduces.” Half a coin changes nothing economically; it shows how precisely the rules are being pinned down weeks before activation.

One more TECHi calculation from the merged diffs: the same ZIP 218 update refreshes shielded-pool balances as of Oct. 21 — about 4.11 million ZEC in Ironwood (83.0% of shielded funds), 473,700 in Sapling (9.6%), 347,700 in Orchard (7.0%), and 22,300 in Sprout (0.4%). That is roughly 4.95 million ZEC behind zero-knowledge encryption. Against CoinGecko’s 17.001 million ZEC circulating supply, about 29% of all ZEC is shielded — the privacy feature is no longer a side experiment; it is where nearly a third of the supply lives.

The market’s answer: pop, then unwind

Traders had been waiting for exactly this — a fixed date — and they moved the day the height was merged. ZEC rose roughly 12% in the 24 hours to Oct. 21, trading around $1,260–$1,300 as the activation height went into the spec. The rally extended into the next morning: ZEC touched about $1,360 early on Oct. 22, its highest print since the September peak near $1,698.

Then sellers took over. By the time CoinGecko’s data was read on Oct. 23 at about 02:20 UTC, ZEC had fallen to $1,213.70 — down 7.1% in 24 hours, in a 24-hour range of $1,187.54–$1,309.50. The seven-day change was −1.3%: the activation-date pop had almost entirely unwound. Market capitalization sat at $20.64 billion, keeping ZEC ranked around 10th among cryptocurrencies, with 24-hour spot volume of $1.09 billion and 17.001 million ZEC circulating.

Derivatives amplified the move. Perpetual-futures open interest reached about $4.55 billion against roughly $1.15 billion in daily spot volume — about four times leverage on the pop, the classic setup for a fast unwind once the catalyst was in the price. Institutional flow, meanwhile, is turning into a real variable for ZEC: flow trackers recorded a $1.61 million net inflow into the Bitwise spot ZEC ETF on Oct. 20, reversing a $10.4 million outflow the day before, with cumulative net inflows of about $169.7 million since late August.

The contrast with TECHi’s earlier Zcash coverage is instructive: in September the story was a rally meeting a vote on future coin issuance; now the issuance mechanics are settled law and the market is trading the countdown. For context on how crypto’s other big protocol upgrades are landing this week, see Solana’s Alpenglow activation and Ethereum’s postponed Hoodi test.

The Sprout deadline and the node upgrade

Not every holder is ready. NU7 disables version-4 transactions, which means no Sprout transaction can be included in a block after activation. The merged diffs put about 22,300 ZEC — 0.4% of shielded funds — still sitting in Sprout. Any of it left there at block 3,543,405 becomes unspendable. Holders must move it to Sapling or Orchard before the deadline, and the ecosystem has been pushing migration tooling and warnings ahead of the cutoff.

Node operators have their own deadline, and the tooling arrived this week. The Zcash Foundation’s stable Zebra 7.0.0, published Oct. 22, activates NU7 at height 3,543,405 and advertises protocol version 170190. The release notes carry a blunt instruction: mainnet nodes must upgrade before the activation height or fall off the consensus chain. The release also bumps Zebra’s state database from format v28 to v29 — the migration happens on first start without a resync, but Zebra 6.x cannot read the new format, so downgrading afterward requires a full resync; the Foundation advises backing up the state directory first. And there is a shorter fuse than usual: this release is supported for 8 weeks instead of the usual 12.

What to watch

The next two weeks are a checklist. First, block 3,543,405 itself: do miners, exchanges, wallets, and indexers complete their upgrades in time, or does the activation expose stragglers? Second, the Sprout migration: 22,300 ZEC is small against the supply but real money for its holders, and it goes to zero if they miss the block. Third, the fee economics in practice — miners take a 60% haircut on fee income at activation in exchange for the 2031 reissuance promise, a trade the market will start pricing immediately. And fourth, whether ZEC re-prices as the date hardens: the Oct. 21 pop faded fast, but the countdown to Nov. 5 has barely begun.