Zcash is heading into its NU7 network upgrade, and with it comes the prospect of a “soft freeze” on roughly $30 million worth of ZEC.
On Oct. 20, Zcash core developer Sean Bowe submitted a proposal to activate NU7 on mainnet at block 3,543,405, which is expected around Nov. 5. After activation, Zcash’s block interval would fall from 75 seconds to 25 seconds. The mining reward per block would be cut to one-third of its current level, leaving daily issuance unchanged. The 21 million supply cap and the halving schedule would also stay intact.
The upgrade would also switch on a network sustainability mechanism. Under that design, 60% of transaction fees in each block would temporarily leave circulation and move into a reserve, while miners would receive the remaining 40%. Those reserve assets are scheduled to be reintroduced gradually through future miner rewards starting around February 2031, at mainnet block 8,939,664.
For most users, those changes are not the main issue. The dispute is centered on ZIP 2003. Under that proposal, 22,309 ZEC in the Sprout shielded pool would become unspendable after the upgrade.
Why NU7 could strand legacy Sprout funds
ZIP 2003 was not written as a cleanup plan aimed only at Sprout. Its core change is broader: from NU7 onward, all v4 transaction formats would be banned. Zcash transaction formats have gone through several rounds of upgrades, and the mainstream formats now are v5 and v6.
That creates a specific problem for Sprout, Zcash’s earliest shielded pool. Sprout transfers can only be made through the v4 format, and neither v5 nor v6 supports it. Once NU7 is activated, any funds still sitting in Sprout would lose their spend path.
The coins would not be destroyed. They would still count toward issued supply, but the protocol would no longer provide a way to spend them. ZIP 2003 leaves Sprout holders with an ambiguous line: in theory, access could be reopened in the future, but it may also never be restored. As of now, none of the NU7 specifications includes a scheduled recovery feature for that purpose.
At press time, the Sprout pool still held 22,263 ZEC, valued at about $30 million. Holders who fail to move those coins before NU7 may permanently lose the ability to spend them. Even for users who want to act now, the remaining time may not be enough.
About 14 days left, but migration is difficult
If the task were simply to send funds before the deadline, the situation would be less severe. But Sprout is an old system. After later privacy designs such as Sapling and Orchard arrived, Sprout gradually fell out of support among mainstream wallets. Many users may no longer use the wallets they relied on years ago, and some may not even remember that their funds are still there.
Even for holders who do remember, the migration process is not straightforward.
Zallet, the newer wallet now being promoted officially, states in its documentation that it does not support migrating Sprout spending keys or Sprout funds. In practice, that means moving an old wallet into the new tool will not bring those balances over. Users must first move the coins out with older software that still supports Sprout, mainly zcashd, and they must keep the original wallet.dat file. If the file or the key has been lost, recovery is not possible.
Users can also try third-party recovery tools such as Argos to restore access from wallet.dat or from a standalone Sprout spending key. If the original wallet file still contains spendable note data and cached witnesses, funds may be extracted directly.
If that data is missing, though, users may need to perform a full scan, transferring roughly 280 GB of blockchain data. Processing can take several days. With only about 14 days left before NU7, the operational window is already tight.
Even a successful migration comes with a privacy trade-off. Under ZIP 308, Sprout funds cannot move directly into Sapling. They must first pass through the transparent value pool, which means the amount becomes publicly recorded. For users who originally placed funds in Sprout for privacy reasons, that is a meaningful cost.
Leave the funds where they are, and they may become permanently unspendable. Move them, and part of the privacy protection may be lost.
A governance-backed change, but not a settled debate
In scale terms, 22,000 ZEC is not especially large. The article says it accounts for about 0.45% of all shielded coins and 0.14% of circulating supply. Even if all of it ultimately becomes unspendable, the effect on circulating supply and price would likely be limited.
Views inside the community are split. Supporters argue that disabling all v4 transactions and halting Sprout transfers is acceptable because Sprout has long been close to inactive. After the Canopy upgrade in 2020, Sprout stopped accepting new inflows and only allowed existing balances to move out, leaving its use cases to shrink over time.
The article also notes that this was not a unilateral developer move. In September 2026, Zcash held a token-holder governance vote. About 2.4 million ZEC participated, and 99.9% supported reducing block time to 25 seconds. The vote also backed disabling v4 transactions in this upgrade.
Developers have been warning users to migrate for years. In that framing, NU7 is less a sudden cutoff than the final deadline in a long transition. Funds that still have not moved may already be forgotten or lost. Keeping support for an old format that almost nobody uses adds protocol complexity and expands the potential attack surface.
Critics see a different issue. In their view, this sets an uncomfortable precedent for Zcash: a user may still hold the private keys yet lose the ability to spend funds because of a protocol upgrade. They argue that this cuts against the self-custody principle often associated with privacy coins. If that guarantee does not hold, the question becomes whether privacy self-custody itself has an expiration date set by protocol developers. The article adds that Bowe has previously said Sapling retirement could be discussed in the future.
Sprout may have strong reasons for being phased out now. Whether the community would accept the same approach again in a future case remains unresolved. For users who still hold a Sprout balance, the immediate task is simpler: check wallet status as soon as possible and try to complete migration before the upgrade takes effect.