Original ｜ Odaily Planet Daily (@OdailyChina)
Author | Golem (@web3_golem)
Zcash is approaching the NU7 network upgrade, which will also result in approximately $30 million worth of ZEC being "soft-frozen."
On October 20, Zcash core developer Sean Bowe submitted a proposal to set the NU7 mainnet activation height at block 3,543,405, expected to occur around November 5. Following the upgrade, Zcash’s block interval will be reduced from 75 seconds to 25 seconds, and the mining reward per block will be reduced to one-third accordingly, keeping the daily issuance rate unchanged, with the 21 million supply cap and halving schedule unaffected. Additionally, the upgrade will activate a network sustainability mechanism: 60% of each block’s transaction fees will temporarily be removed from circulation and placed into a reserve, while miners receive the remaining 40%. The reserve assets are planned to be gradually redistributed starting around February 2031 (at mainnet block 8,939,664) through future miner rewards.
These adjustments have limited impact on the daily use of most users; the real point of contention is ZIP 2003—which proposes that after the upgrade, the 22,309 ZEC in the Sprout privacy pool will no longer be spendable.
Why would a network upgrade lock old assets?
Proposal ZIP 2003 is not a cleanup effort specifically targeting Sprout. The core of ZIP 2003 is to prohibit all v4 format transactions starting from NU7, for a straightforward reason: Zcash's transaction format has undergone multiple iterations, and the current mainstream formats are v5 and v6.
However, the issue is that Sprout is Zcash's original privacy pool, and transfers can only be made using the v4 format; later versions v5 and v6 do not support Sprout. Therefore, once the upgrade is activated, funds remaining in Sprout will no longer be spendable.
However, these coins have not been destroyed; they are still counted in the issued supply, but no spending paths are provided at the protocol level. ZIP 2003 left Sprout pool holders with an ambiguous statement: “In theory, it may be reopened in the future, but it may never be restored.” Currently, none of the specifications for NU7 have scheduled this restoration feature.
As of press time, there are still 22,263 ZEC remaining in the Sprout pool, worth approximately $30 million; holders who do not withdraw their funds before the NU7 network upgrade may permanently lose these assets. However, even if they wanted to withdraw now, there is likely insufficient time left.
Migration is challenging, with only 14 days left in the window.
If it were only a matter of asking users to transfer funds before upgrading, things wouldn’t be so complicated—but the problem is that Sprout is already a very outdated system. With subsequent upgrades like Sapling and Orchard, Sprout has long since been phased out of mainstream wallet support, and many users may no longer even use their original wallets—or remember that their funds are still there.
Even if there are still holders who remember, there are numerous practical obstacles to the migration process.
The newly promoted official wallet, Zallet, explicitly states in its documentation that it does not support migrating Sprout spending keys or funds. This means that even if users migrate their old wallet to the new tool, their existing Sprout funds will not be transferred automatically. Users must first move their coins using an older tool that still supports Sprout (primarily zcashd) and retain their original wallet.dat file. Once the file or key is lost, the funds cannot be recovered.
Users can also attempt to use third-party recovery tools (such as Argos) to recover from a wallet.dat file or individual Sprout spending keys. If the original wallet file still contains spendable note data and cached witnesses, users may try to directly extract the funds.
However, if the relevant data is missing, users may need to perform a full scan, transferring approximately 280 GB of block data, which could take several days to process. With only 14 days remaining until the NU7 network upgrade, coin holders may already have insufficient time to complete the migration.
Even if users successfully migrate out, Sprout pool holders must still contend with privacy and security concerns. According to ZIP 308, Sprout funds cannot be transferred directly to Sapling; they must first pass through the transparent value pool, meaning the amounts will be publicly recorded—a trade-off that those who originally chose Sprout for privacy must carefully consider. Not migrating risks permanently locking funds, while migrating may compromise some transaction privacy.
Not your keys, not your coins?
For ZEC, 22,000 tokens are not particularly large, accounting for approximately 0.45% of all shielded coins and 0.14% of the circulating supply; even if all of them were ultimately rendered unspendable, the impact on the circulating supply and price would be limited.
The community is also divided on the potential soft freeze of 22,000 ZEC tokens. Optimists believe that halting all v4-format transactions to pause transfers from the Sprout pool is acceptable, as the Sprout pool has long been inactive; new fund inflows were discontinued after the Canopy upgrade in 2020, and only existing balances were permitted to be withdrawn, leading to a continuous decline in usage.
It should be noted that this was not a decision made solely by developers. In September 2026, Zcash held a holder governance vote, with approximately 2.4 million ZEC participating, of which 99.9% supported reducing the block time to 25 seconds; the vote results also supported disabling v4 format transactions in this upgrade.
Developers have been reminding users to migrate for years; the NU7 network upgrade is simply the final deadline for this migration. Funds that have not yet been migrated are likely abandoned or lost assets. Maintaining an outdated format that almost no one uses adds unnecessary complexity to the protocol and increases its potential attack surface.
However, some believe this sets a poor precedent for Zcash: users holding their private keys could permanently lose the ability to spend their assets due to a protocol upgrade, which contradicts the core values of privacy coins. If this cannot be guaranteed, then is the notion of privacy-based self-custody subject to an effective expiration date determined by protocol developers? Bowe himself has also indicated that the retirement of Sapling could be discussed in the future.
Today, Sprout’s deprecation was justified. In the future, if similar issues arise, will the community accept the same approach? For users still holding Sprout balances, the most urgent step is to confirm their wallet status and complete the migration before the upgrade takes effect.