Zcash’s NU7 network upgrade proposes smaller block subsidies paid across more frequent blocks, keeping scheduled issuance per unit of time effectively unchanged. The more direct change to miner revenue is the proposed transaction-fee split: miners would receive approximately 40% of each block’s fees immediately, while 60% would be removed from circulation and credited to the Network Sustainability Mechanism (NSM) for later reissuance.
As of October 12, 2026, the draft deployment specification sets NU7’s public Testnet activation height at 4,465,026, while the Mainnet activation height remains unset. It indicates that the Mainnet height is to be set on October 20; Zebra release notes identify November 5, 2026 as a tentative activation target. These are planning milestones, not confirmation of Mainnet activation. This article describes the currently specified design, which remains subject to final deployment decisions (ZIP 259, Zebra release notes).
What Is Zcash NU7?
NU7 proposes several consensus changes. The main changes for miners are a reduction in target block spacing from 75 seconds to 25 seconds, a corresponding reduction in the scheduled subsidy per block, and a rule that removes part of each block’s transaction fees from immediate circulation.
The upgrade also introduces the NSM value balance, a consensus-tracked balance of funds removed from circulation that can later support additional block subsidy. It is not a spendable account or a discretionary reserve. The relevant mechanics are specified in ZIP 218, ZIP 235, and ZIP 237, with deployment parameters in ZIP 259 (ZIP 259).
Will NU7 Reduce Zcash Mining Rewards?
A subsidy divided by three does not, by itself, mean miners receive two-thirds less scheduled ZEC over time. Under the proposed design, blocks would also arrive three times as often on average.
During the current second halving period, the scheduled block subsidy is 1.5625 ZEC. Miners receive 1.25 ZEC, with 8% of the scheduled subsidy allocated to the Zcash Community Grants funding stream and 12% to the deferred funding stream. The current streams are defined in ZIP 214 Revision 2; Revision 3 preserves their percentages and adjusts their end heights for NU7’s faster blocks (ZIP 214).
If NU7 activates as currently specified during this halving period, the scheduled subsidy becomes 0.52083333 ZEC per block. The two funding-stream allocations are calculated separately and rounded down, leaving miners with 0.41666668 ZEC per block.
| Metric | Before NU7 | After NU7, as proposed |
|---|---|---|
| Target block spacing | 75 seconds | 25 seconds |
| Scheduled block subsidy | 1.5625 ZEC | 0.52083333 ZEC |
| Miner portion of scheduled subsidy | 1.25 ZEC | 0.41666668 ZEC |
| Expected blocks per 75 seconds at target spacing | 1 | 3 |
| Miner scheduled subsidy across those blocks | 1.25 ZEC | 1.25000004 ZEC |
The four-zatoshi difference in the last row comes from rounding the subsidy and funding-stream allocations. It is not a meaningful increase in mining income. ZIP 218 also increases the halving interval from 1,680,000 to 5,040,000 blocks to preserve the approximate four-year cadence (ZIP 218).
The important distinction is between network issuance and an individual miner’s earnings. Scheduled issuance per unit of time is designed to remain effectively unchanged. A miner’s actual earnings still depend on their share of network hashrate, effective mining work, and pool rules. Block spacing is a target rather than a guarantee, and the network’s difficulty adjustment must respond to the new target after activation.
More frequent network blocks also do not automatically mean more frequent payments to a pool participant. Settlement and withdrawal timing remain separate pool-level arrangements.
How Will NU7 Change the Miner Share of Transaction Fees?
ZIP 235 proposes removing 60% of each block’s total transaction fees from circulation, rounded down to the nearest zatoshi. With ZIP 237 deployed, that amount is credited to the NSM value balance. The remaining amount goes to the miner through the coinbase transaction.
| Total transaction fees in a block | Removed from circulation and credited to NSM | Miner fee revenue |
|---|---|---|
| 100,000 zatoshis | 60,000 zatoshis | 40,000 zatoshis |
The calculation applies to aggregate block fees, not to each transaction separately. Rounding favors the miner, so the retained share is approximately 40% (ZIP 235).
This is a change to how fee revenue is distributed. It does not mean that a user’s transaction fee automatically falls by 60%.
Unlike the scheduled subsidy adjustment, this rule reduces immediate miner revenue when comparing the same amount of transaction fees over the same period. If fees represent only a small share of total mining revenue, the overall effect may be limited. Its size depends on actual fee activity after activation; faster blocks alone do not establish how much fee revenue will be generated.
The removed funds are not permanently destroyed. Under the proposed NSM design, they contribute to a balance that can fund future additional block subsidy. That future issuance should not be treated as an immediate offset to the fee reduction.
When Could NSM Reissuance Affect Block Rewards?
ZIP 237 defines total block subsidy as scheduled block subsidy plus an additional subsidy drawn from the NSM value balance. The additional subsidy would not begin at NU7 activation. Its start height is calculated from the issuance schedule and NU7 activation height, at a point after the third halving.
Three distinctions matter when assessing future mining revenue:
- The proposed fee-removal rule begins at NU7 activation, while NSM reissuance begins later.
- The NSM balance includes an initial amount from historically unclaimed block subsidies and fees, as well as subsequent fee contributions. It does not start from zero.
- Once reissuance begins, the additional subsidy depends on the preceding block’s NSM balance. It is not a fixed ZEC-per-block payment.
Under the currently specified design, reissuance is algorithmic. However, it does not reimburse the same miners whose immediate fee income was reduced; future rewards go to the miners earning blocks at that time. The Mainnet reissuance height remains dependent on the final activation parameters, so a calendar date should be treated as an estimate rather than a guaranteed start date (ZIP 237).
The mechanism does not increase Zcash’s 21 million ZEC supply cap. Funds reissued from the NSM balance were previously removed from circulation (ZIP 259).
What Should ZEC Mining Pools and Miners Expect?
The official NU7 upgrade page says ASIC miners are not expected to need a specific upgrade, because they do not independently verify consensus rules and the block header is not expected to change. Pool and solo-mining node operators are responsible for running compatible infrastructure (Zcash NU7 upgrade page).
Pool software also needs to handle block templates correctly. Zebra 7.0.0-rc.0, released for NU7 Testnet support, removes transactions and the previous-block reference from the fields advertised as mutable by getblocktemplate, retaining only time. Its release notes instruct miners to request a fresh template instead of independently changing the selected transactions or parent block, because the required coinbase depends on those inputs (Zebra 7.0.0-rc.0 release notes).
For an ASIC operator connected to a pool, the practical step is to follow the pool’s NU7 instructions and check its upgrade announcements as Mainnet activation approaches. Hardware continuity and correct pool infrastructure are separate considerations.
How Could This Appear in Pool Payouts?
NU7 sets the protocol rules for block subsidy and the miner’s share of transaction fees. A pool’s payout method determines how earnings are accounted for and distributed among participants.
ViaBTC introduced PPS+ for ZEC mining on January 9, 2026. Its announcement states that the fee component is distributed in proportion to miners’ actual hashrate contribution for the day. It also explains that PPS+ places more variance risk on the pool than PPLNS or SOLO (ViaBTC ZEC PPS+ announcement).
If NU7 activates as specified, the transaction-fee revenue available to a block-producing pool would reflect the approximately 40% miner share after the NSM deduction. If ViaBTC retains its existing fee-distribution rules, that smaller fee base would flow through to the amount available for allocation.
This is an implication of the proposed protocol rules, not confirmation of ViaBTC’s final NU7 settlement implementation. Any changes to calculation details or settlement arrangements should be checked against ViaBTC’s updated announcements.
For PPLNS participants and solo miners, the same protocol distinction applies: the scheduled subsidy per block becomes smaller as target block frequency increases, while the immediate miner share of transaction fees falls. The effect on a participant’s credited earnings depends on the applicable payout method and pool rules.
Conclusion
NU7’s proposed subsidy change is designed to preserve scheduled ZEC issuance per unit of time through smaller, more frequent block rewards. The fee change has a different effect: miners would retain approximately 40% of transaction fees immediately, with the remaining 60% credited to the NSM balance for later reissuance.
That does not establish a fixed change in every miner’s total earnings. Fee activity, hashrate share, effective mining work, and pool settlement rules still matter. As of October 12, 2026, Mainnet activation parameters remain unfinished, so miners should treat these figures as the current design and follow final network and pool announcements.
FAQ
Has NU7 activated on Zcash Mainnet?
Not according to the deployment specification checked on October 12, 2026. The Mainnet activation height remains unset. The specification assigns public Testnet height 4,465,026; the tentative Mainnet target in Zebra release notes is November 5, 2026.
Does NU7 reduce scheduled ZEC issuance to miners over time?
The proposed subsidy per block falls to about one-third of its current value, while target block frequency triples. Scheduled issuance per unit of time is therefore designed to remain effectively unchanged, apart from rounding. This does not guarantee unchanged earnings for an individual miner.
Do miners keep all transaction fees under NU7?
Under the proposed rule, no. Approximately 60% of aggregate block fees is removed from circulation and credited to the NSM balance, leaving approximately 40% for the miner.
Does the 60/40 split make transactions cheaper for users?
The split determines where paid transaction fees go. It does not itself reduce the fee a user pays by 60%.
Will the removed fees return to miners later?
The current design provides for automatic reissuance through additional block subsidies after a separately calculated start height. The amount varies with the NSM balance, and the rewards go to future block producers rather than being refunded to the original miners.
Do ASIC miners need new hardware for NU7?
The official upgrade guidance does not anticipate a specific ASIC upgrade. Pool-connected miners should follow their pool’s instructions, while pool and solo-mining node operators need compatible infrastructure.
Will ViaBTC’s ZEC PPS+ calculation remain unchanged?
The existing ViaBTC announcement explains its current PPS+ fee distribution, but does not confirm NU7-specific settlement arrangements. If those rules remain unchanged, the fee amount available for allocation would reflect the protocol’s reduced miner share. Check ViaBTC’s updated announcements for implementation details.
References
- Zcash: NU7 Network Upgrade
- ZIP 218: 25-second Block Target Spacing
- ZIP 235: Remove 60% of Transaction Fees From Circulation
- ZIP 237: Network Sustainability Mechanism: Halving-Preserving Issuance
- ZIP 214: Consensus rules for a Zcash Development Fund
- ZIP 259: Deployment of the NU7 Network Upgrade
- Zebra release notes
- Zebra 7.0.0-rc.0 release notes
- ViaBTC Now Supports PPS+ Payment Method for ZEC Mining