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Long-awaited NU7 upgrade was finally activated on Zcash's mainnet at block 3,543,405 earlier this morning. The private cryptocurrency project became the first-ever to deploy long-term security mechanisms directly into the protocol, solving what some refer to as "Bitcoin's main dilemma": how to maintain the network after the emission zeroes out.
The foundation of the new Zcash economy thus becomes Network Sustainability Mechanism (NSM). Developed by Shielded Labs it works on the principle of recirculation. From now on 60% of all transactional fees go to this reserve, leaving ZEC miners with 40%. It guarantees a mere 210 ZEC a year, but makes code ready for gas burn in the style of EIP-1559 and fees from privacy coins. Funds are locked until 2031, after which they will be used for additional mining rewards.
Matter of fact, the controversial Zcash Community Grant worth 50,000 ZEC is also a part of sustainability initiative.
Three times faster and with perpetual engine: How the new Zcash is engineered
Technically the network accelerated by 300% as the time for block production was cut from 75 to 25 seconds. To remain within the strict limit of 21 million ZEC, the rewards for mining were gradually cut too. Besides, NU7 upgrade blocks old type transactions making coins in legacy pools like Sprout unredeemable for the stability of code.
At first Shielded Labs even proposed to completely abandon halvings and replace them with the flat issuance curve. Large holders as expected reacted negatively. What happened next is that developers adapted the code via ZIP 237 and followed the will of the community. As later Shielded Labs revealed: "Having Zooko doesn't give us special authority to change the issuance curve. We have to build consensus through public debate."
Zooko, who is Zooko Wilcox himself, a main man behind Zcash, greeted the upgrade in a laconic, yet eloquent manner, saying "Happy NU7 Everyone!". The market in the meantime reacted rather optimistically, considering that the upgrade was shipped amid the 'bloodbath' that took Bitcoin down 9% alongside. ZEC lost up to 5% of its price during the sell-off.
According to Chris Burniske, renowned investor in Solana (SOL), ZEC/BTC chart is "still the only chart that matters as it shows what comes next". For Taiki Maeda the aim for ZEC is "2% of Bitcoin's market cap", which roughly equals a price tag of around $2,000 by the end of the year.