What actually happened?
Zcash launched a new security fund and moved to an upgrade labeled NU7. A mainnet snapshot taken on November 7 revealed an unexpected ratio: according to CryptoSlate, the so-called historical seed makes up 99.7% of the fund's entire reserve. Under the new fee rules introduced by NU7, only a small amount of 1.12 ZEC has been collected into the fund so far.
In other words, the fund that is meant to finance the network's security going forward today rests almost entirely on money accumulated in the past. New income from fees is negligible for now.
Why does the 99.7% to 0.3% ratio matter?
A security fund only makes sense if it keeps filling up over time. If 99.7% of its contents comes from the historical seed and the new fee mechanisms have contributed only 1.12 ZEC so far, that means the funding model still has to get going in practice.
What follows from this:
- Fact (according to CryptoSlate): as of November 7, the fund rests practically entirely on old money.
- What is open: how quickly the share of new fees will grow over time. This can only be verified through further mainnet snapshots in the coming weeks and months.
This is the kind of situation worth tracking over time, not judging from a single snapshot. One day after the upgrade, the new mechanism will logically not collect much.
What does the NU7 upgrade have to do with the "frozen millions"?
The second part of the story, described by Decrypt, concerns an older part of the Zcash privacy system. According to Decrypt, the latest upgrade brings faster transactions, but at the same time the moment is approaching when the deprecated private pool will stop accepting withdrawals.
The consequence, according to Decrypt, is concrete: thousands of coins that owners leave in the old part of the system could become inaccessible. Decrypt estimates the value of such potentially locked funds at roughly 16 million dollars.
Czech and Slovak news outlets (Kryptonovinky.cz and Kryptonovinky.sk) reported the same event with phrasing that Zcash is "blocking" or will "freeze millions."
How does it all fit together?
The two points are connected through a single upgrade (NU7), but they aim at different things:
| Topic | Source | Core |
|---|---|---|
| Composition of the security fund | CryptoSlate | 99.7% old money, 1.12 ZEC from new fees (snapshot on Nov 7) |
| Risk of coins being locked | Decrypt | the old private system stops accepting withdrawals, potentially ~16 million USD |
The common thread: this is a transition period. The new rules have not yet filled the fund, and the old infrastructure is closing down. In a window like this, what usually matters most is what users manage to do in time and how quickly the new mechanisms get up and running.
What to watch out for during transitions like this
This is not advice on what to do with your money. It is a list of things that can be verified:
- Withdrawal deadlines. If the old pool stops accepting withdrawals, a specific block or date decides it. It is worth looking that up in the project's official documentation.
- Further fund snapshots. The ratio of old to new money will only change with further snapshots. One data point (Nov 7) does not make a trend.
- How much of the funds will actually stay locked. The 16 million dollar estimate is, according to Decrypt, a potential ceiling, not a confirmed loss. The real number will depend on how many people manage to move their funds.
What we still don't know
The available sources do not confirm the exact timeline for closing the old system, the final amount of funds that will actually be locked, or the pace at which the security fund will fill from new fees. We mark these points as open and will return to them once hard data is available.