Zcash Upgrade Could Cut Off 22,309 ZEC in Sprout

Zcash’s proposed NU7 upgrade could end the available spending route for about 22,309 ZEC in Sprout, the network’s oldest privacy pool. The funds could become inaccessible on the upgraded network even if holders retain their private keys.

The Sprout pool held 22,309.44195128 ZEC at block 3,521,260, according to a dashboard update recorded at 19:10:09 UTC on Oct. 17. NU7’s mainnet activation height had not been assigned. A decision was planned for Oct. 20 after additional testnet review, with Nov. 5 set as the proposed activation date if approved.

ZIP 2003, a Zcash improvement proposal authored by Daira-Emma Hopwood, would require the network to reject all version 4 transactions after NU7 activates. Sprout transfers require version 4 transactions, while versions 5 and 6 do not support the pool.

A private key authorizes a holder to spend a note, but the network must also accept the transaction format containing that authorization. If version 4 transactions are rejected, Sprout holders would have no supported format for transferring their funds. Re-signing an old version 4 transaction would not solve the problem because the format itself would remain invalid.

The rule would apply to every version 4 transaction, including transactions involving transparent funds and the Sapling pool. Some non-Sprout transactions could be recreated in newer formats. Sprout funds have no equivalent replacement format.

ZIP 2003 would leave the remaining Sprout balance in Zcash’s issued supply. The proposal allows for the possibility of restoring version 4 transactions or creating another recovery method, while warning that spending access may never return.

Updating wallet software would not automatically transfer the funds. Zallet’s migration documentation excludes Sprout spending keys and funds from its import process and advises users to preserve their original wallet.dat file. The Argos recovery tool provides a possible route for users with a legacy wallet file or standalone Sprout spending keys.

Users with usable note data and a cached witness may avoid scanning the historical blockchain. Holders with only a key may need to reconstruct additional information before creating a valid transaction. Argos estimates that a full scan could require about 280 gigabytes of transferred data and take several days, while using less than 500 megabytes of disk space.

Argos sends recovered Sprout funds to Sapling, a newer shielded pool, including when users provide a Unified Address. Moving the funds again requires a separate transaction. Sprout-to-Sapling transfers expose the amount through public pool accounting without requiring a transparent address.

ZIP 308 describes coordinated timing and randomized amounts to reduce the chance of linking individual migrations to specific users. ZIP 2003 warns that a short or poorly coordinated exit period could make distinctive amounts and transaction times easier to associate with holders.

The proposed retirement would reduce the work required to validate Zcash transactions. Sprout’s specialized verification procedures and spent-note checks add processing requirements to transaction and block handling, although the pool has limited use. ZIP 211 previously stopped new value from entering Sprout while preserving a way to extract existing funds.

Testnet implementation of NU7 was already running when the mainnet decision was pending. The Zcash Foundation released Zebra 7.0.0-rc.0 on Oct. 2 and scheduled the upgrade for testnet block 4,465,026 around Oct. 6. Engineers confirmed on Oct. 10 that testnet had passed activation. Mainnet operators would need compatible software to follow the new rules, while Sprout holders would need to complete any supported migration before the final activation height.