Zama unveils privacy layer & $ZAMA token auction for blockchain

Zama has introduced a confidentiality layer for public blockchains that aims to enable private and compliant onchain payments for use cases such as payroll, cross-border transfers, and embedded finance. The Zama Protocol mainnet allows for financial transactions on public blockchains to remain fully encrypted during computation while retaining auditability and compliance with anti-money-laundering (AML) regulations.

Confidential transactions

The protocol uses fully homomorphic encryption (FHE), allowing data to be processed and verified onchain without ever being decrypted. This means that companies can use blockchain infrastructure for payments while keeping sensitive information, such as salaries or customer data, confidential. At the same time, transactions remain auditable through programmable access controls designed to meet compliance requirements.

"This token auction represents much more than a sale - it is the starting point for a confidential, compliant onchain financial system," said Dr Rand Hindi, CEO and co-founder, Zama.

The Zama Protocol supports encrypted payroll transactions, private stablecoin transfers with audit trails, confidential cross-border payments, and tokenised assets with institutional privacy. The company refers to this step as the "HTTPS moment for blockchain payments."

New token auction

Following the mainnet launch, Zama will hold a sealed-bid Dutch auction for its native $ZAMA token, using its own technology. The auction will sell 10% of the token supply. Bids will be submitted onchain, with bid sizes encrypted, enabling public price transparency while concealing individual bid amounts. This mechanism is intended to prevent market manipulation and ensure fair price discovery.

The $ZAMA token will be used within the protocol economy: applications will pay fees in $ZAMA to encrypt and decrypt data, while node operators will stake the token to secure the network and earn rewards. Unlike other blockchain projects that launch tokens before their infrastructure is live, Zama's auction will take place on an operational mainnet.

"Zama makes it possible for institutions to issue, transfer, and trade assets privately on public blockchains, opening the door for the $100 trillion financial industry to migrate onchain. Zama is to blockchain what HTTPS was to the internet. We call it HTTPZ," said Hindi.

Compliant privacy

Banking and finance sectors have typically faced a dilemma between maintaining transparency and safeguarding sensitive data. Zama's approach is to allow onchain data to remain encrypted-even as it is processed or analysed. At the same time, transactions can be verified and audited in line with regulatory expectations.

By enabling programmable access controls, the Zama Protocol is designed to address both privacy requirements and compliance obligations, supporting applications that span both decentralised finance (DeFi) and traditional financial markets (TradFi).

Confidential use cases

With the Zama Protocol, developers can build confidential DeFi applications, issue encrypted stablecoins, support private tokenisation, and implement secure governance structures where only required information is revealed.

Zama's ecosystem already includes partners such as Deberrys (an onchain auction house), Zaiffer (privacy-focused DeFi), Orion Finance (privacy-preserving portfolio management), tGBP (a confidential stablecoin pegged to GBP), TokenOps (for secure automated token management), Raycash (decentralised banking), Shiba Inu (decentralised ecosystem), DFNS (wallet infrastructure), and OpenZeppelin (collaborating on confidential token standards).

Development and backing

Zama has a team of over 100 cryptographers, engineers, and blockchain developers, and has raised more than USD $150 million from investors, including Pantera Capital, Multicoin Capital, Protocol Labs, Metaplanet, and Blockchange Ventures, reaching a valuation of over USD $1.2 billion.

"Zama is will be selling tokens to users, developers, and operators of an already existing, live mainnet, using its own technology to ensure a fair distribution and pricing of the $ZAMA token," said Hindi.