Zama

Rand Hindi and Pascal Paillier founded Zama in 2020 around fully homomorphic encryption. The promise sounds small but changes the trust model: calculate on encrypted data without first turning it back into readable text. Zama spent its early years turning that mathematics into TFHE-rs, Concrete and FHEVM tools, then raised a $73 million Series A in March 2024 to push the technology toward practical infrastructure.

On June 25, 2025, the company announced a $57 million Series B and a protocol meant to sit beside public chains rather than replace them. Ethereum would keep ordering transactions. Host contracts would record ciphertext handles and access rules; coprocessors would perform encrypted arithmetic; a Gateway and distributed key service would coordinate authorized decryption. The architectural choice preserved Ethereum composability but introduced a new operator network behind each hidden value.

Between November 25 and 28, 2025, 13 organizations jointly generated the mainnet encryption key and secret shares. Zama reported that no participant learned the complete private key. The protocol went live on Ethereum on December 31, moving FHEVM from a developer testnet into a production environment.

That ceremony reveals what “private on a public chain” means here. Ethereum can expose an encrypted handle and the contract’s access decisions without exposing plaintext. Coprocessors calculate over ciphertext, while a threshold of KMS parties answers an authorized decryption request. Privacy therefore depends on cryptography, correct application permissions and the honesty/availability assumptions of the operator set—not on hiding that a transaction happened.

From January 21 to 24, Zama sold ZAMA through a sealed-bid Dutch auction implemented on its mainnet protocol. Bids stayed encrypted during the sale. Zama later reported $118 million committed and called the auction its first production application with real value; that number describes submitted commitments, not cash earned as protocol fees.

Claims opened at noon UTC on February 2 and exchange trading one hour later. Genesis created 11 billion tokens, with 20% circulating at TGE. The sale made the technical claim tangible before the token became freely traded: FHE protected price discovery, and the token distributed by that auction would then pay the operators who make future confidential applications work.

ZAMA fees are quoted in dollars and converted through an oracle, insulating application costs from the token’s unit price. The protocol charges for checking encrypted-input proofs, decrypting ciphertext and bridging encrypted values; applications or relayers may sponsor the payment. Every collected token is burned.

Security spending runs the other way. Operator rewards are newly minted at an initial 5% annual rate, split between KMS and coprocessor roles and weighted by the square root of stake. By block 25,909,938, Ethereum total supply had risen to about 11.286 billion. That observed increase is the economic test in miniature: fee use contracts supply while security rewards expand it, and governance may change the reward rate.

A ZAMA holder can delegate to an operator pool, but only elected operators and their delegators earn rewards. The holder receives a pool share and accepts its commission and unstaking rules. Protocol voting is different: elected operators have equal votes regardless of stake. The Aragon DAO governs Ethereum and already links to the Gateway through LayerZero. BSC, HyperEVM and Solana currently use dedicated local multisigs; broader DAO linkage is planned. These are fee-payment and delegation functions; the litepaper does not establish a claim on Zama company profits, and the initial issuance rate is not a promised delegator yield.

The Ethereum token cannot be upgraded, yet immutability does not remove administration. Its DAO address holds the default admin role, two staking contracts can mint, and a pauser wrapper can stop minting; all were active in the September review and minting was unpaused. Operators can also approve upgrades to protocol proxies, change fees and rewards, or block addresses under documented thresholds. ZAMA therefore secures a service whose future is decided by a small operating federation, even as anyone can buy or delegate the token.

By May 2026, Zama described the full Ethereum stack, confidential wrappers, portfolio, staking and bridges as live and integrable, while labeling its new SDK beta. ZAMA could travel to BSC, Solana, HyperEVM/HyperCore and the Gateway, but token travel is not the same as FHE execution on every destination. Current documentation still requires a chain-by-chain deployment check.

The original research wager has reached production; its commercial feedback loop is only beginning. If confidential applications create repeated verification and decryption demand, burns connect ZAMA to real use. If activity stays concentrated in launches and incentives, minted security rewards dominate. The next chapter is therefore written less by another cryptographic benchmark than by the ordinary applications willing to pay to keep one field secret.