TLDR
Zama (ZAMA) is a cryptographic protocol that brings fully homomorphic encryption (FHE) to public blockchains, enabling confidential smart contracts and transactions while maintaining auditability.
Core Technology: Uses FHE to perform computations on encrypted data, keeping it private even during processing.
Protocol Function: Acts as a confidentiality layer that can be integrated with existing Layer 1 and Layer 2 blockchains like Ethereum and Solana.
Token Role: The native ZAMA token is used to pay for protocol services (like encryption) and can be staked to help secure the network.
Deep Dive
1. Purpose & Value Proposition
Zama aims to solve the fundamental privacy dilemma in blockchain: public transparency versus the need for confidentiality in sensitive applications. Its protocol enables confidential smart contracts, allowing developers to build private decentralized finance (DeFi), encrypted payments, and sealed-bid auctions where transaction details remain hidden yet verifiable. This positions Zama as a foundational privacy infrastructure, often called the "HTTPS layer for Web3" (Phemex). The ZAMA token powers this ecosystem, used for protocol fees—which are burned—and for staking to earn operator rewards.
2. Technology & Architecture
Zama’s innovation is its use of fully homomorphic encryption (FHE), a form of cryptography that allows data to be processed while still encrypted. The protocol operates as a coprocessor model alongside major chains, handling the intensive FHE computations off-chain to keep costs low. It launched on the Ethereum mainnet in late December 2025 (CoinMarketCap). This design lets developers use familiar tools (like Solidity) while adding privacy features. The network currently supports about 20 transactions per second per chain, with a roadmap targeting significantly higher throughput through specialized FHE hardware.
Conclusion
Zama is fundamentally a privacy-enabling infrastructure that uses advanced cryptography to bring confidential computation to transparent blockchains. Its success hinges on developer adoption of its FHE tools to create new, privacy-sensitive applications. What novel use cases will emerge now that smart contracts can keep secrets?
