Zama, a pioneering open-source cryptography startup in fully homomorphic encryption (FHE) technology for blockchain, has raised $57 million in a Series B round, bringing the company's valuation to over $1 billion. This funding was led by Pantera Capital and Blockchange Ventures, making Zama the first advanced encryption company to achieve 'unicorn' status.
Bringing privacy and encrypted smart contracts to the blockchain
Founded in 2020, aims to provide complete privacy for public blockchains without compromising transparency or auditability. Along with the latest funding, Zama has also launched its public testnet and 'secret' blockchain protocol, allowing developers to build encrypted smart contracts and decentralized applications.
Zama's CEO, Rand Hindi, stated that the company is focusing on financial applications, particularly payments. He explained that fully homomorphic encryption (FHE) allows for the encryption of data and processing it without the need for decryption, enabling transactions on a public blockchain without revealing transaction details. This means that users can recompute states using encrypted data, providing public verifiability without needing to view the actual data, making FHE a unique security technology that is both safe and publicly verifiable.
Implementation plans and advantages over other security tools
Hindi stated that Zama will first launch on the Ethereum network in July, then expand to other Ethereum Virtual Machine (EVM) compatible blockchains. The goal for integration with Solana is set for 2026.
Zama's distinction from controversial security tools like coin mixers is that Zama focuses on encrypting transaction content while still keeping the transaction traceable. This allows for data on-chain (such as balances, amounts) to be obscured while still maintaining a transaction trail, enabling tracing back to a wallet with verified identity (KYC) when necessary. Zama also introduces the feature of 'programmable security', allowing developers to control who can decrypt data on-chain within smart contracts.
Hindi believes that this interoperability is the final necessary factor for blockchain technology to be widely accepted. After years of working in the field of cryptography, Hindi expressed excitement that Zama achieved unicorn status, indicating that investors and developers are increasingly interested in security.