Zama: Confidential Smart Contract Platform Based on Fully Homomorphic Encryption

What is Zama

Friends, imagine you’re shopping online and entering your bank card information, but you’re worried whether someone else might see it. Right now, most websites use a technology called HTTPS, which is like putting a lock on your information that only the bank can open. The Zama project aims to bring this kind of “lock” to the blockchain world, and an even stronger one—it’s called Fully Homomorphic Encryption (FHE).

Simply put, Zama is a blockchain infrastructure project whose core goal is to keep data on the blockchain encrypted even while it’s being processed, just like your bank card information stays encrypted throughout your online shopping. This means that even when executing smart contracts (which you can think of as self-executing contracts on the blockchain), the data doesn’t need to be decrypted and can be computed on directly in its encrypted state.

Zama’s target users are all individuals and enterprises who wish to protect data privacy on the blockchain, especially in fields with high privacy requirements such as finance (e.g., confidential DeFi), healthcare, and identity verification. A typical usage flow might involve users sending encrypted data to the blockchain, then smart contracts processing it without decryption, and finally returning encrypted results that only authorized parties can decrypt and view.

Project Vision and Value Proposition

Zama’s vision is to bring the “HTTPS moment” to blockchain, that is, to achieve end-to-end data privacy protection. The core problem they aim to solve is the widespread privacy leakage issue on current public blockchains. On traditional blockchains, all transactions and data are open and transparent, which is unacceptable for some confidentiality-required scenarios.

Zama uses fully homomorphic encryption technology to keep data encrypted on-chain while still allowing computation, just like being able to modify files inside a locked box without opening it. In this way, you can enjoy the decentralization and verifiability of blockchain while protecting data privacy. Compared to other privacy solutions (such as Zero-Knowledge Proofs (ZK), Multi-Party Computation (MPC)), Zama’s FHE technology allows for more complex general-purpose computation on encrypted data and maintains data composability (i.e., different encrypted data can be computed together).

Technical Features

Core Technology: Fully Homomorphic Encryption (FHE)

Fully Homomorphic Encryption (FHE) is the cornerstone of the Zama project and is considered the “holy grail” of cryptography. Fully Homomorphic Encryption (FHE): a highly advanced encryption technology that allows arbitrary computation directly on encrypted data without first decrypting it. This means data remains encrypted throughout the entire processing, greatly enhancing privacy.

Zama leverages FHE technology so that smart contracts on the blockchain can process encrypted data directly. Even validators and the network cannot see users’ raw data, but the computation results are still verifiable.

Technical Architecture

• fhEVM: Zama has developed a virtual machine called fhEVM, which is compatible with the Ethereum Virtual Machine (EVM), but unlike the traditional EVM, fhEVM can execute smart contracts in an encrypted state. This means existing Ethereum developers can more easily migrate their applications to Zama’s privacy-preserving environment.
• Coprocessors: To address the heavy computational load and slow speed of FHE, Zama introduced coprocessors. Coprocessors: specialized hardware or software units designed to handle specific types of computation, offloading the main processor and improving efficiency. These coprocessors handle the intensive FHE computations, reducing the main chain’s computational burden and gas fees, and improving scalability.
• TFHE-rs and Concrete: Zama has also developed TFHE-rs (an FHE arithmetic library based on Rust) and Concrete (a compiler that converts Python programs into FHE-equivalent programs), making it easier for developers to build privacy-preserving applications.

Performance and Compatibility

Zama aims to achieve scalability, security, and cost-effectiveness. It currently reaches 20 transactions per second (tps), with a future goal of 1000 tps. Zama’s solution is a cross-chain protocol that can enable confidential smart contracts on any blockchain, such as Ethereum and Solana.

Tokenomics

The native token of the Zama project is ZAMA.

• Token Symbol: ZAMA
• Total Supply: 1.1 billion.
• Token Utility:
  • Paying Network Fees: Used to pay for encryption/decryption operations.
  • Staking: Participants can stake ZAMA tokens to help secure the protocol.
  • Governance: Holders can participate in ecosystem governance decisions.
  • Incentives: May be used in the future to reward validator nodes, pay FHE computation fees, and incentivize the developer ecosystem.

For information on token allocation and unlocking, it is recommended to consult Zama’s official announcements and whitepaper for the latest and most detailed data.

Team, Governance, and Funding

Team

Zama’s team consists of experienced cryptography experts and AI talents. The founders include Dr. Rand Hindi (PhD in AI, one of the founders of an early AI company) and Dr. Pascal Paillier (PhD in cryptography, co-inventor of FHE and the Paillier scheme). The team has over 100 members, including 37 PhDs.

Funding

Between 2024 and 2025, Zama raised a total of $130 million in two funding rounds, backed by top institutions such as Multicoin Capital and Pantera Capital, with a post-Series B valuation exceeding $1 billion.

Governance

ZAMA token holders will be able to participate in ecosystem governance decisions. For details on the specific governance mechanism, please refer to official materials.

Roadmap

Zama’s roadmap mainly revolves around the development and application of FHE technology:

• 2024:
  • May: Zama Meetup held in Zurich, discussing FHEVM, FHE+ZK+MPC confidential smart contracts, and privacy-preserving machine learning.
  • July: At EthCC 7, discussions on threshold key generation and decryption for FHEVM chains, FHE privacy in decentralized AI, and FHE on Ethereum.
  • November: JPMorgan’s Kinexys released a proof of concept in the financial sector using Zama’s privacy-preserving solution.
  • December: Launch of the FHEVM coprocessor for running FHE smart contracts on Ethereum, Base, and other EVM chains.
• 2025:
  • February: TFHE-rs v1.0 stable CPU backend release.
  • April: Launch of Zama’s Threshold Key Management System (TKMS).
  • May: Release of HPU on FPGA, the first open-source FHE hardware accelerator.
  • June: Introduction of the Zama confidential blockchain protocol at EthCC 8, a cross-chain protocol for FHE confidential smart contracts.
  • End of year: Mainnet launch, focusing on applications in privacy-sensitive scenarios such as confidential stablecoins and RWA (real-world asset) tokenization.
• Future Plans:
  • Collaborate with multiple hardware companies to develop FHE-specific ASIC chips to achieve processing capacity of thousands of transactions per second (tps).

Common Risk Reminders

Investing in any blockchain project carries risks, and Zama is no exception. Here are some common risk reminders:

• Technical and Security Risks: While fully homomorphic encryption is powerful, it is still a relatively new and complex field. Implementation is challenging and performance optimization is ongoing. Any technical vulnerabilities could lead to security issues.
• Economic Risks: Token prices are affected by market supply and demand, project progress, macroeconomics, and other factors, and may fluctuate sharply.
• Compliance and Operational Risks: Global regulatory policies on cryptocurrencies and privacy technologies remain unclear, and future policy changes may impact project operations.
• Competitive Risks: The blockchain privacy track is highly competitive, and Zama needs to continuously innovate to maintain its leading position.

Please note, the above information does not constitute investment advice. Be sure to conduct thorough personal research before making any investment decisions.

Verification Checklist

• Block Explorer Contract Address: Circulation information for the ZAMA token can currently be found on platforms such as CoinMarketCap, but the specific contract address should be monitored via official project releases.
• GitHub Activity: Zama maintains multiple open-source repositories on GitHub, such as fhevm (the core framework of the Zama confidential blockchain protocol), TFHE-rs (FHE arithmetic library), and Concrete (FHE compiler). You can follow code updates and community contributions.
• Official Website/Whitepaper: Refer to Zama’s official website and the latest technical whitepaper for the most authoritative project information.

Project Summary

Zama is an innovative project dedicated to solving blockchain privacy issues through Fully Homomorphic Encryption (FHE) technology. It aims to keep data encrypted on the blockchain at all times while still enabling computation, opening up new possibilities for privacy-sensitive applications such as DeFi and identity verification. The team is composed of top cryptography experts and is backed by well-known investment institutions. Zama’s technical architecture, such as fhEVM and coprocessors, is designed to improve the practicality and performance of FHE. Although FHE technology is still in development, Zama’s efforts are expected to bring revolutionary breakthroughs to blockchain privacy protection. Investors and users should fully understand its technical principles, potential risks, and market prospects before participating.

For more details, please conduct your own research.