Coin columns · Ethereum City (Capital)
Zama (ZAMA): The Coin of a Protocol That Computes on Encrypted Data
Fully homomorphic encryption for private smart contracts
ZAMA is the coin of the Zama Protocol, which uses fully homomorphic encryption (FHE, computing on data while it stays encrypted) to bring confidential transactions and smart contracts to blockchains. It reached the market through a public auction in January 2026.
1. A cryptography company from Paris
Zama is a cryptography start-up founded in Paris in 2020 by Rand Hindi and Pascal Paillier, the inventor of the Paillier cryptosystem (1999), an early partly homomorphic scheme. It has long open-sourced FHE libraries such as TFHE-rs and raised large funding rounds in March 2024 and June 2025.
ZAMA is a standard ERC-20 token on Ethereum. It pays encryption and decryption fees on the protocol and can be staked with operators to earn rewards and help secure it. On the Crypto Nation map, ZAMA stands in Ethereum City (the capital), because it was first issued on Ethereum.
2. Computing without decrypting
FHE lets a computer add and multiply data without ever decrypting it; the result stays encrypted and only the key holder can read it. Craig Gentry first showed this was possible in 2009, and speeds have improved steadily since. Zama attaches this to Ethereum smart contracts (self-executing programs), so balances or bids remain encrypted while contracts process them.
Heavy FHE computation runs on a separate network of coprocessors (auxiliary servers), while the decryption key is split among operators in an MPC network (parties that compute together without revealing secrets), so no single party can open the data. Apps keep using the existing chain and hide only chosen parts. Operators join by staking ZAMA.
3. Confidential tokens and the auction
The main use is the ‘confidential token’, which hides balances and transfer amounts. Zama said it launched its mainnet on Ethereum in late December 2025 with a confidential USDT (cUSDT) transfer. Other candidates include sealed-bid auctions, private voting and institutional tokens.
ZAMA was first distributed through a public auction from 21 to 24 January 2026, a sealed-bid Dutch auction whose clearing price was computed on encrypted bids, a test of Zama’s own technology. Claims opened on 2 February 2026, and auction allocations were described as unlocked ERC-20 tokens.
4. Things to know
FHE is computationally heavy and far slower and costlier than ordinary computing, so throughput and hardware acceleration are the key challenges, and how many users the protocol can serve remains to be seen. Private transactions also depend on key management, so design or implementation errors could break privacy.
If enough key-holding operators collude or are compromised, encrypted data could be exposed, so how widely operators are spread matters. The token is new and its market and operating structure are still settling. Technology that hides transactions can also clash with anti-money-laundering rules, so use may be limited by local regulation.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.