Zama to Hold First-Ever Onchain Sealed-Bid Dutch Auction for $ZAMA After Mainnet Launch

Zama, the open-source cryptography firm best known for its work on Fully Homomorphic Encryption (FHE) for blockchain, said on Tuesday that it will launch the Zama Protocol mainnet and follow the rollout with a public token sale, a sealed-bid Dutch auction onchain that the company says will be the first of its kind.

The auction, scheduled for January with the exact date and participation details to be revealed in early January, will sell 10 percent of the $ZAMA token supply. Unlike typical token offerings that often occur before a product is live and rely on airdrops or speculative pricing, Zama plans to sell tokens to users, developers and node operators of an already-running mainnet. The company emphasized that bids will be publicly visible in price, but that bid sizes will remain confidential thanks to Zama’s own FHE technology, which encrypts bid amounts onchain.

Zama says the sealed-bid Dutch auction model has historical precedent; it was used to price Google’s IPO in 2004, and that using encryption for bid amounts will produce fairer, manipulation-resistant price discovery. The token itself will power the protocol economy: applications will pay fees to encrypt and decrypt data, while node operators will stake $ZAMA to secure the network and earn rewards.

“This token auction represents much more than a sale — it is the starting point for a confidential, compliant onchain financial system,” said Dr Rand Hindi, CEO and co-founder. “Zama makes it possible for institutions to issue, transfer, and trade assets privately on public blockchains, opening the door for the $100 trillion financial industry to migrate onchain. Zama is to blockchain what HTTPS was to the internet. We call it HTTPZ.”

Confidential Finance Push

Zama describes the Protocol as a privacy layer for existing public blockchains such as Ethereum that allows anyone to issue, transfer and trade assets confidentially while keeping transactions auditable and compliant. The company argues that institutions have long faced a trade-off between transparency and privacy, operate transparently and expose sensitive data, or protect privacy and risk regulatory non-compliance, and that its Confidential Blockchain Protocol removes that trade-off by enabling encrypted data to be processed and verified directly onchain without ever being decrypted.

At the core of Zama’s approach is Fully Homomorphic Encryption, a cryptographic technique that permits computation on encrypted data. Zama says FHE enables onchain data to remain securely encrypted against both current and future threats, including quantum attacks, while remaining publicly verifiable and composable with decentralized finance and other financial applications. In practice, anything currently done with non-confidential tokens on blockchains, Zama says, can be done confidentially on its network.

The company highlighted a range of confidential use cases that its mainnet and partners are already developing. Confidential stablecoins could enable encrypted payroll and cross-border payments that preserve privacy while embedding AML controls. Encrypted DeFi could protect swaps, lending and derivatives from front-running and data leakage. Private tokenization promises confidential LP shares and securities where investor data and positions stay encrypted yet auditable, and confidential governance could keep votes and holdings private while revealing only final tallies.

Zama’s mainnet is launching with an expanding partner ecosystem that the company says is already bringing those use cases to life. Among the projects named are Deberrys, billed as the first truly confidential auction house on blockchain; Zaiffer, a privacy-preserving DeFi provider; Orion Finance, focused on verifiable, privacy-preserving portfolio management; and tGBP, a fully collateralized confidential stablecoin pegged 1:1 to the British Pound. TokenOps, Raycash, Shiba Inu’s ecosystem, DFNS and security firm OpenZeppelin, which Zama said is collaborating on a Confidential ERC-20 token standard, were also listed as partners.

Zama boasts what it calls the world’s largest research team focused on FHE, with more than 100 cryptographers, engineers and blockchain developers. The startup has raised over $150 million from investors including Pantera Capital, Multicoin Capital, Protocol Labs, Metaplanet and Blockchange Ventures, and was recently valued at more than $1.2 billion, according to the company. The upcoming token auction is framed as a milestone on Zama’s roadmap toward enabling fully homomorphic onchain computation.

Founded by Dr. Pascal Paillier and Dr. Rand Hindi, Zama has pitched its technology as a foundational primitive for confidential finance on public blockchains, an attempt to give institutions the privacy guarantees they need while preserving auditability and regulatory compliance. The January sealed-bid Dutch auction will be the first public test of selling token supply directly on a live mainnet using the same confidential mechanisms Zama says will underpin the protocol’s future.