The Zama Confidential Blockchain Protocol (also known as the Zama Protocol) allows for the confidential issuance, management, and trading of assets on current public blockchains. Described as the most advanced confidentiality protocol available, it provides:

• End-to-end encryption for transaction inputs and state, ensuring that data remains invisible to everyone, including node operators.
• Composability between both confidential and non-confidential contracts, enabling developers to build upon existing tokens, dapps, and contracts.
• Programmable confidentiality, where smart contracts determine decryption access, giving developers complete authority over confidentiality rules within their applications.

Rather than functioning as a new L1 or L2, the Zama Protocol acts as a cross-chain confidentiality layer atop existing chains. This means users can interact with confidential dapps from their chosen location without needing to bridge assets to a new chain.

The protocol utilizes Zama’s cutting-edge Fully Homomorphic Encryption (FHE) technology, which permits computation directly on encrypted data. FHE is often regarded as the “holy grail” of cryptography because it facilitates end-to-end encryption for any application, whether onchain or offchain. The team believes that just as the internet evolved from unencrypted HTTP to HTTPS for data in transit, the next logical progression is using FHE to make end-to-end encryption default in every application, a concept they term HTTPZ.

The $ZAMA token

$ZAMA serves as the native token for the Zama Protocol, utilized for staking and protocol fees. It operates on a burn and mint model: 100% of fees are burnt, while new tokens are minted to compensate operators.

Fee model

Deploying a confidential app on a supported chain is permissionless and free. The Zama Protocol does not charge for FHE computation itself; instead, fees apply to:

Verifying ZKPoKs. Users must pay a fee to the Zama Protocol to verify encrypted inputs included in a transaction.

Decrypting ciphertexts. A fee is required by the Zama Protocol when a user wishes to decrypt a ciphertext.

Bridging ciphertexts. Users must request and pay a fee to the Zama Protocol to bridge an encrypted value from one chain to another.

These protocol fees may be covered by a relayer, the frontend app, or the end user. Consequently, developers can build applications where users are not required to hold $ZAMA tokens directly.

While paid in $ZAMA tokens, protocol fees are priced in USD. A price oracle frequently updates the $ZAMA/USD rate on the Gateway, adjusting the quantity of $ZAMA tokens required for each protocol function. This approach offers several benefits:

it guarantees that protocol fees reflect usage rather than speculation

it provides cost predictability for relayers, developers, and users, allowing them to model expenses in USD instead of volatile tokens.

Staking rewards

To run the protocol and earn associated staking rewards, operators must stake $ZAMA tokens. Reward tokens are minted based on an inflation rate (initially 5%), which governance may adjust.

Upon distribution, rewards are first divided by role (KMS nodes, coprocessors, sequencer), then allocated pro-rata based on the square root of each operator’s stake within that group. Each operator subsequently determines how to share their rewards with delegators.

This distribution method ensures operators are compensated according to their work while preventing reward concentration among a small number of operators.

The Team

Zama is a global cryptography company established in 2020 by Dr Rand Hindi (CEO) and Dr Pascal Paillier (CTO). Other key researchers include Prof Nigel Smart (Chief Academic Officer) and Dr Marc Joye (Chief Scientist). With more than 90 employees, nearly half of whom hold PhDs, Zama boasts the largest research team in FHE.

About the founders:

Rand is a deeptech investor and entrepreneur. He serves as CEO at Zama and is a partner at Unit.vc, having invested in over 100+ companies in biotech, AI, and cryptography. A competitive biohacker, Rand currently ranks in the top 5% of the Rejuvenation Olympics with an aging rate of 0.68. He began coding at age 10, founded a Social Network at 14, and started his PhD at 21. He later created Snips, a confidential AI startup acquired by Sonos. His background includes advising the government on Privacy and AI issues as a member of the French Digital Council, lecturing at Science Po University in Paris, and advising various defense, AI, and biotech firms. He holds a BSc in Computer Science and a PhD in Bioinformatics from University College London (UCL).

Pascal is a pioneer in cryptography and FHE, serving as CTO at Zama. He invented one of the first additive homomorphic schemes (the Paillier encryption scheme), which remains widely used today. Pascal has authored dozens of papers, making significant contributions to fields such as FHE and smart cards. Before joining Zama, he founded CryptoExperts, a leading cryptography consulting firm, and led the cryptography innovation team at Gemalto. A 2025 IACR fellow, he has received multiple research awards and led several ISO standards for cryptography. He holds a PhD in cryptography from Telecom Paris.