Crypto VCs Crown New Unicorn as Confidentiality Startup Zama Raises $57M at $1 Billion Valuation

Zama, an open-source cryptography startup aiming to carry full privateness to public blockchains, has raised $57 million in Collection B funding led by Pantera Capital and Blockchange Ventures. The spherical pushes Zama’s valuation over $1 billion, making it the primary firm working in superior encryption to hit unicorn standing.

Based in 2020, Zama seeks to carry privateness to public blockchains with out compromising transparency or auditability. Zama’s newest funding comes alongside the launch of its public testnet and “confidential” blockchain protocol, which permits builders to construct encrypted sensible contracts and decentralized purposes.

“We’re specializing in monetary purposes, particularly funds,” Zama CEO Rand Hindi informed Decrypt. “It is clear from all our conversations with each stablecoin issuers and folks utilizing stablecoins that they need confidentiality in on-chain funds.”

Whereas encryption is on the heart of the blockchain business, homomorphic encryption permits customers to encrypt knowledge that may then be processed with out decrypting it, making it attainable to subject cryptocurrencies, stablecoins, or course of funds on public blockchains with out revealing transaction particulars to the world.

Absolutely homomorphic encryption, or FHE, “means that you can recompute the state utilizing the encrypted knowledge,” Hindi defined. “This implies you’ve gotten the identical stage of public verifiability, however without having to see the precise knowledge, making [it] successfully the one confidentiality expertise that’s each safe and publicly verifiable.”

Hindi stated that Zama will launch first on the Ethereum community in July earlier than shifting to different Ethereum Digital Machine-enabled blockchains.

“We selected Ethereum as it is the canonical chain the place numerous the stablecoins are issued. So it is sensible to have the confidentiality layer there first,” he stated. “Transferring from Ethereum to different EVM chains will occur pretty quickly, because it’s the identical stack.”

As for Solana, Hindi stated Zama is focusing on a 2026 integration using a two-fold strategy.

“First, we have to adapt our expertise to the SVM and have it audited, which takes time,” Hindi stated. “Second, the expectation from Solana builders relating to efficiency is that they’ll do lots of, if not 1000’s of transactions per second. As soon as we’re in a position to help Solana speeds, we are going to launch there.”

Not like controversial privateness instruments like coin mixers, which have been focused by governments and regulation enforcement, Hindi stated Zama’s strategy focuses on encrypted content material whereas preserving the transaction itself seen.

“With Twister Money, you make the transaction untraceable, however the content material is public,” he stated. “FHE, then again, hides the on-chain knowledge, not the transaction hint. You may see who interacted with whom, however you can’t see their balances, quantities, and so on. This implies you may at all times hint again the transaction to a KYC’d pockets if wanted.”

A key function within the protocol, Hindi defined, is what Zama calls “programmable confidentiality,” which supplies builders management over who can decrypt on-chain knowledge throughout the sensible contract.

“For instance, a stablecoin issuer may enable a person to see their very own steadiness, but additionally a compliance officer,” Hindi stated. “The Zama protocol mainly doesn’t implement something—it’s fully as much as the developer to resolve what compliance guidelines they wish to observe.”

This stage of operability, Hindi stated, is the ultimate piece wanted for widespread adoption of blockchain expertise.

“The problem was efficiency, however Solana and layer-2 networks have solved this. Now that confidentiality can also be solved, it means we will begin constructing the entire monetary purposes on-chain, with out having to fret about velocity or privateness—each of that are important if you wish to scale to issues like international retail funds,” he stated.

After years of working in cryptography, Hindi stated Zama attaining unicorn standing felt lengthy overdue.

“Actually, it feels nice to see superb buyers and builders now care about confidentiality. It is a battle I have been combating for over a decade,” he stated.

Edited by Andrew Hayward