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June 25, 2025 – Zama, the open-source cryptography company building state-of-the-art Fully Homomorphic Encryption (FHE) solutions for blockchain and AI, today announced the successful close of its $57 million Series B funding round. This significant investment propels Zama's valuation to over $1 billion, making it the world's first FHE unicorn and a pivotal player in the future of confidential computing.
The Series B round was co-led by leading U.S.-based investment firms Pantera Capital and Blockchange Ventures, with Blockchange Ventures being an early backer since Zama's $73 million Series A round in March 2024. Notable investors in Zama also include blockchain pioneers Juan Benet, Gavin Wood, and Julien Bouteloup. The new capital will accelerate Zama's mainnet launch, drive ecosystem adoption, and fuel ongoing research to scale FHE-powered financial applications to thousands of transactions per second.
The announcement coincides with the highly anticipated unveiling of the Zama Confidential Blockchain Protocol and its public testnet, set to go live on July 1st. This groundbreaking protocol is designed to enable confidential smart contracts on any Layer 1 (L1) or Layer 2 (L2) blockchain, addressing the critical need for privacy that has long hindered the mass adoption of decentralized applications.
"With this latest raise, Zama becomes the world's first unicorn in the FHE space, which is a major milestone for the industry," said Dr. Rand Hindi, CEO and co-founder of Zama. "Reaching a $1 billion valuation reflects the market's confidence in our FHE technology and our team's ability to deliver confidentiality to financial applications on-chain. We've worked hard to remove the historical barriers around performance and accessibility, and now we're focused on getting this technology into the hands of builders and real-world products."
Addressing Blockchain's Confidentiality Dilemma
While public verifiability is a cornerstone of blockchain technology, it necessitates disclosing all transactions and data, posing a significant challenge for sensitive information such as financial assets, identity, and governance. This inherent lack of confidentiality has been a major impediment to widespread blockchain adoption. Zama's mission is to safeguard privacy by encrypting the internet end-to-end, a vision that extends to the blockchain domain.
The Zama Confidential Blockchain Protocol offers a transformative solution by providing:
- End-to-end encryption of transaction inputs and state, ensuring that data remains private even from node operators.
- Composability between confidential and non-confidential contracts, allowing developers to build seamlessly on existing tokens and dApps.
- Programmable confidentiality, empowering smart contracts to define who can decrypt what, offering granular control over privacy rules.
The Zama Protocol is not a new L1 or L2 blockchain; instead, it functions as a cross-chain confidentiality layer. This design allows users to interact with confidential dApps from their preferred existing chains without the need for bridging.
The Power of Fully Homomorphic Encryption (FHE)
At the core of Zama's innovation is Fully Homomorphic Encryption (FHE), often referred to as the "holy grail" of cryptography. FHE allows computations to be performed directly on encrypted data without ever needing to decrypt it, ensuring that sensitive information remains secure throughout its lifecycle. Zama has spent the last five years making FHE accessible, easy, and fast, achieving a 100x speed improvement compared to five years ago. Zama's FHE technology is also post-quantum, meaning it is resistant to attacks from future quantum computers.
Beyond FHE, the Zama Protocol strategically integrates Multi-Party Computation (MPC) to decentralize the global network key and Zero-Knowledge Proofs (ZK) to verify the correctness of encrypted inputs. This multi-faceted approach ensures robust security, scalability, and decentralization.
Unlocking New Use Cases for Blockchain and AI
The Zama Confidential Blockchain Protocol opens up a vast new design space for blockchain applications, particularly in finance, identity, and governance, as well as AI.
Key use cases include:
- Confidential Payments: Enabling end-to-end encrypted balances and transfer amounts for stablecoins and other on-chain payments, with embedded compliance features.
- Tokenization & Real-World Assets (RWAs): Allowing institutions to tokenize and trade assets on public blockchains like Ethereum and Solana while maintaining confidentiality for activity and investor identity, and facilitating on-chain KYC/AML checks.
- Confidential DeFi: Solving issues like privacy of holdings and front-running by enabling end-to-end encrypted swaps, confidential lending, and on-chain credit scoring.
- Confidential Tokens: Facilitating sealed-bid auctions and private token distributions for airdrops, grants, and vesting schedules, ensuring privacy for distributed amounts.
- Composable On-Chain Identity: Building Decentralized ID (DID) and Verifiable Credentials (VC) systems where identity remains encrypted but composable with dApps, crucial for compliance and privacy.
- Confidential Governance: Enabling private on-chain voting for DAOs, companies, or governments, where individual votes remain confidential, and only the final tally is revealed.
- On-Chain Corporations: Allowing companies to manage sensitive information like cap tables, financials, and employee registers on-chain with full confidentiality.
- Prediction Markets: Ensuring unbiased predictions by keeping inputs encrypted until periodically revealed.
- Data Marketplaces for AI: Empowering users to selectively share and monetize their data for AI model training, potentially even training models on encrypted data.
Developer-Friendly and Scalable
Zama is committed to making FHE accessible to all developers. The Zama Protocol allows developers to build confidential applications using familiar programming languages like Solidity and Python, without requiring deep cryptographic knowledge. Zama provides user-friendly FHE libraries (TFHE-rs, Concrete, Concrete ML, fhEVM) and a Javascript SDK to streamline client-side encryption and decryption. Deploying applications on the Zama Protocol is free and requires no additional licensing.
The protocol is designed for horizontal scalability, leveraging Zama's TFHE-rs library. While current throughput is around 20 transactions per second (tps) per host chain, Zama is rapidly advancing. The company plans to move from CPU to GPU-based computations for 50-100 tps, then to FPGA accelerators targeting 500-1000 tps, and ultimately to dedicated ASIC hardware for 10,000+ tps per chain. This exponential increase in speed ensures that FHE can meet the demands of web-scale applications.
"Not since I first saw Ethereum in 2014, have I seen a company commercializing an entirely new technology that could be as foundational to our global technology infrastructure," said Ken Seiff, Co-Managing Partner of Blockchange Ventures. "As finance moves on-chain and regulations tighten globally, public blockchains are likely to be the first beneficiaries of what Zama is building. But the opportunity goes well beyond that, as industries such as healthcare, defense, and virtually all others that use cloud computing could massively benefit from the stepchange in confidentiality and compliance pioneered by FHE, and in particular, Zama.”
Paul Veradittakit, Managing Partner at Pantera Capital, added, "Zama's FHE protocol launch is a cryptography milestone. By enabling efficient, developer-friendly FHE, Zama unlocks secure, compliant, and verifiable dApps for AI, crypto, and cloud. The protocol paves the way for on-chain identity, financial, and consumer applications—previously out of reach for developers."
Join the Confidential Revolution
The Zama Public Testnet will go live on July 1st, with a mainnet launch on Ethereum planned in the coming months, alongside the release of the $ZAMA token. Zama will then progressively deploy the protocol on other EVM chains and Solana.
Developers, enterprises, and individuals interested in building the future of confidential applications are invited to sign up for early access to the Zama Public Testnet, full documentation, and examples.
About Zama
Zama is an open-source cryptography company specializing in state-of-the-art Fully Homomorphic Encryption (FHE) solutions for blockchain and AI. Founded by Dr. Pascal Paillier, a pioneer in FHE, and Dr. Rand Hindi, a serial privacy entrepreneur, Zama is dedicated to making FHE accessible, easy, and fast. Its user-friendly FHE libraries empower developers to easily integrate end-to-end encryption without deep cryptography knowledge, enabling critical use cases in confidential blockchain, AI, and encrypted Software-as-a-Service (SaaS). Zama's mission is to safeguard privacy by encrypting the internet end-to-end.Compiled by CMO Intern team
