Zama, an open-source encryption startup aimed at bringing full privacy to public blockchains, has raised $57 million in Series B funding led by Pantera Capital and Blockchange Ventures. The round pushed Zama’s valuation over $1 billion and became the first company with advanced encryption to reach unicorn status.
Founded in 2020, Zama aims to bring privacy to public blockchains without compromising transparency or auditability. Zama’s latest funding, alongside the launch of public testnets and “confidential” blockchain protocols, allows developers to build encrypted smart contracts and distributed applications.
“We focus on financial applications, especially payments,” said Zama CEO Rand Hindi. Decryption. “From all the conversations we have with both Stablecoin publishers and those using Stablecoin, it’s clear that we want to keep the chain payments confidential.”
Cryptocurrency is at the heart of the blockchain industry, but homogenous encryption allows users to encrypt data that can be processed without decrypting it, allowing users to issue cryptocurrency, stable coins, or public blockchain payments without revealing details of transactions to the world.
Fully homomorphic encryption, or FHE, “enables the state to be recalculated using encrypted data,” Hindi explained. “This means that we have the same level of public verifiability, but we don’t have to look at the actual data and make (IT) the only confidentiality technology that is practically secure and publicly verifiable.”
Hindi said Zama will move to other Ethereum virtual machine-enabled blockchains before it first launches on Ethereum Network in July.
“Ethereum chose Ethereum because it is a standard chain where a lot of stupid things are published, so it makes sense to have a layer of confidentiality first,” he said. “The move from Ethereum to other EVM chains happens quite quickly, as they are on the same stack.”
As for Solana, Hindi said Zama is using two approaches to target 2026 integration.
“First, you need to adapt the technology to SVM and have it audited. It will take time,” Hindi said. Second, the expectations from Solana developers regarding performance are that they can do hundreds, if not thousands of transactions per second. Once you can support Solana’s speed, you’ll start there. ”
Unlike controversial privacy tools like coin mixers targeted by governments and law enforcement, Zama said that Zama’s approach focuses on encrypted content while making the transaction itself visible.
“With Tornado Cash, it makes transactions untrackable, but the content is public,” he said. “On the other hand, FHE hides on-chain data, not transaction traces. You can see who you interacted with, but you can’t see balance, amount, etc.
A key feature of the protocol is what Zama calls “programmable confidentiality” and allows developers to control who can decrypt on-chain data within a smart contract.
“For example, a Stablecoin publisher can not only allow users to see their balance, but also allow compliance personnel to do so,” Hindi said. “The Zama protocol basically doesn’t enforce anything. It’s entirely up to the developer to decide which compliance rules to follow.”
This level of usability is the last piece needed for the widespread adoption of blockchain technology.
“It used to be performance, but Solana and the Layer-2 network solved this. This also means that confidentiality has been resolved, meaning you can start building all your financial applications without worrying about speed or privacy.
After working in Hindi for many years, Hindi said Zama, who achieved the status of unicorn, felt that he had been postponed for a long time.
“To be honest, it’s great to see amazing investors and builders interested in confidentiality. That’s a battle I’ve fought for over a decade,” he said.
Edited by Andrew Hayward
