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Key Takeaways

Zama is an open-source cryptography project building a Confidential Blockchain Protocol powered by Fully Homomorphic Encryption (FHE).

The protocol allows smart contracts to compute on encrypted data without decrypting it, enabling privacy-preserving applications on public blockchains.

Zama's technology works as a cross-chain solution, allowing developers to build confidential applications on top of any Layer 1 or Layer 2 blockchain (like Ethereum or Solana).

The ZAMA token is the native utility asset used for gas fees, governance, and incentivizing the network of validators and provers.

Introduction

Public blockchains like Ethereum and Bitcoin are transparent by design. While this transparency ensures trust and verifiability, it also means that all data is visible to everyone. This lack of privacy limits the types of applications that can be built, especially for industries like finance, healthcare, and enterprise.

Zama addresses this challenge by introducing Fully Homomorphic Encryption (FHE) to the blockchain. This cryptographic technique allows data to remain encrypted even while it is being processed. By building a protocol that enables confidential smart contracts, Zama aims to bring true privacy to the decentralized web without sacrificing the benefits of public verifiability.

What Is Zama?

Zama is an open-source cryptography company and protocol focused on making FHE accessible to developers. Its flagship product is the Zama Confidential Blockchain Protocol, which enables privacy-preserving smart contracts.

The core idea is simple but powerful: instead of revealing sensitive data to a blockchain (or a centralized server) to process it, users encrypt their data locally. The blockchain then processes this encrypted data and produces an encrypted result, which only the user can decrypt. This ensures end-to-end confidentiality for on-chain applications.

How Does Zama Work?

Zama's architecture leverages FHE to solve the "privacy vs. transparency" dilemma.

1. Fully Homomorphic Encryption (FHE)

FHE allows computations to be performed directly on encrypted data. In a typical blockchain transaction, data must be public to be processed (e.g., checking if a user has enough funds). With Zama's FHE, the smart contract can check the funds and other things while the data remains encrypted. The network validates the transaction without ever seeing the actual balance or amount.

2. Confidential smart contracts (fhEVM)

Zama has developed the fhEVM (Fully Homomorphic Ethereum Virtual Machine). This allows developers to write confidential smart contracts using standard Solidity, the same programming language used on Ethereum. Developers can specify which parts of the contract should be public and which should be private (encrypted), making it easy to integrate privacy into existing DApps.

3. Cross-chain compatibility

Zama is designed to be a "layer" that sits on top of other blockchains. It works with Ethereum, Layer 2 networks, and others. This means a developer doesn't have to leave their favorite blockchain to get privacy; they can just use Zama's technology on top of it.

Potential Use Cases

Zama's technology opens up new possibilities for blockchain applications that require data protection.

Confidential DeFi: Users can trade, lend, and borrow without revealing their positions or strategies to the public, preventing front-running and copy-trading.

On-chain identity: You can prove you are over 18 or a citizen of a certain country without uploading a photo of your ID card.

Encrypted voting (DAOs): Governance proposals can use secret ballots where votes are counted correctly, but individual choices remain private, preventing coercion and bribery.

Gaming: On-chain games can use Zama’s technology to hide certain information (e.g., "fog of war" mechanics or hidden card hands).

The ZAMA Token

The ZAMA token is the native utility asset of the Zama ecosystem. It plays a central role in securing and operating the network.

Gas fees: Users pay ZAMA tokens to execute confidential transactions and smart contracts.

Governance: Token holders can vote on protocol upgrades and parameter changes.

Incentives: Network operators who perform the computationally intensive FHE tasks (proving and verifying) can get rewarded in ZAMA tokens.

Zama (ZAMA) on Binance

Binance listed the Zama (ZAMA) token for trade on February 3, 2026 with the Seed Tag applied. Trading pairs available at launch included ZAMA/USDT and ZAMA/USDC. The announcement also included a spot trading campaign from February 3 to February 17. Eligible users will have a chance to share a total prize pool of 45,000,000 ZAMA in token vouchers.

Closing Thoughts

Privacy is one of the final frontiers for blockchain adoption. For institutions and regular users to fully embrace Web3, they need the ability to keep certain data private. Zama’s use of Fully Homomorphic Encryption offers a promising solution to data privacy. By allowing blockchains to compute on data without seeing it, Zama is laying the groundwork for a more secure, private, and usable decentralized internet.

Further Reading

What Is Fully Homomorphic Encryption (FHE)?

What Is ZKsync and How Does It Work?

What Is zkPass (ZKP)?

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