The Zama protocol introduces a new approach to privacy on public blockchains. Its key feature is the use of fully homomorphic encryption (FHE), which conceals balances and transfer amounts without disrupting the operation of smart contracts and DeFi applications.

How Zama Works

Unlike traditional privacy solutions, Zama implements encryption at the data level—user balances and transfer amounts remain hidden even with full blockchain transparency. This is achieved through FHE, which allows computations on encrypted data without decryption. At the same time, smart contracts and DeFi protocols continue to operate as usual.

The Role of the ZAMA Token

The ZAMA token is required for paying protocol operations and staking. All fees collected for using the protocol are burned, which affects the token's economics. The token is currently available on the Bybit exchange.

Privacy Without Compromising Functionality

Zama's main advantage is its combination of privacy with the full functionality of DeFi and smart contracts. This creates new opportunities for users who value anonymity but do not want to give up the benefits of decentralized financial services.