Zama Finds Utility For Its Confidential Tokens on Morpho
$40M+
Confidentiality only becomes real when there's something people want to do with it. Morpho gave our product the use case institutions were already asking for and a credit network deep enough to matter from Day One.Irene Patrikios, VP of Partnerships and Growth at Zama
The Opportunity
Zama took a different path to privacy onchain. Rather than building a chain where privacy is the product, it built a protocol that adds confidentiality to the chains people already use: with FHE, balances and amounts stay encrypted while smart contracts compute on them.
That approach scales across ecosystems, but it starts with a cold-start problem. A confidentiality layer is only worth adopting when there is something worth doing confidentially.
For institutions, that something is earning on idle funds. Treasury desks want onchain yield, but on a public chain every deposit telegraphs position size, entry timing, and allocation patterns to anyone watching, competitors included. For many desks, that visibility alone rules out deploying meaningful size onchain.
Zama's opportunity was to launch its first confidential product where the demand already exists, on the mature credit network institutions already underwrite, and let every deposit compound the network effect of the protocol itself.
The Solution
Zama's Earn interface connects users to Steakhouse Confidential Prime USDC, a vault on Morpho curated by Steakhouse Financial.
The vault mirrors Steakhouse Prime USDC, one of the largest vaults on Morpho: same collateral, same markets, same risk parameters. Steakhouse curates both, so users of the confidential vault take on the same credit exposure they would in the public version.
The difference is who can see what. Users deposit confidential USDC through Zama's interface, deposits are batched every 24 hours into the vault on Morpho, and observers can see what each batch supplied but never what any individual user holds.
The Results
With one integration, Confidential USDC (cUSDC) went from a token users could hold and transfer to an asset that earns. Users can now earn variable yield from an established credit strategy without publishing their balances or positions to the chain.
With Zama's confidentiality layer on top of Morpho's open credit network, the vault has been growing quickly:
- $40M+ in confidential deposits, with no individual position visible onchain
- Demands for more assets and more vaults are coming in quick