July 2026 Summaries

Zama Protocol introduces the Zama Confidential RFQ, an innovative onchain request-for-quote swap protocol designed to address the privacy concerns that deter large trades from occurring on public blockchains. Traditionally, large trades happen offchain in dark pools or OTC desks due to the risk of front-running and market impact when trades are visible onchain. This protocol ensures confidentiality by encrypting trade size and direction, allowing institutional investors and market makers to conduct large transactions without exposing their strategies. It operates through a sealed-bid auction, where whitelisted market makers submit blind quotes, and the best offer is selected and settled onchain, eliminating the potential for frontrunning and providing competitive execution prices. The Zama Confidential RFQ is built on ERC-7984, supporting a wide range of confidential token transactions including stablecoins, real-world assets, and tokenized securities, thus opening new markets for onchain finance. The protocol is currently in private beta on Ethereum, with a public launch planned for September, aiming to become a core component in the landscape of onchain finance.

Zama's Developer Programs aim to empower developers from initial experimentation to production-ready projects, with Mainnet Season 3 showcasing 188 submissions across various tracks, resulting in 9 winners. The winning projects include innovative solutions such as confidential token wrappers, encrypted distribution tooling, and private financial operations, all leveraging Fully Homomorphic Encryption (FHE) to enhance onchain confidentiality. Examples include Ghostlend for secure lending and leverage, Confidential Buybacks for discreet treasury operations, and Paayee for private consumer payments. The program highlights the shift towards encrypted onchain finance, with projects like Veilflow for confidential token distribution, indicating a trend where confidentiality becomes a standard feature rather than an optional addition. Winners received rewards in cUSDT and the showcased projects are moving from prototypes to potentially being adopted by protocols, signaling a future where onchain finance prioritizes privacy and security.

Zama has partnered with Elliptic to integrate compliance screening into confidential financial applications, a key step for institutional adoption of confidential finance that meets regulated market standards. Using Fully Homomorphic Encryption (FHE), Zama ensures end-to-end encryption of balances and transactions while maintaining a public, auditable network, distinguishing itself from mixers and anonymity tools. Elliptic, trusted by over 700 institutions, provides blockchain intelligence for wallet risk screening, ensuring that confidentiality does not facilitate illicit activities. This collaboration enables institutions to access confidential financial products without compromising compliance, as demonstrated by the live confidential USDC Prime vault. As Zama expands confidential finance applications, it continues to work with infrastructure providers to develop the technologies and standards needed for institutional scalability, presenting compliant confidential finance as a foundational solution for financial institutions.

TFHE-rs is a library designed for developers and researchers seeking control over TFHE computations without delving into low-level implementations, aiming to provide a stable, high-performance, and production-ready platform for advanced TFHE features. The library integrates with Homomorphic Processing Units (HPUs), which allow computations on encrypted data, and the tutorial by Lucas Sainati demonstrates how to leverage HPUs, specifically running on FPGA, to enhance TFHE computation speeds. The project is open-source, inviting contributions and support through GitHub, community channels, and programs like the Zama Bounty and Grant Program to further the field of Fully Homomorphic Encryption (FHE).

The Zama Yield Boost Campaign is a 12-week initiative running from June 24 to September 15, 2026, designed to enhance returns on the Steakhouse Confidential Prime USDC vault through a phased distribution strategy called "daily drip." The campaign is structured into three phases with decreasing boost intensity, allowing participants to earn rewards based on the size and duration of their deposits, with larger and earlier positions capturing more of the daily yield. There are no lockups or minimum deposit requirements, making it accessible to all depositors. The projected annual percentage yield (APY) decreases as the total value locked (TVL) grows, with the highest APY at the start and diminishing towards the end of the campaign. After the boost period, participants will continue to earn the native yield of the vault, with the overall APY being contingent on real-time deposits and market conditions.

In June, the Zama ecosystem witnessed significant developments, particularly with the launch of Confidential DeFi, which allows for private transactions in decentralized finance, exemplified by the Steakhouse Confidential Prime USDC vault on Morpho. This new yield venue, curated by Steakhouse Financial, has quickly amassed over $14 million in deposits, offering the same parameters and strategies as its predecessor but with enhanced privacy features. The Zama app emerged as a key tool for transforming existing assets into confidential tokens, while initiatives like AsyncWrapper provide anonymous on-ramps to confidentiality. The month also saw $ZAMA trading on Uphold, expanding access for various buyers, and highlighted substantial growth with over $230 million in cumulative Total Value Shielded (TVS) and 9,000 unique wallets holding shielded assets. Community engagement continued with competitions and collaborations, including a focus on institutional-grade privacy in DeFi and contributing to the Ethereum Foundation's Clear Signing effort. As Zama looks forward to the future, it emphasizes the growing importance of confidentiality in digital asset markets.

Valerio Leo, founder of Raycash, discusses advancements in confidential on-chain finance through the use of decoys and asynchronous wrapping flows to improve the privacy of transitioning from public ERC-20 assets to confidential ERC-7984 tokens. The process involves native minting, where issuers directly create confidential tokens, and wrapping, where existing ERC-20s are converted into confidential tokens. While wrapping maintains simplicity and efficiency, it exposes the initial transaction details, leading to the development of an anonymous wrap that conceals the link between deposited ERC-20s and the resulting confidential tokens. The proposed solution involves a two-step process: first, recording a note of the deposit with encrypted recipient information, and second, allowing the recipient to finalize the transaction by matching and minting the tokens in a batch that includes decoys to obscure the link between deposits and recipients. This approach enhances privacy by ensuring that the initial transaction and the recipient's balance remain concealed, while still allowing for compliance and non-custodial deposit screening.