Two rounds of financing totaling $130 million: An overview of the unicorn Zama, which focuses on FHE technology

Author: momo, ChainCatcher

Recently, the open-source cryptography project Zama, focused on Fully Homomorphic Encryption (FHE), has finally launched its testnet.

Over the past year, Zama has raised $130 million through two rounds of significant financing, achieving a valuation of $1 billion.

In June 2025, Zama completed a $57 million Series B funding round led by Pantera Capital and Blockchange.

In March 2024, Zama had previously completed a $73 million Series A funding round led by Multicoin Capital and Protocol Labs, with participation from well-known institutions and individual investors such as Blockchange, Stake Capital, Metaplanet, Ethereum co-founder & Polkadot founder Gavin Wood, Solana co-founder Anatoly Yakovenko, and Filecoin founder Juan Benet.

What is Zama's open-source Fully Homomorphic Encryption technology? Why has it attracted significant investment? What recent developments have occurred? This article provides a brief overview.

What is Fully Homomorphic Encryption technology? How is it different from ZK?

Apart from ZK, another key privacy technology mentioned by Vitalik is Fully Homomorphic Encryption (FHE).

Fully Homomorphic Encryption (FHE) allows for arbitrary complex computations to be performed directly on encrypted data without needing to decrypt it first.

The computation results remain encrypted, and only users with the key can decrypt to obtain the final result.

The core advantage of FHE is the privacy of data and computation; even the nodes executing the computation (such as cloud servers or blockchain nodes) cannot access the plaintext data.

It may seem similar to ZK, but there are significant differences between the two. FHE emphasizes privacy in computation, while ZK emphasizes privacy in verification. In other words, FHE allows us to perform arbitrary computations while the data remains fully encrypted, whereas ZK enables us to verify that a statement is true without knowing the process or the original data. The two are more complementary; FHE provides encrypted computation on-chain, while ZK ensures verification privacy.

Zama's Technological Progress and Roadmap

Although FHE is an innovative technology for ensuring privacy, it has historically struggled to find practical applications due to slow speeds, limited use cases, and difficulty for developers. Zama has been dedicated to solving these technical issues.

According to Zama's official white paper, Zama has developed efficient FHE technology that is 100 times faster than five years ago. With GPU acceleration, it can soon support over 100 transactions per second, and with dedicated hardware (such as FPGA and ASIC), it could support thousands of transactions per second.

In terms of developer friendliness, it supports any type of application as well as common programming languages like Solidity and Python. Additionally, Zama's FHE technology is post-quantum secure, meaning no known quantum algorithms can break it.

In addition to FHE, the Zama protocol also integrates Multi-Party Computation (MPC) and Zero-Knowledge Proofs (ZK) to address the shortcomings of encryption schemes.

Recently, Zama announced the launch of its public testnet. Zama also revealed that it plans to launch its mainnet on Ethereum in the fourth quarter of this year, bringing confidentiality features to Ethereum. Initially, it will only support applications approved by Zama. Furthermore, Zama plans to conduct a Token Generation Event (TGE) by the end of the year and expand to more EVM-compatible chains.

In 2026, Zama aims to deploy on Solana, supporting Solana Virtual Machine (SVM) applications.

Application Directions Focused by Zama

What future use cases will Zama have? Zama has mentioned three typical scenarios: encrypted payments, RWA, and DeFi.

Encrypted Payments: The Zama protocol achieves end-to-end encryption for stablecoin payments through FHE, protecting the privacy of account balances and transfer amounts while embedding compliance features (such as KYC/AML) in smart contracts. It supports scenarios like credit card payments, salaries, and cross-border remittances, meeting the confidentiality and compliance needs of on-chain financial transactions.

RWA: Zama enables traditional financial institutions to tokenize assets (such as fund shares, stocks, and bonds) on public blockchains (like Ethereum and Solana), maintaining the confidentiality of transaction activities and investor identities. KYC/AML checks can be executed directly through smart contracts without the need for private blockchains, achieving interoperability between institutions.

DeFi: The Zama protocol supports end-to-end encrypted DeFi transactions by encrypting transaction amounts and asset types, addressing users' reluctance to disclose assets and the issue of bots front-running trades. Other applications include confidential lending, on-chain credit scoring, and options pricing, enhancing the privacy and user experience of DeFi.

Background of Zama's Team

Zama's ability to secure significant funding from multiple well-known investment institutions and individual investors may be attributed to its team's extensive background in cryptography.

Zama was founded in 2020 by Dr. Rand Hindi (CEO) and Dr. Pascal Paillier (CTO), with nearly half of the team holding PhDs in cryptography, machine learning, or blockchain.

Rand Hindi, co-founder and CEO of Zama, is an expert in artificial intelligence and privacy protection technologies, holding a PhD in bioinformatics and focusing on data privacy and AI applications. He started programming at the age of 10 and created a social network at 14. He founded the AI voice platform Snips (later acquired by Sonos), where he was introduced to Fully Homomorphic Encryption (FHE) and adopted it as Zama's core technological direction. Hindi is also a partner at Unit Ventures, investing in several cryptography, AI, and biotechnology companies.

Pascal Paillier, co-founder and CTO of Zama, has over 25 years of experience in the IT security industry, focusing on designing and developing secure cryptographic primitives (such as Fully Homomorphic Encryption, anonymous credentials, etc.) and cryptographic software for embedded architectures (such as smart cards).

Pascal Paillier has published dozens of research papers in the field and holds around 25 patents, many of which are currently applied in smart card technology. He is also a member of the International Association for Cryptologic Research (IACR) and has participated in the ISO SC 27 WG 2 (cryptographic standards) work, having won the Best Paper Award at Asiacrypt 2005.

Pascal Paillier is also a serial entrepreneur; before founding Zama, he established a consulting service company in applied cryptography called CryptoExperts.

Recommended Reading: “Interview with Zama CEO: How did the 'wave-maker' of FHE build a $400 million valuation in four years?”