Zama Launches on Mainnet With First Confidential USDT Transfer on Ethereum

After several years of development, Zama has officially launched on Ethereum mainnet, completing the first confidential USDT (cUSDT) transfer using fully homomorphic encryption. In the days following the launch, the Zama Public Auction became the first live production application built on the Zama Protocol, offering a real-world demonstration of scalability, reliability, and encrypted computation at scale.

On January 24, the Zama auction application briefly became the most-used app on Ethereum, surpassing activity levels of major protocols such as USDT, USDC, and Uniswap. Within just three days, Zama’s Total Value Shielded exceeded $100 million, a milestone that took other Ethereum-based privacy protocols years to reach. Throughout this period, the protocol experienced no downtime and matched Ethereum’s native throughput, reinforcing the claim that fully homomorphic encryption is now production-ready for financial applications.

A Confidential Auction Designed for Fair Price Discovery

Zama’s token launch was conducted through a confidential sealed-bid Dutch auction, a structure chosen after analyzing more than one hundred previous token generation events. Auctions were identified as offering the strongest balance between fair distribution, efficient price discovery, and capital efficiency, while confidentiality played a critical role in preserving bidding integrity.

Participants submitted bids with a publicly visible price and a privately encrypted amount, preventing both other users and automated systems from observing bid sizes. Once the auction closed, the clearing price was calculated directly on encrypted data using homomorphic computation, ensuring that no sensitive bidding information was ever exposed during the process.

Record Participation and Rapid Capital Commitment

The auction ran from January 21 to January 24, 2026, and generated more than $121 million in Total Value Shielded directly through the Zama auction application. Total value committed reached $118.5 million across all sale channels, with nearly 25,000 bids placed by over 11,000 unique participants. Demand exceeded available supply by more than two times, with a clearing price of $0.05 and a final paid amount of $44 million for allocated tokens.

What Comes Next for the Zama Ecosystem

The public auction represented 12 percent of Zama’s initial token supply and was structured alongside a community allocation and a pre-TGE segment. An upcoming pre-TGE sale will allow participants whose bids were not filled to purchase tokens at the auction clearing price, subject to a participation cap. Token claiming opens on February 2, with $ZAMA distributed as fully unlocked ERC-20 tokens usable immediately for encryption and decryption services on the Zama Protocol.

Token holders will be able to stake $ZAMA with operators of their choice to earn rewards while helping secure the network. Through the Zama Portfolio, users can already begin shielding and transferring confidential assets, marking a shift away from fully transparent blockchain transactions. Zama describes this transition as the blockchain equivalent of HTTPS, a vision it calls HTTPZ, signaling a new era of privacy-first decentralized finance.