Zama: everything you need to know about ZAMA

What is Zama?

Zama is a blockchain infrastructure project that focuses on privacy. On most public blockchains, almost everything is visible: wallet activity, token movements, and sometimes even sensitive financial information. Zama wants to change that by adding an extra layer that keeps data encrypted while it is processed on a blockchain.

They do this by building confidential smart contracts on existing blockchains. This allows applications to process sensitive data without it being visible to the outside world. Zama thus focuses mainly on use cases where privacy is important, such as payments, tokenized assets and governance.

How does Zama work?

Zama uses a technique called Fully Homomorphic Encryption (FHE). This allows computations to be performed on encrypted data without first decrypting it.

In practice, this means that a smart contract can process data without making that data public. Think of private transactions or votes where the content remains hidden.

Zama runs as an additional layer on top of existing blockchains. The underlying blockchain itself remains responsible for transactions and security, while Zama handles the confidential computations.

The ZAMA token

ZAMA is the utility token of the protocol. The token is used to pay for encryption and decryption within the network. In addition, operators and stakers receive ZAMA as a reward for running and securing the protocol. Users can also delegate their tokens to operators to share in staking rewards.

The technology behind Zama

Zama’s technology revolves around combining cryptography with blockchain. By applying FHE, smart contracts can work with encrypted data, something that is not possible on most blockchains.

An important advantage is that developers can continue to use existing tools. Zama is designed to work with familiar ecosystems, so that applications don’t have to be built from scratch.

The Zama ecosystem

Zama focuses mainly on infrastructure for other projects. The ecosystem consists of:

• tools and libraries for developers
• support for existing blockchains
• privacy-related applications, such as confidential tokens and governance

Benefits of Zama

• More privacy: allows processing sensitive data on public blockchains in a protected manner
• Works with existing networks: Zama is designed as an extra layer on top of existing blockchains
• New applications: enables use cases such as private payments, confidential assets and shielded governance

Disadvantages of Zama

• Extra infrastructure layer: Zama adds components such as coprocessors, key management, and a gateway. That makes the system powerful, but also heavier than ordinary smart contracts.
• More costs and steps: for functions such as decryption, verification and bridging, additional protocol fees are required. As a result, confidential applications can be more expensive and more complicated than standard on-chain apps.

Who are the founders of Zama?

Zama was founded by Rand Hindi and Pascal Paillier. The team largely consists of cryptographers and researchers with a focus on privacy technology.