On September 16, 2026, Zama co-founder and CEO Rand Hindi appeared on The Rollup podcast to discuss Zama’s newly launched scalable confidential DeFi. He explored what this launch means, why confidentiality will become increasingly critical as institutional capital moves on-chain, the future of programmable vaults, and how Zama is building its business model and token value capture around confidential finance.

Editor’s Note: Over the past week, ZAMA has risen over 112%, with a 30-day gain exceeding 80%, and reached an all-time high of $0.1052 on September 21; as of publication, it is trading at approximately $0.101, with a market cap of around $248 million and an FDV of approximately $1.14 billion. This rally has clear fundamental catalysts: On September 15, Zama announced the scaling phase of Privacy-Preserving DeFi, launching 16 private vaults and introducing a private swap protocol; on September 17, it integrated with Merkl to enable incentive distribution for privacy tokens. Prior to this, its first private vault collaboration with Steakhouse and Morpho achieved a TVL of $40 million, ranking among Morpho’s top ten USDC vaults—marking the starting point of this narrative. Privacy-Preserving DeFi, built on Fully Homomorphic Encryption (FHE), is transitioning from an experimental concept into a market-recognized asset class. Below is the original podcast content:

A vault with $40 million in TVL convinced Zama to expand its confidential DeFi offerings.

The Rollup: Zama has been introducing confidential DeFi for some time now; today’s release is significant because it marks the "scaling of confidential DeFi." What does "scaling" mean here?

When we launched our first private vault with Steakhouse and Morpho in June, we didn’t expect it to gain so much momentum. Its TVL surged to $40 million, making it one of the top ten USDC vaults on Morpho. Seeing this result, we realized: people truly value privacy when using vaults and earning yield with their assets.

Today, we’re launching 15 new vaults covering five assets: Confidential USDC, USDT, AUSD, tGBP, and WBTC. You can now truly encrypt your Bitcoin. This isn’t a joke—you can encrypt your Bitcoin and earn yield on it. We also have five partners curating these strategies: Steakhouse continues to work closely with us, alongside Flowdesk, Rockaway, Bitwise, and Armitage. Some of these vaults are exclusive to Zama and accessible only by depositing confidential assets.

The real challenge isn't that vaults are increasing, but how assets are transferred between them.

The Rollup: You previously focused on narrow, deep liquidity in a few vaults, and now you're expanding your breadth. How do you view the balance between fragmentation and composability within the vault ecosystem?

I don’t think multiple vaults create significant fragmentation issues. The real challenge is enabling people to exchange between assets, moving from one vault to another. That’s the second thing we’re launching today: a confidential swap protocol, with Flowdesk as the first market maker to quote on it. This means you can take your confidential USDC, confidentially swap it for WBTC, and then deposit that BTC into a vault.

You can now move assets horizontally between vaults without ever decrypting or disclosing how much you’ve shifted between strategies. Think for a second about what that means—it’s a big deal. You’re not just depositing privately; you’re privately managing an entire portfolio.

Institutions don't want to hold balances—they want to avoid being front-run.

The Rollup: When it launched in June, this was still experimental, but you’ve seen significant adoption and early signs of product-market fit. Now you’re beginning to refer to confidential DeFi as a category—what convinced you that the market truly needs it?

Very simple. We’ve spoken with multiple curators, institutions, and investors, and everyone said the same thing: if you want to move trillions of dollars on-chain, you need privacy.

Institutional adoption of crypto is hindered partly by regulation and partly by lack of privacy. Moving $100 on-chain has little impact on market prices. But if you move $10 million, $100 million, or even $1 billion, the market reacts—and not just passively; it actively front-runs you.

The more money a person manages, the more essential privacy becomes—not just because they want to hide their balance, but because they want better trade execution. This is exactly the problem we’re solving.

You’ll realize that treasuries will become extremely large, and institutional-grade on-chain RFQ and OTC volumes will also be enormous. Our vision is that the future won’t consist of just 15 or 16 treasuries, but millions of treasuries and tens of thousands of assets, including tokenized stocks and tokenized RWA. We want you to be able to encrypt, hold, exchange, and earn yield on all these assets without leaving your chain.

Once the strategy rules are made public, performance fees can no longer be collected.

The Rollup: As vault products expand, they shift from relatively passive products to more actively managed strategies, with assets being traded and moved between positions, sending far more signals to the market. Is this the right perspective for understanding why privacy is becoming increasingly important for vaults?

Yes. There are actually two types of roles in the vault: curators, who define and curate strategies, and LPs, who deposit funds to earn returns.

Today, vaults are still primarily collateralized lending vaults or RWA vaults, but I believe this is about to change. We will see an increasing number of programmatic strategy vaults. For example, you could have an AI agent automatically manage a vault that trades and provides exposure to a basket of tokenized stocks. This can be fully automated—there’s no need for manual management; it can be driven by rule-based systems or bots.

But if the rules in your vault are public, why would anyone pay you a performance fee? They could just copy them themselves. That’s why privacy isn’t just for investors depositing into the vault to earn returns—it’s also for curators who want to offer competitive strategies without giving up their “secret sauce,” while still maintaining on-chain, programmatic, automated, and verifiable operations. That’s what we provide.

Confidential liquidity has network effects, making this a winner-takes-all market.

The Rollup: We often say that once a dollar is on-chain, it tends to stay on-chain. Similarly, once a dollar becomes private on-chain, it may also tend to remain private. As the scale of on-chain private assets grows, how do you view the network effects here?

There is a massive network effect in privacy, just like with most DeFi protocols. The more liquidity you encrypt within your protocol, the stronger the privacy becomes for users, because there are more participants and more people in the ecosystem. This is the liquidity network effect. Whoever can deepest the liquidity in their privacy protocol—by offering multiple yield-generating vaults and deep liquidity to support private swaps—will provide more competitive execution than public DEXs. The first to build and scale it will win.

This will be a winner-takes-all market.

You have to see this as the convergence of two trends. First, do you believe finance is going on-chain? If we agree that tens of trillions of dollars will move on-chain, and that protocols benefit from network effects around liquidity, then it follows that as finance goes on-chain, a few key players will capture the majority of activity. That’s my goal. If we’re only able to operate at a very small scale, then starting a crypto company and doing what we’re doing today would be meaningless.

Go big or go home.

The vault itself is an asset class, and millions will exist in the future.

The Rollup: As tokenized assets move on-chain, which area do you think is most likely to be disrupted at the intersection of privacy technology and tokenization?

You can almost treat the vault itself as an asset class. That’s my assessment of the vault.

Today, when you go to the bank—whether for Zama’s treasury management or for yourself—you might tell your relationship manager, “I’d like to generate some yield on my U.S. dollars or other assets I hold.” They might respond, “Our bank has designed a product that lets you earn 7% through a long-short equity strategy.” Consider how much time and effort the bank invested to create perhaps only dozens of products available to clients. On-chain, this is just a few lines of code in a smart contract.

And it doesn’t stop there—these components are composable. In the traditional financial world, you can’t combine the strategy from Bank A with the strategy from Bank B; they are two separate, isolated products. But on-chain, if both are vaults, they are programmable and composable. Anyone can deploy a strategy and build meta-strategies on top of others’ strategies.

Think about how many potential revenue streams we could have once this gets underway. I believe we’ll have millions of treasuries, each offering different types of exposure through RWA, equities, crypto assets, stablecoins, and other assets. What’s truly exciting is the treasuries.

The moat is not FHE itself, but rather integration, programmability, and compliance.

The Rollup: If these strategies can increasingly be expressed as smart contracts, why don't banks, ETF issuers, and other traditional financial institutions simply build their own vault stack? What advantage has Zama established with Confidential Vaults, Morpho, and other partners?

There are a few points.

There are many privacy technologies, and almost every day I see someone tweet that they’ve created something better than Zama. Let me be clear: if someone truly develops something better than us, we’ll draw inspiration from it and move forward. I’m very pragmatic—I only want the best technology to solve a specific problem: how to scale finance on-chain. Today, I believe that technology is FHE. If someone invents something better tomorrow, I’ll use that instead.

Under this premise, the technology itself is less important than the products and frameworks you build around it. You need deep integration: you want wallets to support it, custodians to support it, and DeFi protocols to support it. Zama already has a broad integration footprint—for example, we just announced that Utila is integrating Zama, enabling anyone using the Utila wallet framework to access confidential assets, and Zerion is also integrating. I won’t disclose too many details, but other major players are also integrating with us. Integration comes first: making confidentiality available everywhere through the tools people are already using today.

Second is programmability. What makes FHE unique is that you can write any program you want on top of encrypted on-chain states. Confidential DeFi can achieve the same composability as traditional DeFi—an advantage exclusive to FHE and Zama.

Finally, there is compliance. Precisely because of this programmability, we can encode compliance and disclosure rules directly into smart contracts. We can check off all the boxes needed to build compliant, programmable finance on-chain. Put it all together, and you’ll find that today, very few technologies can accomplish all of this the way we do.

From FHE Research to On-Chain Finance: Gas Fees Are a Terrible Business Model

The Rollup: Zama started with FHE as a research primitive and gradually built financial applications on top of it. How did this evolution occur?

This is an iterative process. Today, my judgment is that the treasury will be extremely large and institutional OTC on-chain will be extremely large, but that’s not how we started.

When we founded Zama a few years ago, our idea was: “We want to make FHE truly usable because we believe this technology is important. Along the way, we’ll talk to a thousand companies to see who is actually willing to pay for it.” We looked into confidential AI, confidential databases, confidential medical research, and confidential blockchains—and ultimately found that blockchain was the real opportunity, because on a blockchain, everything runs on a public network.

It was only when we realized that Zama could build HTTPS for Ethereum and Solana—enabling private transactions on these public global networks, just as you can privately shop on Amazon or use ChatGPT over the internet today—that we understood we might be solving a real problem. This is the first step: becoming a blockchain company that builds HTTPS for blockchains.

Then let’s look at the business model. We could have charged gas fees for confidential computing, but gas fees are trending to zero, and infrastructure costs are also trending to zero. Unless you process a billion transactions per day and charge tiny fees on each, you won’t make much money—especially when your customers are institutions that transact infrequently but with very large amounts. Gas fees are a poor business model. We realized we needed to build value where it’s truly created and find ways to monetize the value we deliver to end customers.

That’s finance: confidential exchanges, confidential vaults, confidential payments. Today, although we still have about 40 Ph.D.s and remain a company heavily focused on R&D, I believe we can say we are primarily an on-chain financial protocol using FHE to solve the problem institutions face today: on-chain privacy.

All protocol fees are used for two purposes: subsidizing TVL and repurchasing and burning.

The Rollup: Zama has a public token. If gas fees are not the right monetization strategy, what do you think is the correct model for an on-chain financial protocol? How do you view Zama’s token value capture?

When you look at Web2 finance or fintech, there aren't a million scalable revenue models. One is subscription-based, where you charge a monthly fee. Another is taking a cut of the transaction flow, whether it's payments, exchanges, or custody—essentially a percentage-based fee model.

But to achieve this, the value you deliver to your end users must exceed the fees they pay you. Here, it’s simple: if you perform confidential swaps on-chain, there is no MEV and no front-running. Even after accounting for protocol fees, the execution price you receive from a confidential swap may be better than what you’d get on a public DEX subject to MEV and slippage. Only such models can generate scalable revenue.

I also believe that product-market fit isn’t something you test for—it’s something you know when it happens. You’ll see people actively using your protocol, even if it’s imperfect, features are missing, or it’s still very early—and they’re genuinely excited to use it. That’s when you know you’ve caught onto something.

The next question is: How do I turn early user feedback into a $100 billion protocol?

It’s simple for us. The 100% of fees collected by the Zama protocol—covering payment fees, exchange fees, curator revenue shares, and stablecoin yield rebates—are allocated to two purposes. First, to subsidize protocol adoption, such as offering incentives to attract TVL into treasuries that ultimately generate exchange fees. Second, to repurchase and burn ZAMA tokens.

My current thinking is that we should aggressively spend to acquire TVL. Protocol liquidity exhibits network effects. If we can bring TVL into our protocol faster than competitors can into theirs, we build a real moat—and only then should we consider scaling buybacks and burns. Spending $10 million on buybacks and burns today makes no sense if that same $10 million could generate $100 million in buybacks and burns a few years from now. We shouldn’t ask how much we burn tomorrow; we should ask how much we can burn over four years. That’s the game.

Curators are willing to endorse because their LPs are requesting privacy.

The Rollup: What convinced these curators to stake their names on confidential yields? How do you view the evolution of Zama’s relationship with these curators?

There are a few points.

First, these curators are highly innovative and eager to try new things—and this is something new. Second, their LPs are requesting privacy, as their own clients have genuine privacy needs.

What truly changed the narrative was when we launched our first vault with Steakhouse and Morpho. By the way, thank you to Steakhouse for trusting us and being the first. When that vault became one of the top ten USDC vaults on Morpho, people started paying closer attention. They began to think: maybe this isn’t just marketing—maybe there’s truly a demand for privacy in vaults.

We will keep rolling this snowball, aiming for exponential growth in TVL. Ultimately, we want every financial transaction, every payment, every deposit to custody, and every exchange on-chain to be encrypted with Zama.

The Rollup: After today's release, what would you like users to try?

I encourage everyone to try depositing and exchanging. See how familiar the experience feels—and how different it is on-chain.