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Zama Protocol launches on Ethereum mainnet, completing the first confidential USDT transfer using fully homomorphic encryption.
Author: Akshat Thakur
Published On: Wed, 31 Dec 2025 09:20:32 GMT
December 31, 2025 — Zama Protocol Launches Mainnet on Ethereum, marking a major step forward for on-chain privacy. Zama Protocol Launches Mainnet with the first confidential USDT transfer, proving that encrypted, verifiable transactions can operate on public blockchains.
Zama is an open-source cryptography firm focused on bringing Fully Homomorphic Encryption (FHE) to blockchains. Unlike privacy solutions that rely on mixers or separate networks, Zama embeds confidentiality directly into smart contract execution. Its protocol allows computations on encrypted data while preserving public verifiability.
With the mainnet launch, Zama moves privacy from an optional add-on to a native blockchain property. This approach targets use cases such as private payments, encrypted DeFi, and confidential governance. The launch positions Zama as a foundational privacy layer for Web3.
Zama confirmed the first confidential stablecoin transfer on Ethereum using cUSDT, a fully encrypted version of USDT. The transaction executed successfully on December 30, 2025, with the transferred amount remaining encrypted throughout execution. Ethereum validators verified the transaction without accessing sensitive data.
Advanced FHE operations handled conditional logic and balance checks inside encrypted space. Despite the complexity, the transaction consumed under 450,000 gas, resulting in a fee of roughly $0.13. This efficiency marks a key breakthrough for practical on-chain privacy.
FHE allows smart contracts to process encrypted values without ever decrypting them. This differs fundamentally from mixers or zero-knowledge rollups that obscure activity at the network edge. Zama’s approach keeps data confidential while preserving Ethereum’s transparency and composability.
Developers can now build private swaps, encrypted lending markets, and confidential voting systems directly on existing chains. The model also reduces risks from front-running, MEV extraction, and on-chain surveillance. By solving the privacy–transparency trade-off, FHE unlocks new classes of applications.
The launch generated significant attention across the crypto ecosystem, with strong engagement from developers and researchers. Zama’s tooling, including fhEVM and cryptographic coprocessors, lowers the barrier to integrating encrypted logic into smart contracts. Builders can deploy confidential applications without creating isolated ecosystems.
This compatibility strengthens Ethereum’s role as a settlement layer for both public and private computation. Early interest suggests demand beyond retail use cases, particularly from institutions requiring data confidentiality.
Real voices. Real reactions.
@zama Confidential transactions unlock a new era for DeFi 🚀
@zama congrats on your mainnet launch hopefully confidential applications are prioritized moving forward
@zama A landmark moment for onchain privacy. Huge
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