Author: Rand, Founder of Zama

Translation: Tim, PANews

Today, the Zama testnet v2 has officially launched, and the mainnet and tokens are also set to go live soon.

Zama is a cryptographic layer that utilizes fully homomorphic encryption technology to achieve privacy payments, financial, and trading functions on existing public chains. Zama is not creating a new L1 or L2 but is built on top of existing L1 and L2 chains. Just as HTTPS adds an encryption layer to traditional websites, Zama provides encryption protection for existing blockchains.

Zama Testnet v2 is Live

We launched the first testnet in July this year. So far, over 100,000 addresses have participated in testing, completing over 1 million privacy transactions. In the initial days, the Zama testnet even occupied nearly half of the block space on the Sepolia testnet!

In the past few weeks, we have been steadily rolling out the testnet v2 version, which will serve as the candidate version for our upcoming mainnet launch. The new testnet has the same functional features as the future mainnet, and you can start building and deploying on this testnet now.

Testnet v2 also marks our first fully distributed key generation ceremony completed with Zama genesis nodes. This ceremony lasted about 55 hours and generated all the public and private key information required for the Zama testnet. This is the first large-scale application of a robust threshold fully homomorphic encryption protocol, reflecting years of R&D efforts by Zama and months of coordination with partner nodes, marking a significant milestone.

We are about to begin stress testing for testnet v2. After multiple rounds of testing and feedback collection, we will deploy the Zama mainnet test version, which will be the first fully homomorphic encryption protocol put into practical use. Our mainnet will first launch on Ethereum, with versions for other chains to be rolled out in 2026.

Developers are Building Killer Apps with Zama

In the coming months, several applications will launch on the mainnet, here are some examples:

• Zaiffer Protocol supports converting ERC-20 tokens into encrypted ERC-7984 tokens, achieving full encryption of balances and transaction amounts. These encrypted tokens can be used in privacy exchange scenarios within the DeFi ecosystem, and Zama's own tokens are also encrypted.
• TokenOps provides encrypted token distribution solutions for crypto companies and foundations, enabling privacy-focused token allocation to teams, investors, and communities. This distribution solution supports encrypted lock-ups, encrypted airdrops, and Zama is using this solution for the distribution and airdrop of internal encrypted tokens.
• Bron Wallet is the first wallet to natively support encrypted ERC-7984 tokens. As a high-security self-custody MPC wallet created by the founder of leading custodian Copper, Bron supports holding and transferring crypto assets (such as crypto stablecoins and other ERC-20 tokens).
• Raycash is a self-custody bank that prevents rug pulls. This bank enables secure and private on-chain fund management through crypto stablecoins, while also supporting staking, exchanges, and off-chain spending via debit cards and IBAN accounts. In Lebanon, a few years ago, the local central bank froze everyone's dollar assets, leading to a significant loss of wealth. Using Raycash can completely avoid such risks. Raycash was co-founded by serial entrepreneurs Valerio and Tom, with another co-founder Mike previously serving as the COO of the $40 billion payment giant Checkout.

Zama Genesis Nodes Protect Over $100 Billion in Assets

Zama genesis nodes were selected from over 100 candidates based on three criteria: exceptional operational development capabilities, a high level of network security practices (most needing to meet SOC2 compliance standards), and industry reputation.

In the Web3 space, reputation is often not a common consideration, but it is crucial when building the economic security foundation of a protocol. When operators or validators publicly disclose their identities and run verifiable software, they are not only staking native tokens but also staking their own reputations. If someone cheats in Zama, not only will their staked ZAMA tokens be forfeited, but it could also significantly reduce the value of their business and equity outside the Zama network. This implicit re-staking mechanism provides Zama with strong economic security from day one—Zama's operator community collectively safeguards over $100 billion in assets and has earned the trust of banks, foundations, and tens of millions of cryptocurrency holders.

Millions Spent on Security Audits

We have conducted a series of audits on all components of Zama, including the TFHE-rs cryptographic library, key management system software and protocols, co-processors, gateways, and all components, as well as a comprehensive review of the upcoming ZAMA tokens, staking, and governance contracts. This audit work covers both cryptographic design and code implementation.

Overall, this audit involved nearly 70 person-weeks and cost millions of dollars. Through systematic reviews, we identified and fixed all high-risk vulnerabilities in a timely manner. This makes Zama the largest audit project among the first protocols launched in the Web3 industry, and it means that TFHE-rs is the first and only fully homomorphic encryption library in the cryptographic community to undergo professional auditing.

Additionally, Zama is the first cryptographic protocol to achieve 128-bit security strength under a strong IND-CPAD security model, meaning the protocol has provable security strength and can withstand all known cryptographic attacks. The fully homomorphic encryption and secure multi-party computation technologies we have built remain secure even against quantum computers.

This audit work was jointly completed by five authoritative institutions: Trail of Bits, Zenith, Open Zeppelin, Burrasec, and Alexandra Institute.

ZAMA Token Will Launch Alongside the Mainnet

The ZAMA token is the functional native token of the Zama protocol, primarily used for paying protocol fees and staking operations. The ZAMA token adopts a burn-and-mint model, where protocol fees are burned, and new tokens are minted to reward network nodes.

The Zama protocol does not charge for computational services but charges fees for encryption and decryption operations. These fees are fixed in USD but must be paid using ZAMA tokens. All fees will be automatically burned by the protocol. This model aims to allow developers to use services at predictable costs without being affected by market fluctuations.

On the other hand, operational nodes need to stake ZAMA tokens to participate in the protocol's operation and receive corresponding staking rewards. The tokens allocated for staking rewards will be minted based on the release rate, which can be adjusted through governance mechanisms. Token holders can participate in maintaining the protocol's security by delegating their ZAMA tokens to their chosen operational nodes.

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