From January 21, 2026, 16:00 to January 24, Zama Protocol token public Dutch auction will commence, drawing dual attention from the market on privacy bidding and price discovery mechanisms. This sale adopts a sealed bidding Dutch auction model based on Fully Homomorphic Encryption (FHE), contrasting sharply with traditional fully public bidding, where participants can "bid up or down" against each other: the bidding prices are invisible to others during the auction, shifting the information advantage from public games to independent valuation judgments. Officially provided single-source information indicates that the total supply of ZAMA tokens is 11 billion, of which 8% is for public sale, with a FDV (Fully Diluted Valuation) floor price set at approximately $55 million, and a minimum participation amount of $100 USDT. This signals that the team is releasing a message of "no price undercutting" in terms of valuation while lowering the participation threshold to a more accessible range. This article will dissect this highly experimental on-chain auction from several dimensions: current status and data, auction mechanism, advantages of FHE technology, valuation and liquidity risks, and subsequent key timelines.

$55 Million Floor Price Opening: What Story Does This Auction Want to Tell?

Zama is positioned as a crypto privacy infrastructure protocol built around fully homomorphic encryption technology, with its mainnet already launched and supporting staking functions, having completed a critical leap from white paper to usable network before the token issuance. Choosing to launch a public Dutch auction for the token at a stage where the mainnet is operational and the staking mechanism is in place somewhat shifts the path of "product first, token later" into the privacy and infrastructure track, using the operational network as a valuation anchor, thereby weakening the common narrative and reality misalignment issues seen in purely conceptual projects. In terms of issuance parameters, the total supply of ZAMA is 11 billion tokens, with 8% to be released through this public sale, and a 100% unlock at the TGE on February 2, 2026, without adopting the common linear unlocking or long-term vesting mechanisms. Combined with the FDV floor price of approximately $55 million, this design provides the market with a clear initial valuation range while opting for an aggressive style of "giving enough at once" in terms of circulation structure, pushing short-term price discovery and liquidity pressure to the forefront from the very beginning. The minimum participation threshold of $100 USDT sends a clear signal in terms of pricing and audience: on one hand, it indicates that the team is not deliberately lowering the valuation to pursue "flash sale" hype, while on the other hand, it remains friendly to small and medium participants, allowing for both institutional and professional participants to engage in the auction while also keeping a window open for retail investors. Foresight emphasized in its commentary that the FDV floor price of approximately $55 million reflects the team's cautious attitude towards valuation, resonating with the current sentiment in primary and secondary markets, which is generally more restrained towards high-valuation early projects: after experiencing significant corrections in the last round of high-valuation projects, the market is now more focused on sustainable revenue, real use cases, and long-term token economics, rather than the fundraising scale and short-term performance during a single sale.

Sealed Bidding Dutch Auction Price Game

Traditional Dutch auctions typically follow a relatively intuitive process: the auctioneer sets a high starting price, which is then gradually lowered at a predetermined pace until buyers begin to purchase in large quantities at a certain price level, with the final uniform transaction price determined by the price that exactly matches the predetermined sales quantity. Throughout this process, bid prices, order book depth, and subscription progress are highly visible, allowing participants to adjust their strategies based on others' bidding behavior, forming a dynamic price discovery akin to "public shouting." Zama introduces a variant of the sealed bidding Dutch auction, where, according to public information, bids submitted by participants during the auction are invisible to others until the end, with the auction system performing internal aggregation and sorting to ultimately derive a uniform clearing price and distribution result. In other words, from the bidding to the announcement of results, there is no information exchange between participants, and they cannot "test the waters" or act based on observing others' orders. In such a sealed environment, the bidding logic of participants changes significantly, shifting from "watching and following" to "independent valuation": they need to provide what they believe to be a reasonable and allocatable psychological price based on their judgment of Zama's technology, track, and overall market environment, rather than waiting for market consensus to form before following. For public sales, this mechanism may compress excessive speculation in the short term, as speculators find it difficult to gauge the rhythm through immediate subscription heat, while also amplifying price uncertainty at the moment results are announced, as the lack of a transparent demand curve during the auction phase makes it hard for the secondary market to form relatively stable expectations before the TGE. For retail participants, this experience may be fairer, as they are no longer at a disadvantage being crushed by "market information" and high-frequency strategies, but it also means they need to make independent judgments in an environment of incomplete information and invisible bids, with the deviation between the clearing price after the auction and their personal psychological price becoming a key observation point for whether this mechanism can be widely accepted.

Privacy Paradigm After Fully Homomorphic Encryption Comes Into Play

The core feature of Fully Homomorphic Encryption (FHE) is that even when data exists in an encrypted state, the system can still perform calculations and logical operations on it without decrypting it. To put it simply, traditional encryption is like locking data in a safe, which must be opened to access it; whereas FHE allows for addition and subtraction, as well as more complex program logic, to be completed without opening the safe, with external observers only able to see "the box is being computed" without peeking inside. In this auction, Zama applies FHE to the bidding process, strictly separating the three steps of "encrypted submission of bid prices and quantities," "aggregation and sorting operations in encrypted state," and "decryption and settlement of final public results": bidders encrypt their bids on the client side, while aggregation and comparison operations on the encrypted bidding data are executed on-chain or in the backend, with the clearing price and actual distribution for each account decrypted only after the auction ends. As a result, even from the perspective of nodes executing calculations or third parties participating in verification, all bidding instructions remain unreadable ciphertext, reducing the probability of information being leaked in advance or exploited by specific entities. Some media have commented that "Zama's FHE technology will redefine the privacy standards for on-chain bidding," reflecting not just the heat of a single auction, but a re-examination of the value of privacy in on-chain fundraising activities: under traditional models, the bidding behavior of large addresses is often quickly captured and disseminated by on-chain analysis tools, which can then inversely affect retail expectations and institutional strategies. However, in the sealed auction empowered by FHE, such "whale behavior signals" are effectively obscured during the process, only presented in the form of distribution quantities and clearing prices at the results level. More importantly, this is a large-scale application attempt of FHE technology in a high-attention scenario of token issuance. If this experiment receives positive validation in terms of security, usability, and market feedback, future applications in privacy bidding within DeFi protocols, MEV hedging, or more complex on-chain auctions and governance voting may reference this model, introducing a higher level of process privacy protection without sacrificing transparent outcomes.

Valuation Space and Liquidity Tension

Looking back at the issuance parameters, the FDV floor price of approximately $55 million and the 8% public offering ratio can roughly outline the fundraising and circulation structure implied by this auction. Based on single-source information, this FDV floor price means that, assuming the public offering is priced at the floor level in a simplified scenario, the valuation anchor for the public offering portion corresponds to about 8% of the total supply, and the market will extrapolate a clearly defined starting point but with unknown upward potential for the pricing range. Meanwhile, ZAMA has chosen to 100% unlock the public offering share at the TGE on February 2, 2026, rather than adopting multiple batches of linear unlocking or cliff vesting, which has obvious implications for short-term liquidity and potential selling pressure: on one hand, ample tradable tokens facilitate the rapid formation of a relatively complete order book and price curve in the secondary market, reducing extreme slippage caused by circulation scarcity; on the other hand, the lack of a gradually released "buffer zone" may trigger more concentrated and intense buying and selling behavior when prices deviate from participants' psychological expectations. Compared to the common "low circulation, high FDV, long unlocking" model, Zama's choice is closer to a strategy of "high circulation, clear floor price, short token pressure release period," concentrating the pressure of price discovery within a shorter time window. From the perspective of the track, privacy and infrastructure projects have historically seen both significant premium star cases and phases of severe discounting during valuation re-evaluations. Given the current limited information, it is difficult to assert that Zama will receive systemic premiums or discounts solely based on the floor price and public offering ratio; it can only be pointed out that its position in the FHE track is still in the early application stage, and expectations for technology adoption will be highly tied to token valuation. It is particularly important to note that key information such as FDV floor price, public sale ratio, and TGE unlocking arrangements currently mainly comes from single-source disclosures, lacking multi-party cross-validation. Readers should fully recognize this uncertainty when assessing valuation space or formulating trading plans, avoiding treating any single parameter as a foregone conclusion or complete valuation basis.

Participation Layering Through CoinList and Proprietary Applications

In terms of participation path design, according to single-source information, this auction will simultaneously be conducted through CoinList and Zama's proprietary application, guiding users with different preferences into the same price game. For many crypto users who have participated in past public sales, CoinList is already a familiar entry point, with its relatively mature KYC process, fiat and mainstream asset access capabilities, and adaptation to compliance requirements in specific jurisdictions, allowing it to gather a user structure with a certain level of risk recognition and capital volume in previous public sales. This "historical accumulation" is expected to continue influencing the distribution of final tokens in terms of geography and capital volume in this auction. Zama's proprietary application, on the other hand, is more of a technology and product-oriented entry point, likely attracting technical users and community participants who are already interested in the FHE track and have some understanding of Zama's mainnet and toolchain, as they are more inclined to provide bids based on their long-term outlook for the protocol. The parallel design of the dual channels will also create a misalignment in compliance and participation convenience: CoinList typically has stricter entry screening and KYC requirements for users from certain regions but provides a relatively familiar fiat entry and unified interface; the proprietary application may have more flexibility in geographic coverage but requires higher self-custody capabilities and familiarity with on-chain interactions from users. In this landscape, who is more likely to acquire more tokens will no longer just be a function of capital scale, but also depend on the depth of understanding and operational proficiency of users from different channels regarding the privacy bidding mechanism. The combination of privacy bidding and centralized platforms is also quietly reshaping the distribution of information and channel advantages: even though CoinList serves as a centralized traffic entry, the specific bidding information of individual participants during the auction is still shielded by the FHE layer, significantly compressing the strategy space that traditionally relied on "observing large players' behavior" for following or hedging, narrowing the information gap between channel providers and individuals, with advantages returning more to the understanding of rules and assessment of project value.

Observational Coordinates from Auction Experiment to Long-term Pricing

Overall, Zama's public token sale adds a rare experimental flavor across three dimensions: on the technical side, it introduces Fully Homomorphic Encryption (FHE), placing the bidding process entirely under encrypted computation; on the mechanism side, it adopts a sealed bidding Dutch auction model, altering the behavioral game path of traditional public bidding; and in terms of issuance parameters, it sets a FDV floor price of approximately $55 million, an 8% public offering ratio, and a structure where 100% of the public offering share is unlocked at the TGE, providing a pricing anchor while front-loading short-term liquidity pressure. However, these innovations also come with significant concerns that cannot be ignored: the performance limits of FHE in high-concurrency scenarios, the risk of price expectation deviations in a sealed environment, and the concentrated release of selling pressure due to the one-time unlock will all be tested by the market in the upcoming time window. It is important to emphasize that there is currently no reliable data to support predictions regarding the actual number of participants, final fundraising amount, and specific pricing performance in the secondary market for this auction, and relevant information will only be gradually disclosed after the auction ends and before the TGE. Therefore, any predictions regarding these variables should be regarded as highly uncertain speculations and will not be extended within the framework of this article. On the timeline, the auction period from January 21 to 24 (UTC+8) will complete the sealed bidding and price discovery, while the TGE on February 2 will be a key node reflecting the opening of circulation and concentrated market reactions. Given that there is no additional lock-up period for the public offering portion, there is a possibility of exceeding expectations in terms of short-term price volatility and rhythm. For participants hoping to extract reusable experiences from this auction, two indicators can be focused on: first, the premium level of the final clearing price relative to the FDV floor price of approximately $55 million, which will help observe the market's risk compensation requirements for the FHE privacy track and the Zama project itself; second, whether more public sales or DeFi protocols will actively replicate on-chain bidding privacy solutions after this attempt. If privacy protection gradually evolves from being an "added bonus" to a "default configuration," the significance of Zama's auction will extend beyond the valuation of a single project, marking a starting point for privacy technology to enter the context of mainstream financial infrastructure.

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