Zama Expands Confidential DeFi Access with 16 New Vaults on Morpho Protocol

Onchain confidentiality protocol Zama has significantly expanded its offerings, launching 16 new private yield vaults on the Morpho protocol in a move designed to attract institutional capital to decentralized finance (DeFi). The expansion, announced Thursday, involves partnerships with five major curators, including Steakhouse Financial, Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise.

A Major Expansion for Private Yield

This launch builds on a successful pilot in June 2026, where a single confidential vault grew to $40 million in total value locked (TVL) within seven weeks, according to the company. The new initiative introduces a much broader range of investment options.

Key details of the expansion include:

• 16 new confidential vaults: These are split into 12 "Hybrid" vaults, which provide private entry to existing public strategies, and 4 "Exclusive" vaults, which are entirely new and confidential-only.
• Five asset classes: Investors can now deposit USDC, USDT, WBTC, AUSD, and TGBP.
• Zama Swap Protocol: A new protocol was also launched, allowing users to confidentially swap between their private positions within the Zama ecosystem.

"When we launched the first confidential USDC vault with Morpho and Steakhouse in June, we proved that confidentiality and DeFi are not mutually exclusive," said Dr. Rand Hindi, Co-founder and CEO of Zama. "Today’s expansion is proof of the model at scale."

Addressing Institutional Barriers to DeFi

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The core challenge Zama aims to solve is the inherent transparency of public blockchains, where all transactions and holdings are publicly visible. This lack of privacy is a significant deterrent for institutional investors, corporate treasuries, and active traders who need to protect their strategies from competitors and front-runners.

By using Fully Homomorphic Encryption (FHE), Zama creates a privacy layer that allows users to interact with DeFi protocols without disclosing their positions or balances. Merlin Egalite, Co-founder of Morpho, noted that adding these vaults was an "important step" to scale confidential DeFi and "open new possibilities for allocators onchain, without changing the strategy, the liquidity, or the risk profile."

Market Impact and Ecosystem Growth

This development signifies a maturing of the DeFi infrastructure to meet the operational security needs of sophisticated financial players. Rather than creating a separate ecosystem, Zama's technology integrates with established protocols like Morpho, allowing institutions to access existing liquidity pools privately.

Distribution will be expanded through integrations with platforms like Utila, Zerion Wallet, and Yield.xyz in the coming weeks. "Confidentiality should not require institutions to abandon the platforms they already use," said Serafin Lion Engel, Co-Founder and CEO at Yield.xyz. The company stated this expansion serves as an operational blueprint for further growth in 2026 and 2027.