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

Zama, a protocol specializing in on-chain confidentiality, has significantly expanded its services by launching 16 curated yield vaults on the Morpho protocol. This move, announced September 17, aims to provide institutional-grade privacy for decentralized finance (DeFi) investors by shielding their positions and strategies from public view on the Ethereum blockchain.

Major Expansion in Confidential DeFi

The expansion introduces confidential access to five asset classes: USDC, USDT, WBTC, AUSD, and TGBP. Zama has partnered with five leading DeFi curators to manage the vaults: Steakhouse Financial, Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise. This builds upon an initial confidential vault launched in June that grew to $40 million in Total Value Locked (TVL) within seven weeks, demonstrating market demand for such products.

Alongside the new vaults, Zama also launched its Swap Protocol, which allows users to confidentially trade between their private positions. "Today’s expansion is proof of the model at scale," said Dr. Rand Hindi, Co-founder and CEO of Zama. "Sixteen vaults, five curators, five asset classes, all built on the same DeFi infrastructure that sophisticated capital already uses... This is how confidential DeFi becomes a category and not an experiment."

Addressing Institutional Demand for Privacy

A primary barrier to large-scale institutional investment in DeFi is the inherent transparency of public blockchains, which exposes holdings and investment strategies to competitors. By leveraging Fully Homomorphic Encryption (FHE), Zama enables corporate treasuries and other large market participants to access on-chain yield without broadcasting their financial activities.

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Merlin Egalite, Co-founder of Morpho, noted the importance of this development for institutional adoption. “Institutions have increasingly been exploring how onchain capital allocation can be made more confidential to fit their requirements," Egalite stated. "Adding these confidential vaults on Morpho was an important step for us. It’ll scale confidential DeFi efficiently... without changing the strategy, the liquidity, or the risk profile.”

Vault Structure and Market Access

The new offerings are divided into two categories, giving investors distinct options for privacy:

• 12 Hybrid vaults: These provide a confidential entry point to existing, publicly available curated vaults, sharing the same liquidity and strategy.
• 4 Exclusive vaults: These are entirely new, confidential-only vaults with no public equivalent, such as the Wintermute Confidential WBTC vault.

All 16 vaults are deployed on Morpho and are available through the Zama App. The company stated that additional access points, including the Utila and Zerion wallets, will be integrated in the coming weeks, broadening the reach of confidential DeFi to a wider user base.