Author: Rand , founder of Zama

Compiled by: Tim, PANews

Today, the Zama testnet v2 was officially launched, and the mainnet and token will also be launched soon.

Zama is a cryptographic layer that uses fully homomorphic encryption to enable privacy-focused payments, financial transactions, and other functionalities on top of existing public blockchains. Zama does not create a new L1 or L2 blockchain; rather, it builds upon existing L1 and L2 chains. Just as HTTPS adds an encryption layer to traditional websites, Zama similarly provides cryptographic protection for existing blockchains.

Zama testnet v2 is now live.

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

Over the past few weeks, we've been steadily rolling out testnet version 2, which will serve as a candidate version for our upcoming mainnet launch. The new testnet has the exact same features as the future mainnet, and you can start building and deploying on it now.

Testnet v2 also marks our first fully distributed key generation ceremony, completed in collaboration with the Zama genesis node. This ceremony, lasting approximately 55 hours, generated all the public and private key information required for the Zama testnet. This is the first large-scale application to implement a robust threshold fully homomorphic encryption protocol, representing years of research and development by Zama and months of coordination with partner nodes, and is a significant milestone.

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

Developers are using Zama to build killer apps.

Several apps will be launched on the mainnet in the coming months; here are some examples:

• Zaiffer Protocol supports the conversion of ERC-20 tokens into encrypted ERC-7984 tokens, achieving end-to-end encryption of balances and transaction amounts. These encrypted tokens can be used in the DeFi ecosystem for privacy-focused transactions and other scenarios. Zama's own tokens are also encrypted.
• TokenOps provides crypto companies and foundations with a crypto token distribution solution that enables privacy-focused token allocation to teams, investors, and the community. This distribution solution supports features such as crypto staking and crypto airdrops; Zama is currently using this solution for the distribution and airdrop of its internal crypto tokens.
• Bron Wallet is the first wallet to natively support crypto ERC-7984 tokens. Built by the founders of leading institutional custodian Copper, this highly secure, self-custodied MPC wallet allows you to hold and transfer crypto assets such as crypto stablecoins and other ERC-20 tokens.
• Raycash is a RUG-free self-custody bank. This bank provides secure and private on-chain fund management through crypto stablecoins, while supporting staking, redemption, and off-chain spending via debit cards and IBAN accounts. In Lebanon, several years ago the central bank froze everyone's dollar assets, leading to a significant reduction in national wealth. Using Raycash completely avoids such risks. Raycash was co-founded by serial entrepreneurs Valerio and Tom, with co-founder Mike previously serving as COO of Checkout, a $40 billion payments giant.

The Zama genesis nodes collectively protect over $100 billion in assets.

Zama genesis nodes are selected from over 100 candidates based on three criteria: outstanding operational and development capabilities, extremely high level of cybersecurity practice (e.g., most must meet SOC2 compliance standards), and industry reputation.

In the Web3 space, reputation is not usually a universally accepted factor, but it is crucial in building the economic security foundation of a protocol. When operators or validators publicly identify themselves and run publicly verifiable software, they are not only staking their native tokens, but also their own reputation. If someone cheats in Zama, not only will their staked ZAMA tokens be forfeited, but the value of their business and equity outside the Zama network could also be significantly reduced. This implicit restaking mechanism provides Zama with strong economic security from its launch day—the Zama operator community collectively safeguards over $100 billion in assets and has gained the trust of banks, foundations, and tens of millions of cryptocurrency holders.

Millions spent on security audit

We conducted a comprehensive audit of all components of Zama, including the TFHE-rs cryptographic library, key management system software and protocols, coprocessors, gateways, and all other components. We also reviewed the upcoming ZAMA token, staking, and governance contracts. This audit covered both the cryptographic design and code implementation levels.

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

Furthermore, Zama is the first cryptographic protocol to achieve 128-bit security strength under the strong IND-CPAD security model, meaning it possesses provable security strength and can withstand all known cryptographic attacks. Our fully homomorphic encryption and secure multi-party computation technology remains secure even against quantum computers.

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

ZAMA tokens will be launched simultaneously with the mainnet launch.

ZAMA tokens are the utility native tokens of the Zama protocol, primarily used for paying protocol fees and staking operations. ZAMA tokens employ a burn and mint mechanism, where protocol fees are burned while new tokens are minted to reward network nodes.

The Zama protocol does not charge for computing services; instead, it charges for encryption and decryption operations. These fees are denominated in a fixed amount in US dollars but must be paid using ZAMA tokens. All fees are automatically burned by the protocol. This model aims to allow developers to access the service at a predictable cost, unaffected by market fluctuations.

On the other hand, operating nodes need to stake ZAMA tokens to participate in the protocol's operation and receive corresponding staking rewards. The tokens allocated as staking rewards will be minted according to the release rate, which can be adjusted through the governance mechanism. Token holders can participate in maintaining protocol security by delegating their ZAMA tokens to selected operating nodes.