Zama (ZAMA) was trading at $0.05161 on July 23, 2026, up 25.9% over 24 hours, according to CoinGecko, and ranked third on the platform’s trending list. Its move followed recent attention on other privacy-linked crypto assets, including Zcash, which traded above $500 two weeks earlier, and Zano, which later topped a most-viewed list.

The sequence has placed three privacy-related tokens in focus over three weeks. Zama, however, differs from traditional privacy coins because it is designed as an encryption layer rather than a private currency. That distinction is central to how the project positions itself and how its technology is intended to be used.

What Zama is

Zama is an open-source cryptography company founded around fully homomorphic encryption, or FHE, which it has developed into a blockchain protocol. The project does not present itself as a private coin. Instead, it describes its role as a confidentiality layer that can sit on top of existing blockchains, allowing them to support encrypted transactions and encrypted smart contracts without changing their underlying consensus mechanisms.

The project has compared this approach to HTTPS. The web did not replace HTTP; it added encryption around it, and the encrypted version became the default standard. Zama’s comparable argument is that blockchains can retain their existing architecture while adding confidentiality through an encryption layer.

That positioning matters because most public blockchains expose transaction data by default. Addresses may be pseudonymous, but balances, transfers and contract interactions are visible to anyone using a block explorer or analytics tool. For decentralized finance, governance and enterprise use cases, that transparency can reveal trading activity, treasury movements or voting behavior that users may not want publicly disclosed.

How fully homomorphic encryption works

Fully homomorphic encryption is different from many privacy tools previously used in crypto. Standard encryption protects data while it is stored or transmitted, but to perform useful operations on encrypted data, a system usually has to decrypt it first. That creates a point at which the information is exposed.

FHE is designed to remove that exposure point. It allows computation to be performed directly on encrypted data, producing an encrypted result without decrypting the underlying information during the process. The input remains encrypted, the computation is carried out, and the output is also encrypted. Only the holder of the appropriate key can read the result.

For blockchains, the practical application is confidential smart contracts. Trades, balances, lending positions or governance votes could be settled on a public chain without revealing amounts, strategies or holdings to external observers. Public blockchains have traditionally required a compromise between transparency and privacy. FHE’s core claim is that this trade-off does not have to be permanent.

The main historical limitation has been speed. Fully homomorphic encryption has often been thousands of times slower than ordinary computation, making it more of a laboratory tool than practical infrastructure. Zama’s architecture attempts to address that by moving heavy encrypted computation to specialized off-chain coprocessors that return results to the host blockchain.

The system also uses a decentralized key management service that splits the decryption key across multiple nodes through multi-party computation. Under that model, no single operator can decrypt information alone. Developers can write confidential contracts in Solidity through a library called FHEVM, using encrypted data types while otherwise working with standard code.

Throughput remains a key limitation. Public documentation has described throughput in the range of tens of transactions per second per chain. That may be sufficient for high-value confidential operations, but it is not close to the level needed for consumer-scale usage. Any current assessment of the project depends on verifying updated throughput figures rather than relying on earlier documentation.

Founders and cryptography background

Zama was founded in January 2020 by Dr. Rand Hindi and Pascal Paillier. Paillier is notable in cryptography for inventing the Paillier encryption scheme in 1999, a construction that remains used in billions of smart cards and payment systems.

That academic and technical background is unusual among token projects and is one reason the project has attracted attention from technically focused observers. However, strong cryptographic credentials and token performance are separate outcomes. Crypto markets have repeatedly shown that technical quality alone does not determine how a token performs.

The ZAMA token model

The ZAMA token has two stated functions within the protocol. First, it is used to pay protocol fees, described as private gas. These fees cover the cryptographic costs of verifying encrypted inputs, running FHE computations and managing decryptions. Second, the token is staked through a delegated proof-of-stake system that secures the network and rewards node operators.

The project’s economic design is described as a burn-and-mint model, with total supply reported at 11 billion tokens. Fees paid in ZAMA are burned, while new tokens are minted to reward operators.

The key variable in that design is the relationship between fees burned and rewards minted. If burned fees exceed newly minted rewards, supply contracts and usage accrues to holders. If minting exceeds burning, holders are diluted to subsidize operators, a common outcome in some networks using similar structures. For that reason, the burn-to-mint ratio is more important than headline token supply and should be checked against current on-chain data rather than launch-era documentation.

Another notable design detail is the token distribution process. ZAMA was distributed through a sealed-bid Dutch auction conducted using Zama’s own protocol, meaning bids remained confidential. That made the launch both a distribution mechanism and a public test of the protocol’s confidential infrastructure.

Why privacy-related tokens are in focus

The recent attention around Zama follows moves in other privacy-linked crypto assets. Zcash’s move above $500 earlier this month drew attention to the sector’s flagship asset. Zano then attracted interest last week, and Zama is now appearing on trending lists.

The distinction is that Zcash and Zano are private currencies, while Zama is infrastructure intended to help other applications add privacy. It therefore does not compete for exactly the same use case. Its potential market is based more on institutional confidentiality and application-level encrypted computation than on personal anonymity.

That difference also affects how adoption would be measured. For private currencies, usage can be evaluated through network activity and shielded or private transaction demand. For infrastructure such as Zama, the more relevant indicators are application integrations, encrypted contract activity, private-gas consumption and whether developers use the system for production workloads rather than demonstrations.

Whether market participants are distinguishing between these categories or broadly buying assets associated with privacy is unclear. Rotations in crypto markets often move quickly and may not sharply separate different technical models.

Risks and unresolved questions

Regulatory pressure applies broadly to privacy-related crypto projects. Zama’s programmable-compliance features, in which decryption rules can be defined rather than entirely absent, may give it a different regulatory profile from pure anonymity tools. However, that position has not been tested by any major regulator.

Adoption is the central issue for the project. An encryption layer does not generate meaningful protocol activity unless applications integrate it and users pay private gas. Infrastructure tokens can trade on narrative for long periods even when actual usage remains limited.

Performance is another constraint. Current throughput limits suggest that near-term usage is more suited to high-value operations than mass-market consumer activity.

Token economics also remain important. Depending on the balance between burned fees and newly minted rewards, the model could either accrue value through usage or dilute existing holders.

Rotation risk is immediate as well. ZAMA’s 25.9% one-day move was linked to sector attention rather than a specific project event, and moves driven by rotation can reverse quickly.

Bottom line

Zama is among the more technically credible privacy-related crypto projects to trend this month. It is built around established cryptography, includes a founder associated with an encryption scheme still used in billions of devices, operates live mainnet infrastructure, and has a fee-and-burn token design.

At the same time, it remains an infrastructure project whose value depends on adoption that has not yet been broadly demonstrated. Its 26% move came during a three-week rotation into privacy-related crypto assets rather than from a clearly identified project-specific catalyst.

The main facts to monitor are the state of the technology, the current burn-and-mint balance, actual throughput, private-gas usage, and whether applications integrate the protocol at meaningful scale. This article is for information only and is not investment advice. Crypto assets are extremely volatile, and participants can lose their entire stake.