Zama, an open-source cryptography company pioneering Fully Homomorphic Encryption (FHE), is teaming up with OpenZeppelin to use confidential smart contracts for production.
The protocol by Zama makes sure that, like with ERC-20, balances and transfers are hidden by default, and it does this without losing the benefits of decentralization and composability while keeping sensitive information private.
Why Confidentiality Is the Missing Piece
Institutions will not go on-chain when all the transactions, balances, and counterparties are evident to the general public on the blockchain.
The Zama FHE layer has end-to-end encryption, and what is calculated is done on ciphertext instead of underlying values. It implies that banks, asset managers, and fintechs can have verifiability and auditability on a public ledger without announcing confidential flows and client positions.
OpenZeppelin’s Security Meets Zama’s Cryptography
The contract libraries and audits provided by OpenZeppelin have already secured over 218 billion in digital assets, setting a new standard of security in Web3.
This collaboration of Zama and OpenZeppelin is helping to develop battle-proven frameworks into the backbone of privacy that large companies can rely on.
Developers will be able to implement known patterns: tokens, governance modules, and vaults, but in a cryptographic layer of encryption that promises privacy.
Regulated Finance Worthy of a Production Standard
Confidential smart contracts open up a set of compliant applications: private credit markets, on-chain FX desks, tokenized fund shares, and enterprise settlement rails.
Regulators do continue to receive enforceable rules, with confidentiality of trade sizes and counterparties remaining at the institutional level.
The bottom line is that both platforms are setting the stage for big money to transfer on-chain, and that too securely and secretly.
The Future
This year, Zama will roll out its protocol and tooling. Co-developed SDKs, templates, and audits will accelerate crypto adoption.Â
This partnership has transformed the concept of privacy from being a niche service to becoming the default infrastructure.
