Zama Runs First FHE-Encrypted Token Sale

What makes Zama's token sale different from every other crypto launch in 2026? The bids are encrypted using the same technology the project sells.

Zama, an open-source cryptography company focused on Fully Homomorphic Encryption (FHE), is distributing 12% of its native $ZAMA token through a sealed-bid Dutch auction starting January 21, just one week away. The auction runs directly on Ethereum, with all bids encrypted until the sale clears. No one sees what anyone else bid until it's over.

What Is Fully Homomorphic Encryption?

FHE enables computation on encrypted data without first decrypting it. Think of it as performing calculations without ever seeing the actual numbers. The result stays encrypted until the owner decides to reveal it.

For blockchain, this means confidential smart contracts, private transactions, and secure on-chain applications that remain fully verifiable. Zama calls it "HTTPS for blockchain." The company raised over $130 million and reached unicorn status in mid-2025. Its Zama Protocol works as a confidentiality layer for existing Layer 1 and Layer 2 chains.

How Does the Auction Work?

The sealed-bid Dutch auction eliminates front-running, bot sniping, and gas wars. Every successful bidder pays the same clearing price, which is the lowest price at which all tokens sell out.

The 12% public allocation breaks down as follows:

8% (880 million tokens) goes through the main auction. 2% is reserved for holders of Zama OG NFTs at the floor price, capped at 40,000 tokens per NFT, plus a potential 5% bonus. The remaining 2% is sold post-auction at the clearing price, subject to per-participant caps.

Floor price sits at $0.005 per token. With a total supply of 11 billion tokens, that puts the minimum fully diluted valuation at $55 million. There's no upper cap on bids. The minimum bid is $100 in USDT or an equivalent amount of confidential stablecoins.

Where Can You Participate?

Bids go through Zama's auction platform at auction.zama.org or through CoinList's first-ever fully on-chain, non-custodial sale. CoinList acts as an additional gateway, not a separate round. Both channels feed into the same unified auction.

The main auction window opens January 21 at 8am UTC and closes January 24 at 8pm UTC. Tokens should be 100% unlocked and claimable on February 2, 2026. Some bonuses up to 10% are available for specific wallets, referral codes, or OG NFT holders.

What Does $ZAMA Actually Do?

The token powers the Zama Protocol's economic model. Holders use $ZAMA to pay fees for encryption, decryption, and homomorphic computations. They can stake or delegate to network operators who run FHE coprocessors and key management systems.

The protocol uses a mint-and-burn model. Users pay fees in $ZAMA, which get burned. New tokens are minted to reward operators who secure the network.

Why the Interest?

The $55 million floor FDV looks modest compared to many 2025-2026 launches. Combined with institutional demand for programmable privacy in areas such as confidential real-world assets, dark pools, and encrypted settlements, the setup has sparked active community discussion. Polymarket already has predictions running on where the clearing price lands.

For more information, visit the official website at zama.org or follow @zama on X.

Sources:

• Zama - Official company website with protocol documentation and technology overview.
• CoinList Zama Sale - Official auction participation page and registration details.
• Zama Auction Platform - Direct on-chain auction interface.