Zama expands confidential Morpho lineup after first vault hits $40 million, launches private swaps on Ethereum

Onchain confidentiality protocol Zama (ZAMA) is opening deposits into 16 confidential vaults on Morpho on Sept. 15 across assets including USDC, USDT, AUSD, and TGBP.

Its first vault went live in June with Morpho and Steakhouse Financial. Zama said that product, which uses Steakhouse's USDC Prime strategy, went from zero to $40 million in total value locked (TVL) within seven weeks.

According to a statement shared exclusively with The Block, Steakhouse will curate some of the 16 vaults, while Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise will also serve as curators.

Users get confidential access to 12 existing Morpho vaults on Ethereum that already have non-confidential equivalents, while the other four have been specifically built for confidential deposits.

"On public blockchains, positions, balances, and strategies are visible to competitors and front-runners, a structural blocker to institutional deployment at scale," Zama explained. "By expanding the range of curated confidential vaults and adding four new asset classes as deposit assets, Zama enables institutional allocators, corporate treasuries, and active market participants to access diversified onchain yield without disclosing their holdings or strategies."

Confidential swaps on Ethereum

Alongside the vaults, the project is also launching the Zama Swap Protocol, allowing depositors to swap between confidential assets on Ethereum. It covers cUSDC, cUSDT, cAUSD, and cTGBP, along with shares in the confidential vaults. Zama said users can swap those assets and positions without disclosing the size of the transaction or their intent.

"Institutions have increasingly been exploring how onchain capital allocation can be made more confidential to fit their requirements," Morpho co-founder Merlin Egalite said. "Adding these confidential vaults on Morpho was an important step for us. It'll scale confidential DeFi efficiently and open new possibilities for allocators onchain, without changing the strategy, the liquidity, or the risk profile."

The vaults are going live first through Zama's own app. Utila, Zerion Wallet, and Yield.xyz are due to add them in the coming weeks.

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