Zama buys TokenOps to encrypt token distributions

Paris-based cryptography company Zama has acquired TokenOps, a token distribution platform that has handled more than $2 billion in onchain releases, in a move aimed at encrypting institutional token vesting, airdrops, and cap table operations.

The deal is designed to turn traditionally transparent token unlocks into encrypted events, limiting advance visibility into allocations and schedules that can drive short-term selling pressure across digital asset markets.

Targeting drawdowns after transparent token releases

Zama cited data from market maker Keyrock showing that about 90% of tokens underperform the broader market within 30 days of transparent release events. Average drawdowns reach roughly 17% within 72 hours after large supply increases, according to the firm.

The company’s strategy is to address those exposure costs by encrypting the full token lifecycle using the ERC-7984 confidential token standard. Under the model, allocations, recipient details, and release schedules are processed onchain but remain private, even as smart contracts execute on the encrypted data.

The goal is to shift token unlocks from market-moving, trackable events into largely neutral onchain operations, reducing opportunities for preemptive selling.

Live deployments with major institutions

Zama said the underlying technology has already been deployed in production.

Institutional real-world asset protocol KAIO is using the encrypted distribution system for partners including BlackRock, Hamilton Lane, and Brevan Howard. The structure was built by WebN Group and Nomura’s Laser Digital and is in active use for Zama’s own token distributions on Ethereum via TokenOps’ confidential vesting platform.

These deployments are intended to demonstrate that large financial institutions can manage token lifecycles without exposing sensitive information such as strategic allocations or vesting timelines to the wider market.

TokenOps to remain independent, retain cross-chain tools

Following the acquisition, TokenOps will continue operating independently and will keep its existing cross-chain infrastructure.

Zama said it intends to extend “confidential lifecycle” tools across a broader base of token issuers in the coming months, framing the purchase as part of a broader push to bring privacy-focused mechanisms into institutional blockchain environments.

Funding background and token launch

Zama previously raised $57 million in a Series B funding round led by Pantera Capital and Blockchange at a $1 billion valuation in June 2025.

The firm launched its ZAMA token in February 2026 after a sale that established a $55 million floor fully diluted valuation. At launch, more than $121 million in assets were shielded on Ethereum using Zama’s technology.

Response to mounting token unlock pressures

The acquisition comes as the market faces a heavy calendar of new token supply. More than $770 million worth of tokens are scheduled to unlock in the third week of May 2026 alone, according to data cited by Zama.

Research referenced by the company indicates that nearly 90% of tokens lag the market following such events, while recent analysis for this month points to average price drops of roughly 16% within 72 hours after major unlocks.

Attention has focused on the upcoming Pyth Network unlock, which will release around 2.13 billion tokens. The event has been cited as an example of the supply pressure Zama and TokenOps aim to mitigate through encrypted releases.

How fully homomorphic encryption changes token mechanics

The combined platform applies fully homomorphic encryption (FHE), a technology that allows smart contracts to perform computations directly on encrypted data without decrypting it.

In practice, this means:

• token allocations, vesting schedules, and recipient lists are encrypted onchain
• smart contracts can enforce vesting or airdrop rules while underlying details remain hidden
• market participants cannot easily track upcoming unlock size or timing from public data

This framework underpins the ERC-7984 confidential token standard used by the new system. Zama argues that by obscuring supply-side signals, encrypted releases can reduce short-term volatility and prevent opportunistic trading around predictable unlock events.

Market implications for token releases

For traders, the rise of confidential token standards sets up a contrast between:

• transparent token events, where onchain data can telegraph large unlocks and drive anticipatory selling
• encrypted token events, where supply enters the market without clear, advance public visibility into exact allocations or schedules

As billions of dollars in tokens come to market this month, the performance of projects using encrypted infrastructure will offer an early test of whether concealing detailed supply data can meaningfully dampen post-unlock price swings.

Zama positions the TokenOps acquisition as a direct technological response to that challenge, aiming to embed privacy at the core of institutional token lifecycle management.