Zama is expanding its privacy-focused DeFi offering with deposits opening Sept. 15 for 16 confidential vaults built on Morpho, giving users a way to deposit stablecoins and vault shares without exposing their positions publicly on Ethereum.
The launch extends a model Zama first introduced in June, when it opened a confidential version of a Morpho vault using Steakhouse Financial’s USDC Prime strategy. That vault grew from zero to $40 million in total value locked during its first seven weeks, according to Zama.
The new products cover assets including USDC, USDT, AUSD and TGBP. Twelve of the vaults will wrap existing Morpho vaults in a confidentiality layer, while four have been created exclusively for private deposits. Each wrapped product retains a corresponding public Morpho vault, allowing users to choose whether they want a conventional onchain position or a confidential one.
Private access to established Morpho strategies
Morpho vaults typically direct deposits into lending markets according to parameters set by a curator. In Zama’s design, the underlying strategy, liquidity and risk profile of the public vault are intended to remain the same, while the depositor’s balances and activity are shielded through confidential tokens and vault shares.
Merlin Egalite, co-founder of Morpho, said the expansion preserves the characteristics of the original vaults while adding a privacy layer to onchain allocation.
“By keeping the same strategy, liquidity, and risk profile while making allocation confidential, this is a meaningful step toward scaling confidential DeFi on Morpho,” Egalite said in Zama’s announcement.
That structure could appeal to market participants who use onchain lending strategies but do not want wallet observers, counterparties or competitors to see the size and composition of their deposits. Public Ethereum addresses make holdings and transactions broadly visible, a feature that can complicate treasury management and fund operations when large positions are involved.
The rollout also places Zama’s privacy technology closer to established lending infrastructure rather than limiting it to separate, isolated pools. Users of the wrapped vaults would gain access to existing Morpho strategies, while the four confidential-only products create room for strategies designed around private deposits from the outset.
Curators bring lending-market expertise
Steakhouse Financial will curate some of the new vaults, alongside Armitage by Wintermute, Flowdesk, RockawayX and Bitwise. These firms are expected to set or manage vault configurations and strategies within Morpho’s framework.
Curators play a central role in permissionless lending vaults. They decide which markets a vault can allocate capital to, establish limits and monitor risk parameters. Their involvement gives the confidential vaults access to the same type of specialized strategy management already used across Morpho’s public lending ecosystem.
The expansion from one vault to 16 also changes the product from a single demonstration of confidential lending access into a broader selection of stablecoin-focused options. Depositors will need to assess each vault individually, including its asset exposure, lending-market allocations, curator decisions, liquidity conditions and fee structure. Privacy around a position does not remove the underlying risks of lending, smart contracts or changing borrowing demand.
Zama has not presented the vaults as a uniform yield product. The available strategies will differ according to their underlying Morpho vaults and the curators responsible for their configuration, making the choice of vault more consequential than the confidentiality wrapper alone.
Zama swap protocol adds confidential asset conversions
Alongside the vault launch, Zama is introducing the Zama Swap Protocol on Ethereum. The protocol will support swaps among confidential forms of USDC, USDT, AUSD and TGBP, identified as cUSDC, cUSDT, cAUSD and cTGBP.
The swap tool will also support transfers involving shares in confidential vaults. That gives users a way to move between private stablecoin balances and private vault positions without relying solely on public token transfers.
The combination of private swaps and confidential vault shares addresses a practical limitation of public DeFi: entering a lending strategy, changing assets and exiting a position can reveal a user’s full transaction path. By covering both deposits and asset conversions, Zama is attempting to create a more complete private workflow around Morpho-based lending.
The vaults will initially be available through Zama’s application. Utila, Zerion Wallet and Yield.xyz are scheduled to add access in the following weeks, according to the announcement. Distribution through wallet and portfolio interfaces could make the products easier to reach for users who already manage assets through those platforms, rather than requiring them to use a dedicated privacy application.
A test of demand for private onchain lending
Zama’s first Steakhouse-curated vault provides the clearest early measure of demand. Its rise to $40 million in total value locked within seven weeks showed that users were willing to place capital into a private version of an established lending strategy, though the larger lineup will test whether that interest extends across more assets and curators.
The Sept. 15 release will give users access to a larger menu of confidential stablecoin deposits while preserving links to Morpho’s existing vault architecture. The outcome will depend less on privacy as a standalone feature than on whether the vaults can offer strategies, liquidity and risk management competitive with their public counterparts.
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