Zama confidential vaults grow to 16 after $40M pilot success

Zama has rolled out a much larger set of Zama confidential vaults on Morpho, opening deposits into 16 privacy-focused vaults on September 15 and adding a swap tool that lets users trade confidential assets on Ethereum without revealing how much they’re moving or why. The expansion comes just weeks after the project’s first confidential vault, launched with Morpho and Steakhouse Financial, grew from nothing to $40 million in total value locked in only seven weeks — a signal that institutional demand for private onchain yield may be bigger than many assumed.

Key takeaways

• Zama opened deposits into 16 confidential vaults on Morpho on September 15, spanning assets including USDC, USDT, AUSD, and TGBP.
• The pilot vault, built with Steakhouse Financial’s USDC Prime strategy, jumped from zero to $40 million in TVL within seven weeks.
• Steakhouse, Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise are curating the new vault lineup.
• Twelve vaults mirror existing non-confidential Morpho products, while four were built specifically for confidential deposits.
• A new Zama Swap Protocol lets users trade confidential tokens like cUSDC and cUSDT, plus vault shares, on Ethereum without exposing transaction size or intent.

Zama Launches 16 Confidential Vaults on Morpho

Zama is now taking deposits across 16 confidential vaults built on Morpho, with support for USDC, USDT, AUSD, and TGBP as deposit assets. The launch, confirmed in a statement shared with The Block, marks a sharp scale-up from the single pilot vault the project debuted just months earlier.

First vault hits $40 million TVL in seven weeks

That pilot vault went live in June in partnership with Morpho and Steakhouse Financial, using Steakhouse’s USDC Prime strategy. According to Zama, the product went from zero to $40 million in total value locked in just seven weeks — a growth curve that appears to have justified the broader rollout now underway.

Vault assets include USDC, USDT, AUSD, and TGBP

The expanded lineup of Morpho Ethereum vaults covers a wider basket of deposit assets than the original product, adding AUSD and TGBP alongside the stablecoin staples USDC and USDT. That broader asset coverage is meant to give institutional allocators more flexibility in how they park capital confidentially.

Twelve existing vaults with confidential access plus four newly built

Of the 16 vaults, 12 give users confidential access to existing Morpho products that already have non-confidential, publicly visible equivalents. The remaining four were built from the ground up specifically for confidential deposits, meaning they have no public-facing counterpart at all.

Curated Vaults by Leading Institutional Partners

Steakhouse Financial, which curated the original pilot, is now joined by four additional curators overseeing the expanded lineup: Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise. Bringing in established trading and asset-management names to curate the vaults is a deliberate signal to institutional depositors that the strategies behind these confidential DeFi assets are being managed by recognizable players in the space, rather than anonymous or untested operators.

Zama Swap Protocol Enables Confidential Swaps on Ethereum

Alongside the vault expansion, Zama is launching the Zama Swap Protocol, a tool that lets depositors swap between confidential assets directly on Ethereum. It’s a companion piece to the vaults, letting users move value between confidential positions without exposing that activity to onlookers.

Swap confidential assets and vault shares without revealing transaction details

The protocol covers cUSDC, cUSDT, cAUSD, and cTGBP, plus shares in the confidential vaults themselves. Zama said users can execute these swaps without disclosing the size of the transaction or their underlying intent — a feature aimed squarely at traders and treasuries wary of tipping their hand on a public ledger.

Institutional Privacy and Expansion Plans

Why does any of this matter beyond the DeFi crowd? Because visibility has long been one of the biggest structural obstacles keeping large institutional capital off public blockchains. “On public blockchains, positions, balances, and strategies are visible to competitors and front-runners, a structural blocker to institutional deployment at scale,” Zama said in its statement. The firm argued that expanding its curated vault range and adding new asset classes lets “institutional allocators, corporate treasuries, and active market participants” tap diversified onchain yield without broadcasting their holdings or strategies to the rest of the market.

Addressing visibility issues for institutional DeFi deployments

Morpho co-founder Merlin Egalite framed the move in similar terms, tying it directly to institutional demand. “Institutions have increasingly been exploring how onchain capital allocation can be made more confidential to fit their requirements,” 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.”

Deployment first on Zama app with upcoming integrations

For now, the vaults are only accessible through Zama’s own app. That’s set to change soon: Utila, Zerion Wallet, and Yield.xyz are all expected to integrate the vaults in the coming weeks, which would widen the pool of wallets and platforms through which institutional and retail users alike can reach these products.

The bigger question is whether curated, confidential vaults can keep pulling in capital at the pace the pilot did once the novelty fades. A jump from zero to $40 million in seven weeks is a strong early signal, but scaling that across 16 vaults with five different curators and four new asset types is a different test entirely. If the model holds, it could push other DeFi protocols to treat confidentiality less as a niche feature and more as a baseline expectation for institutional-grade products on Ethereum.

FAQ

What are the new confidential vaults Zama launched on Morpho?

Zama opened deposits into 16 confidential vaults on Morpho on September 15, including 12 vaults with confidential access to existing products and 4 built specifically for confidential deposits.

Which assets are supported in Zama’s confidential vaults?

The vaults support deposits in USDC, USDT, AUSD, and TGBP.

Who curates the vaults on Morpho with Zama?

The vaults are curated by Steakhouse Financial, Armitage by Wintermute, Flowdesk, RockawayX, and Bitwise.

What is the Zama Swap Protocol and what can it do?

The Zama Swap Protocol enables confidential swaps on Ethereum of cUSDC, cUSDT, cAUSD, cTGBP, and vault shares, without disclosing transaction size or intent.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.