Zama expands confidential DeFi with 16 Morpho vaults

Zama has expanded its confidential decentralised finance offering with Morpho and five curators, adding 16 confidential vaults and opening the Zama Swap Protocol.

The expansion follows an earlier launch with Morpho and Steakhouse that reached USD $40 million in total value locked within seven weeks.

The new vaults cover several asset classes, including USDC, USDT, AUSD and tGBP. The curators are Steakhouse Financial, Armitage by Wintermute, Flowdesk, RockawayX and Bitwise.

The move addresses a long-standing concern for institutional users of public blockchains: wallet balances, trading activity and portfolio strategies are often visible onchain. In practice, that transparency has made some treasuries, allocators and active trading firms wary of deploying larger pools of capital through decentralised protocols.

Morpho, an onchain lending and credit network, provides the underlying venue for the new vaults. All 16 are deployed on Morpho, giving users access to existing yield strategies while concealing holdings and transaction intent, according to Zama.

Vault structure

The launch includes two types of vault. Twelve are hybrid vaults, offering confidential access to existing curated vaults on Morpho. Four are exclusive vaults, available only in confidential form and with no public equivalent.

The swap protocol lets users move between confidential assets and vault share positions without revealing trade size or intent on Ethereum. The assets named are cUSDC, cUSDT, cAUSD and cTGBP.

That creates a closed loop in which users can deposit funds, earn yield and swap positions without exposing each step publicly onchain, Zama said. The model is aimed at users who want access to established DeFi markets without moving to a separate blockchain or giving up self-custody.

Dr Rand Hindi, Co-founder and Chief Executive Officer of Zama, linked the rollout to the company's earlier work with Morpho and Steakhouse.

"When we launched the first confidential USDC vault with Morpho and Steakhouse in June, we proved that confidentiality and DeFi are not mutually exclusive," said Hindi. "Today's expansion is proof of the model at scale. Sixteen vaults, five curators, five asset classes, all built on the same DeFi infrastructure that sophisticated capital already uses. Same vaults, same curators, same liquidity, now with confidential entry. This is how confidential DeFi becomes a category and not an experiment."

Institutional angle

The announcement reflects a broader effort across the digital asset sector to make public blockchain infrastructure more acceptable to institutional investors. While many financial firms have experimented with tokenised assets and onchain settlement, public disclosure of positions has remained a sticking point for users concerned about counterparties, rivals or front-runners tracking their activity.

Morpho said confidential access could broaden the appeal of onchain allocation without changing the underlying strategies available to depositors.

"Institutions have increasingly been exploring how onchain capital allocation can be made more confidential to fit their requirements. 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," said Merlin Egalite, Co-founder of Morpho.

The launch also adds tGBP, linking the expansion to sterling-denominated stablecoin activity. Benoit Marzouk, Chief Executive Officer of BCP Technologies, which issues tGBP, said the UK market remained largely untapped for larger institutional stablecoin use cases.

"Zama's confidential product suite is unlocking institutional adoption opportunities globally including in the UK where stablecoin adoption with large institutions is a greenfield opportunity," said Marzouk. "The combination of confidentiality with bluechip protocols like Morpho provide a clear entry point for any institutional player integrating stablecoins into their business."

Distribution plans

Alongside direct access through Zama's own application, the company identified other distribution channels including Utila, Zerion Wallet and Yield.xyz. The integrations point to a strategy of embedding confidential products into existing wallet and financial platform interfaces rather than requiring users to learn a new workflow.

Zerion said public visibility remains a barrier for users who hold significant digital assets in self-custodial wallets.

"Every position a self-custodial wallet user holds is public by default. That's one of the reasons people are reluctant to keep large amounts onchain. Zama's confidentiality layer plugs into vaults people already use rather than asking them to move to a new chain. A wallet can support this natively with minimum friction, and why these vaults are coming to Zerion in the weeks ahead," said Evgeny Yurtaev, Co-founder and Chief Executive Officer of Zerion.

Yield.xyz framed the launch in similar terms, focusing on access through existing platform connections.

"Confidentiality should not require institutions to abandon the platforms they already use. Yield.xyz makes Zama's confidential Morpho Vaults accessible through the same integration layer that wallets and financial platforms use to offer onchain yield. That gives platforms a practical path to support confidential positions while preserving the underlying strategy, liquidity, and risk profile," said Serafin Lion Engel, Co-founder and Chief Executive Officer of Yield.xyz.