Zama’s Encrypted Ethereum Token Auction Draws $118M in Commitments

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Zama, a cryptography company building fully homomorphic encryption (FHE) tools for blockchain, said Monday, Jan. 26, that it raised $118.5 million in commitments through a public token auction it described as the first encrypted initial coin offering (ICO) conducted on Ethereum.

The auction ran from Jan. 21 to Jan. 24 and attracted 11,103 unique bidders across Zama’s auction app, KuCoin and CoinList, according to figures shared by the project in a post on X. Zama said the sale cleared at $0.05 and was oversubscribed by 218%.

Zama added that its auction app was the most-used application on Ethereum by transaction count on Jan. 24, ahead of USDT, USDC and Uniswap. The project also said Total Value Shielded (TVS) topped $100 million within three days – its public Dune dashboard shows TVS at roughly $117.4 million as of Monday.

Zama Total Value Secured

Zama said the sale used a sealed-bid auction, meaning people could choose a price publicly but keep the size of their bids private. The project said this was meant to reduce bots and copycat trading during the sale.

The method chosen by Zama comes as privacy has become a growing talking point in crypto, especially as more financial activity moves onchain.

While some U.S. regulators have pushed for stronger crypto privacy tools, others globally have taken a tougher stance – including Dubai’s financial regulator, which recently banned privacy-focused cryptocurrencies such as Monero (XMR) and Zcash (ZEC) from use on regulated exchanges.

“After studying more than a hundred TGEs, we found that auctions offer the best balance of fair distribution, price discovery, and capital efficiency,” Zama’s post reads. “In a Dutch auction, the clearing price isn't the highest bid, it's the lowest price at which a bid gets filled. Confidentiality is critical: when participants can see others' bids, price discovery becomes distorted as people react to one another rather than bidding what they truly believe.”

The company said claims will open Feb. 2, with ZAMA tokens distributed as standard ERC-20 tokens on Ethereum. The company said the token will be used to pay fees on the Zama Protocol and can be staked to earn rewards.