Privacy-tech firm Zama said Wednesday it is launching the first DeFi yield product for Confidential USDC, opening deposits June 23 through a vault built on Morpho and curated by Steakhouse Financial. The product extends fully homomorphic encryption from simple token transfers into a productive lending strategy, the first time the cryptography has been bolted to a live DeFi yield venue.
The Steakhouse Confidential USDC Prime vault accepts cUSDC, Zama's encrypted wrapper of Circle's stablecoin, and routes the underlying capital into Steakhouse's existing Prime v2 strategy on Morpho. Backing collateral spans cbBTC, WBTC and wstETH, the same blue-chip basket used in the flagship USDC Prime vault. Zama posted the launch on its official X account, with a six-day shielding window opening for depositors first.
Fully homomorphic encryption lets a smart contract perform arithmetic on ciphertext without decrypting it, the primitive Zama has productized. Balances, deposit amounts and transfer values stay encrypted on Ethereum, while the vault's accounting math, including yield accrual and share issuance, runs on the encrypted state. Health checks and risk parameters operate on the same primitives, so the curator can read solvency without reading positions.
