Zama Expands Confidential Morpho Vaults and Launches Private Swaps on Ethereum

Zama has expanded its confidential finance offering on Ethereum with a private-beta RFQ swap protocol that supports trading against cUSDC, linking encrypted order flow with a Morpho vault that had surpassed $40 million in deposits by September 2026. The swap protocol went live on Ethereum mainnet in private beta on July 23, according to Zama’s community forum.

The rollout moves beyond confidential deposits into a workflow in which users can hold and deploy confidential USDC, then access swaps designed to keep key order details hidden. Access remains constrained by the private-beta format, and the protocol’s market-making process is limited to whitelisted market makers.

Confidential RFQ brings encrypted order flow to Ethereum

Zama’s Confidential RFQ uses an onchain request-for-quote process while keeping trade size and direction confidential. The current Confidential Swap product supports cUSDT/cUSDC, cZAMA/cUSDC and csteakUSDC/cUSDC pairs, according to Zama.

The protocol also encrypts a trader’s price limit. Whitelisted market makers compete to fill orders through a blind auction, meaning they can participate in the quoting process without the publicly visible order details associated with conventional onchain swaps.

Zama said all swap fees are allocated to buying back and burning ZAMA. That fee treatment makes the swap venue part of the protocol’s stated token mechanism, rather than simply a private trading interface for cUSDC-denominated pairs.

Steakhouse’s cUSDC vault replicated an existing Morpho strategy

The confidential yield product preceded the RFQ launch. On June 17, Zama announced the Steakhouse Confidential USDC Prime vault, describing it as the first DeFi yield product for confidential USDC, or cUSDC. Deposits were scheduled to open on June 23; Steakhouse Financial curates the vault and Morpho hosts its deployment.

Its structure is significant because it does not introduce a separate credit strategy for confidential users. The vault mirrors Steakhouse Prime USDC on Morpho, using the same collateral, markets, risk parameters and credit strategy, while Zama’s fully homomorphic encryption-based layer encrypts deposit sizes, positions and timing, Zama said in its launch announcement.

That means the confidential version is intended to provide privacy around a user’s activity rather than alter the underlying strategy’s portfolio construction. The Block reported that the integration allows cUSDC holders to enter Steakhouse’s existing USDC Prime strategy without exposing wallet balances, transaction amounts or strategy information on Ethereum.

The distinction matters for the newly supported csteakUSDC/cUSDC pair. It places a token connected to the confidential vault alongside cUSDC in Zama’s RFQ venue, extending the product set from private participation in a lending strategy to encrypted exchange functionality.

Official visual accompanying Zama’s announcement of the Confidential USDC Prime vault on Morpho. — Source: Zama

Morpho reports $40 million in confidential vault deposits

By September 2026, the confidential vault had exceeded $40 million in aggregate deposits, according to Morpho, which said individual user positions remained hidden onchain. Morpho also said deposits are batched every 24 hours before being supplied to the Morpho vault. Zama’s Ethereum deployment includes confidential vault access and the Confidential RFQ swap protocol, launched in private beta, with controlled participation and designated market makers.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.