Zama and OpenZeppelin Want to Make Privacy the Default in DeFi—Here’s How

It’s not every day two key infrastructure players join forces to tackle one of crypto’s thorniest problems: privacy.

But that’s exactly what’s happening as Zama, a cryptography company focused on Fully Homomorphic Encryption (FHE), has partnered with OpenZeppelin, the widely-used security audit firm behind Ethereum’s most trusted smart contract libraries.

The goal? To make confidential smart contracts as easy to deploy as your average ERC-20 token.

Bringing encrypted computation to smart contracts

At the core of this collaboration is FHEVM, Zama’s EVM-compatible virtual machine that allows smart contracts to compute directly on encrypted data.

OpenZeppelin has already developed a Confidential Token interface, think ERC-20 but with encrypted balances and transactions, which is now live on GitHub and built using Zama’s FHEVM coprocessor.

Together, the two companies are rolling out a library of contract templates and developer tools designed from the ground up for confidentiality.

Use cases in the pipeline include encrypted tokens, private governance, sealed-bid auctions, and tokenized real-world assets (RWAs).

They’re also launching a new Privacy Relayer to enable smooth encrypted transaction execution, as well as FHE-friendly upgrades to OpenZeppelin’s Contracts Wizard.

Rand Hindi, CEO of Zama, emphasized the broader mission: “We’re building the infrastructure that enables fully confidential smart contracts, while preserving decentralization and composability.”

The goal is to create a system that financial institutions and enterprises can confidently build on, without needing to sacrifice transparency or verifiability.

Building toward institutional-grade privacy

Beyond the tech, this partnership also includes the creation of the Confidential Token Association alongside Inco Network.

Their mission? To establish a new open-source standard for confidential tokens, essentially upgrading existing token frameworks like ERC-20 with encrypted-by-default behavior.

Zama and OpenZeppelin are pitching this as the final puzzle piece before institutions start embracing blockchain at scale. All the components, tokens, tools, relayers, will be open source and production-ready.

In their view, privacy isn’t just a feature; it’s the missing prerequisite to unlocking onchain finance for the real world.

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