Zama Staking

ZAMA is the native token of the Zama Protocol, a cross-chain confidentiality layer powered by Fully Homomorphic Encryption (FHE). ZAMA is an ERC-20 token on Ethereum and has three core utilities:

• Staking: KMS node operators and FHE coprocessor operators must stake ZAMA to participate in the protocol, and token holders can delegate ZAMA to operators to earn a share of staking rewards.
• Protocol fees: Fees for confidential operations — decryption, proof verification, and bridging — are paid in ZAMA and are 100% burned, linking token scarcity to protocol usage.
• Governance: ZAMA governance elects the operator set and adjusts protocol parameters such as the staking emission rate.

The Zama Protocol is a confidentiality layer for public blockchains, built on Fully Homomorphic Encryption (FHE) — cryptography that allows computations to run directly on encrypted data. It enables confidential smart contracts, encrypted token balances, confidential payments, and private tokenized assets on existing chains, starting with Ethereum, without sacrificing composability.

The protocol launched on Ethereum mainnet on December 30, 2025, completing the first confidential stablecoin transfer on Ethereum. It consists of the FHEVM contract layer on host chains, a network of FHE coprocessors that execute encrypted computations, a threshold Key Management Service (KMS) that controls decryption, and a Gateway that orchestrates the system. Staking went live on mainnet in January 2026, with 18 governance-elected operators securing the protocol.

ZAMA is an ERC-20 token on Ethereum with an initial supply of roughly 11.1 billion tokens. The token launched publicly on February 2, 2026, following a sealed-bid Dutch auction that raised over $118 million.

• Staking emissions: Staking rewards are funded by minted emissions of around 5% of total supply per year, adjustable by governance. Emissions are split 60% to the KMS staking pool and 40% to the coprocessor staking pool.
• Fee burning: 100% of protocol fees (decryption, proof verification, bridging) are burned, creating a burn-and-mint economy — as protocol usage grows, burns offset emissions and net inflation falls.
• Circulating supply: Around 2.2 billion ZAMA entered circulation at launch, with the remainder subject to vesting and protocol allocations.

The Zama Protocol uses a Delegated Proof-of-Stake (DPoS) model with two specialized operator roles, all staking on Ethereum:

• KMS node operators run a threshold Key Management Service using multi-party computation, so no single party ever holds the network's decryption key. A majority of KMS nodes must cooperate to decrypt any value.
• FHE coprocessor operators execute the encrypted computations requested by confidential smart contracts.

Operators are elected by governance and must stake ZAMA; the genesis set consists of 18 operators (13 KMS and 5 coprocessor operators), including established infrastructure providers. Delegators add economic security by staking ZAMA with operators. Slashing is designed into the protocol but is not yet implemented on mainnet.

ZAMA staking happens on Ethereum through per-operator staking vaults:

• 1. Acquire ZAMA: Obtain ZAMA tokens on a supported exchange and withdraw them to your Ethereum wallet.
• 2. Open the staking portal: Go to staking.zama.org and connect your wallet.
• 3. Choose an operator: Pick a KMS or coprocessor operator and delegate your ZAMA to its staking vault.
• 4. Receive liquid shares: You receive transferable stZAMA shares representing your stake, and rewards accrue automatically.

Unstaking is subject to a 7-day cooldown period. Use the Staking Rewards Calculator to estimate your expected rewards.

Zama operators are a governance-elected set, so all of them passed a baseline quality bar. When choosing where to delegate, consider:

• Commission: Operators charge a commission on delegator rewards, capped at 20% by the protocol. Lower commission means more rewards for you.
• Operator stake: Rewards within each role pool are weighted by the square root of operator stake, so operators with less total stake offer a higher reward rate per delegated token, all else being equal.
• Role: KMS operators share 60% of emissions and coprocessor operators 40%; the reward rate per token depends on how much is staked in each pool.
• Reputation and reliability: The genesis set includes established infrastructure providers. Choose operators with a strong operational track record.

No active maintenance is required. Once you delegate ZAMA to an operator, rewards accrue automatically according to the protocol's emission schedule, and your stZAMA shares track your position.

That said, it is good practice to:

• Claim and restake periodically: Rewards are not auto-compounded at the protocol level, so restaking claimed rewards increases your effective yield.
• Monitor your operator: Commission rates and operator stake can change over time, which affects your reward rate. Re-delegate if a different operator suits you better.
• Follow governance: Emission rates and the operator set are governance-controlled and can change.

Zama staking rewards come from minted token emissions, initially around 5% of total ZAMA supply per year and adjustable by governance:

• Emission split: 60% of emissions go to the KMS staking pool and 40% to the coprocessor staking pool.
• Square-root weighting: Within each pool, rewards are distributed pro-rata to the square root of each operator's stake, which favors stake decentralization.
• Commission: Operators deduct a commission (capped at 20%) before passing rewards to delegators.

Protocol fees are not distributed to stakers — they are 100% burned. Note that the reward rate is a function of total stake: because emissions are fixed by the schedule, the rate decreases as more ZAMA is staked across the protocol.

Staking ZAMA carries several risks to be aware of:

• Smart contract risk: Staking is implemented through Ethereum smart contracts (staking pools and per-operator vaults); bugs or exploits could put funds at risk.
• Unbonding period: Unstaking is subject to a 7-day cooldown during which your tokens remain exposed to price movements. Liquid stZAMA shares can be transferred, but secondary-market liquidity is not guaranteed.
• Future slashing: Slashing is not currently implemented on mainnet, but it is designed into the protocol; once activated, operator misbehavior could lead to stake penalties.
• Variable reward rate: The reward rate falls as total staked ZAMA grows, since emissions are fixed by the schedule.
• Early-stage protocol: The Zama Protocol launched on mainnet in late 2025; parameters, operator sets, and token economics are still evolving under governance.