Zama disclosed that its privacy-focused USDC lending vault on the Morpho Ethereum deployment has reached $23.23 million, placing it among the top eight USDC vaults on the platform. This product, launched less than a month ago, demonstrates the growing acceptance of privacy-enabled stablecoin products in the on-chain lending market.
$23.23 million to enter the top eight
According to data released by Zama on July 16, Steakhouse Confidential Prime USDC vaults held $23.23 million in deposits at Ethereum block 25,544,806. The company stated that, at that time, this size ranked eighth among V1 and V2 USDC vaults on Morpho Ethereum.
This vault opened for deposits on June 23, with strategy management by Steakhouse Financial, lending infrastructure provided by Morpho, and privacy technology by Zama. As users can deposit or redeem at any time, its ranking and size are subject to change.
The user deposited cUSDC
Users are not depositing regular USDC, but rather confidential USDC, also known as cUSDC. Zama uses fully homomorphic encryption technology to encrypt individual balances and transaction amounts while assets are being integrated into Ethereum applications.
These funds will ultimately be channeled into a strategy based on the Morpho lending market, with collateral including cbBTC, WBTC, and wstETH. Zama hopes to use this to directly integrate privacy features into existing liquidity, rather than building a new public chain or a layer-two network.
12-week incentives drive early deposits
Zama views the expansion of this vault as an initial signal of market demand. However, the company also mentioned that early deposit growth is related to an incentive program. The product launch included a 12-week reward program, providing additional incentives to early users on top of the underlying Morpho strategy earnings.
- The launch date is June 23.
- Deposits exceeded $14 million on July 2nd.
- Deposits rose to $23.23 million on July 16.
According to Zama's disclosure at the time, the annualized return of the native strategy was approximately 4% when the product was launched. The company previously stated on July 2 that its gold reserves had exceeded $14 million, and subsequently rose further to $23.23 million within two weeks.
USDC was frozen in May.
However, privacy-focused financial products still face compliance challenges. In May, a US court order led Circle to temporarily freeze approximately $12.5 million in USDC in a Zama contract. The order was subsequently lifted, and Zama stated that the funds have resumed normal operation.
Additional information:The company stated that this incident prompted it to accelerate the development of compliance and controlled disclosure tools. According to Zama, its system encrypts transaction details, rather than making users completely anonymous, and plans to offer features that respond to legal and regulatory requirements.
