Zama Completes Its First Crypto ICO: Dutch Auction Raises Around $118 Million as Innovative FHE Bidding Draws Market Attention

Zama ICO Background Overview

Image: https://x.com/zama

Zama is an open-source cryptography company specializing in Fully Homomorphic Encryption (FHE). This technology enables encrypted computation without exposing the underlying data, providing foundational infrastructure for blockchain privacy and secure computation. At the end of 2025, Zama announced it would launch its native token, ZAMA, on Ethereum through a public auction, drawing significant industry attention.

This public sale marks a major milestone for the industry—not only is it Zama’s inaugural crypto ICO, but it also introduces a novel auction mechanism designed to address challenges common to traditional ICOs, such as rush buying, front-running, and price distortions.

Innovative Auction Model: Fully Homomorphic Encryption and Dutch Auction

A key highlight of the Zama ICO is the integration of Fully Homomorphic Encryption (FHE). FHE allows bidders to submit encrypted bids on-chain, concealing their actual bid amounts while ensuring the process remains verifiable. This approach, rare in previous public token sales, is expected to advance privacy protection in future ICOs and crowdfunding events.

Zama also adopted a Dutch Auction mechanism, where tokens are allocated from the highest to the lowest price until all are sold, with all successful bidders settling at a single clearing price. This structure supports genuine price discovery and mitigates price distortions that can arise from fixed pricing models.

Auction Results and Funding Scale

According to official disclosures, Zama’s first crypto ICO concluded on January 24, 2026, raising approximately $118.5 million. Auction data shows that over 11,000 unique users submitted nearly 24,700 bids, with the final clearing price set at $0.05 per token.

The public sale was significantly oversubscribed, reaching an oversubscription rate of 318%. This outcome demonstrates that market recognition of the Zama project and its technology exceeded expectations.

Bidder Data and Market Performance

Participants spanned the globe and included both institutional investors and individuals. The large number of bids and high demand underscore the crypto community’s interest in privacy chain technology. Within the Ethereum ecosystem, the FHE bidding process offers a fair and highly confidential participation model, encouraging broader investor engagement in innovative sales like this.

Currently, the ZAMA token has not yet been listed or made available for public trading on major exchanges. The token claim process is scheduled for early February 2026, subject to official updates.

ZAMA Token Utility and Unlock Status

ZAMA is the native utility token of the Zama protocol, intended for use in paying privacy computation fees, participating in staking, or delegating network operations. These functions help maintain protocol security and ecosystem operations. Unlike many projects, the tokens sold in this public auction are fully unlocked and can be used immediately within the protocol or for other purposes once claimed.

ICO Impact on the Crypto Market and Privacy Chain Development

Zama’s ICO stands out not only for its large fundraising scale but also as the world’s first ICO to use FHE confidential bidding, setting a precedent in the industry. This model is likely to be adopted by more blockchain projects for token issuance, offering new tools for capital formation and fair pricing.

On a broader scale, privacy protection, on-chain security, and equitable participation remain long-term priorities in the blockchain ecosystem. The auction data shows that the market is increasingly embracing and prioritizing these innovative technologies.

Risk Disclosure and Investment Advisory

While the completion of the Zama ICO represents a successful integration of technology and market forces, participants should remain aware of the risks inherent in ICO investments. Token prices may experience significant volatility during initial public trading. The information presented does not constitute investment advice; investors should carefully assess risks and consult professional advisors before making any decisions.