Key facts
- Zama, Morpho, and Steakhouse Financial have launched the Steakhouse Confidential USDC Prime vault.
- This is the first DeFi yield product for confidential USDC stablecoins on the Ethereum blockchain.
- The vault allows users to deposit encrypted cUSDC into Morpho's existing USDC Prime vault.
- Users can earn yield without exposing their balances, transaction amounts, or strategies on-chain.
- Deposits for the vault will begin on June 23.
- Zama's cUSDC utilizes fully homomorphic encryption for privacy while maintaining auditability.
Zama, Morpho, and Steakhouse Financial have introduced the Steakhouse Confidential USDC Prime vault, marking the debut of a DeFi yield product designed for confidential USDC stablecoins on the Ethereum network. This new vault enables holders of Zama's encrypted cUSDC to deposit their assets directly into Morpho's established Steakhouse USDC Prime vault, allowing them to earn yield without revealing their balances, transaction amounts, or investment strategies on the public blockchain.
According to Zama co-founder and CEO Dr. Rand Hindi, this launch signifies the beginning of a "confidential DeFi" category on Ethereum, addressing the long-standing issue of financial playbook exposure on public blockchains. Deposits for the vault are scheduled to commence on June 23 via the Zama application.
Zama's technology employs fully homomorphic encryption to protect balances and transfer amounts while ensuring auditability and compliance. This process converts standard USDC directly on Ethereum, eliminating the need for cross-chain bridges. Once shielded, these tokens can be deposited into Morpho vaults, benefiting from the protocol's existing security and capital efficiency measures.
Merlin Egalite, co-founder of Morpho, highlighted that institutional demand for on-chain confidentiality has been a persistent request from potential users, and Zama's infrastructure allows institutions to allocate capital into Morpho vaults while maintaining operational privacy. Sébastien Derivaux, co-founder of Steakhouse, added that their USDC Prime vault is designed for liquidity and risk management, and Zama's confidentiality layer provides institutions access to this strategy without broadcasting their positions to competitors or front-runners.
The underlying infrastructure for this launch is already operational. Notably, a federal judge recently ordered Circle to blacklist Zama's cUSDC contract in connection with funds tied to a class-action suit, an event Zama attributed to the contract being caught in collateral damage rather than a system flaw. Zama also recently acquired TokenOps to facilitate encrypted token distributions for institutional issuers and partnered with T-REX Network to integrate its FHE layer with tokenized real-world assets on the ERC-3643 standard. Steakhouse has independently built a strong institutional yield track record on Morpho, including a vault launched in February for Safe users to earn yield on Société Générale's MiCA-compliant EURCV stablecoin. Morpho recently closed a $175 million funding round co-led by Paradigm, a16z crypto, and Ribbit Capital, with participation from Apollo Funds, Circle Ventures, and VanEck, valuing the protocol at approximately $2 billion.