Zama, Morpho and Steakhouse launch first 'confidential DeFi yield' vault on Ethereum

Zama, Morpho and Steakhouse Financial are launching the Steakhouse Confidential USDC Prime vault, the first DeFi yield product for confidential USDC stablecoins on Ethereum, The Block has exclusively learned.

The integration lets holders of Zama's encrypted cUSDC deposit directly into Morpho's existing Steakhouse USDC Prime vault and earn yield without exposing their balances, transaction amounts or strategy onchain.

"Until now, operating on a public blockchain meant exposing your entire financial playbook to your competitors," said Zama co-founder and CEO Dr. Rand Hindi. He called the launch the official start of a "confidential DeFi" category on Ethereum.

Deposits for the vault go live on June 23 via the Zama app, according to the teams.

Zama's cUSDC uses fully homomorphic encryption to shield balances and transfer amounts while preserving auditability and compliance checks, converting standard USDC directly on Ethereum without requiring a bridge to another chain.

Once shielded, the tokens can be deposited into Morpho vaults and inherit the protocol's existing security and capital efficiency.

Morpho co-founder Merlin Egalite said institutional demand for onchain confidentiality has been a consistent signal from prospective users, and that Zama's stack lets institutions allocate into Morpho vaults without compromising operational privacy.

Steakhouse co-founder Sébastien Derivaux added that the firm's USDC Prime vault, its oldest on Morpho, is built to be liquid and risk-conscious, and that Zama's confidentiality layer lets institutions access the same strategy without broadcasting their positions to competitors or front-runners.

Zama infrastructure

The launch builds directly on infrastructure already in production.

A federal judge ordered Circle last month to blacklist Zama's cUSDC contract after roughly $12.6 million tied to a class-action suit against Overnight Finance's Maxim Ermilov flowed into it, an episode Hindi described at the time as the contract getting caught in a crossfire rather than evidence of a flaw in the underlying system.

Zama also acquired TokenOps last month to bring encrypted token distributions to institutional issuers, and partnered with Apex Group-backed T-REX Network in March to bring its FHE layer to tokenized real-world assets on the ERC-3643 standard.

Steakhouse has built a similar institutional yield track record on Morpho separately from this integration, including a vault launched in February that lets Safe users earn yield on Société Générale's MiCA-compliant EURCV stablecoin.

Morpho closed a $175 million funding round this month, co-led by Paradigm, a16z crypto and Ribbit Capital, with Apollo Funds, Circle Ventures and VanEck also participating, valuing the protocol at roughly $2 billion.

(ZAMA) was trading near $0.035 and (MORPHO) near $1.92 as of Wednesday.