What to know:
- Zama USDC Vault reached $23.23 million, ranking eighth among Morpho vaults on Ethereum.
- The vault accepts only cUSDC and uses FHE to encrypt balances and transaction amounts.
- Deposits rose from over $14 million to $23.23 million within the vault’s first month.
The Zama USDC Vault has become one of the largest USDC lending vaults on Morpho’s Ethereum deployment. Zama said deposits reached $23.23 million by July 16. The total placed the product eighth among Morpho V1 and V2 USDC vaults there.
The figure came from a snapshot taken at Ethereum block 25,544,806, according to Zama. The company noted that the ranking may change as deposits move. Withdrawals could also reduce the reported total.
The Steakhouse Confidential Prime USDC vault was opened for deposits on June 23. Steakhouse Financial controls and selects the lending strategy. Morpho builds the lending infrastructure that is used by the vault.
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How Confidential USDC Enters Morpho Lending Markets
Zama offers the confidentiality technology that is utilized by the product. The Zama USDC Vault takes in only the confidential USDC that is called cUSDC. It does not take standard USDC from depositors.
The product uses Fully Homomorphic Encryption technology, also known as FHE. This technology helps keep encrypted individual balances and amounts of transactions while making it possible to interact with applications on Ethereum.
Deposits go into the Morpho lending strategy on Ethereum. Collateral assets include cbBTC, WBTC, and wstETH. They help with borrowing in the underlying lending markets.
Zama noted the growth as a sign of interest in confidential financial infrastructure. The company attributed the incentive program as an additional factor attracting capital. The company did not claim the rewards as the main factor of growth.
What Drove Zama USDC Vault Growth on Morpho
The rewards campaign for Zama USDC Vault lasted for 12 weeks. The rewards were part of the Morpho strategy yields. The base strategy was estimated to have a yield of about 4% at the product’s launch.
Deposits exceeded the amount of $14 million on July 2. This figure grew to about $23.23 million by July 16. Such growth happened within the first month of the vault’s functioning.
Morpho has also expanded through consumer wallet integrations. In May, the company integrated USDC and USDT vaults managed by Steakhouse into the Trezor wallet.
What Changed After Circle Froze the Zama Contract
The Zama USDC Vault also experienced the challenge of legal pressure. The US court order resulted in freezing of the Zama contract with Circle in May. The contract stored about $12.5 million worth of USDC.
The order was later lifted. Zama stated that the fund returned to normal operation, and this incident encouraged the company to accelerate its compliance process.
Controlled disclosure tools are being developed in Zama. According to the company, the system provides hiding of the transaction data without anonymizing users. Some functions will also allow handling requests from regulators and courts.
The Zama USDC Vault is operating in Morpho’s already existing Ethereum lending market. Its current ranking is based on the information of July 16. Future deposits and withdrawals may change that position.
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