Zama, Morpho and Steakhouse unveil confidential USDC vault

Zama, Morpho and Steakhouse Financial launched the Steakhouse Confidential USDC Prime vault on Ethereum, allowing holders of Zama’s encrypted cUSDC to deposit into Morpho’s existing USDC Prime strategy and earn yield without revealing balances, transfer amounts or on‑chain strategy. Deposits open June 23 through the Zama app.

Zama’s cUSDC converts standard USDC directly on Ethereum using fully homomorphic encryption. The process shields balances and transfer amounts while keeping tokens auditable and subject to compliance checks. Once converted, cUSDC can be placed into the Steakhouse USDC Prime vault and take advantage of Morpho’s liquidity and capital efficiency without public disclosure of position sizes or flows.

Zama performs the shielding on Ethereum, avoiding a bridge to another chain. Assets in the Steakhouse vault remain subject to Morpho’s existing security model and risk parameters, so institutional participants use the same operational protections as other vault users while keeping allocation details private.

Dr. Rand Hindi, Zama co‑founder and CEO, called the launch the start of a “confidential DeFi” category on Ethereum and said public blockchains previously required users to expose their financial playbook to competitors. Morpho co‑founder Merlin Egalite noted that institutions have repeatedly signaled demand for on‑chain confidentiality and that Zama’s stack allows allocations without revealing operational details. Steakhouse co‑founder Sébastien Derivaux described the USDC Prime vault as “built to be liquid and risk‑conscious,” and said Zama’s confidentiality layer lets institutions access the same strategy without broadcasting positions to competitors or front‑runners.

The launch follows Zama’s recent infrastructure moves: the company acquired TokenOps to support encrypted token distributions for institutional issuers and partnered with a tokenization network to apply its homomorphic encryption to ERC‑3643 tokenized real‑world assets. A federal judge recently ordered Circle to blacklist the cUSDC contract after roughly $12.6 million tied to a class‑action suit flowed into it; Zama characterized that episode as the contract being caught in a crossfire rather than a system flaw.

Morpho completed a $175 million funding round this month co‑led by Paradigm, a16z crypto and Ribbit Capital, with participation from Apollo Funds, Circle Ventures and VanEck, valuing the protocol at about $2 billion. Steakhouse previously launched a vault in February that allows Safe users to earn yield on Société Générale’s MiCA‑compliant EURCV stablecoin.

Deposits into the Steakhouse Confidential USDC Prime vault open on June 23 via the Zama app, after which encrypted USDC holders can begin allocating to the vault while keeping their balances and transaction details confidential on chain.