Interpretation of ZAMA Dutch Auction Public Sale: How to Seize the Last Interaction Opportunity?

Original Title: "Is Zama's Public Sale Too Complicated? A Comprehensive Guide to Sealed-Bid Dutch Auctions"

Author: Asher, Odaily

On December 1, Zama, a fully homomorphic encryption (FHE) network with total funding of up to 130 millions USD, announced on X that it will sell 10% of the total ZAMA token supply through a sealed-bid Dutch auction, using FHE to keep bids confidential. In addition, the Zama mainnet is expected to launch by the end of the year.

Zama is arguably the most discussed project in the community recently. Below, Odaily will walk you through the Zama project, the sealed-bid Dutch auction mechanism, and the last interactive opportunities before the token launch.

Project Overview

Zama is a company specializing in fully homomorphic encryption (FHE) technology, which is considered one of the most hardcore innovations in the field of privacy computing. Simply put, it allows computations to be performed directly on encrypted data without the need for decryption. Zama's mission is to build efficient and user-friendly FHE tools to promote the widespread adoption of this technology in Web3 and other fields. Zama's core team was co-founded by Rand Hindi and Pascal Paillier:

· Rand Hindi learned programming at age 10, created a social website that became a hit in France at 14, holds a PhD in Computer Science and Bioinformatics from University College London, and previously founded and sold the AI voice platform Snips;

· Pascal Paillier is a top expert in the field of fully homomorphic encryption, with 25 years of research experience, 25 patents, dozens of published papers, recipient of the Asiacrypt Best Paper Award, and a core member of IACR.

Currently, Zama has completed two rounds of financing, with a total amount reaching 130 millions USD. In March 2024, Zama announced the completion of a 73 millions USD Series A round led by Multicoin Capital and Protocol Labs; in June 2025, Zama announced the completion of a 57 millions USD Series B round led by Blockchange Ventures and Pantera Capital.

The Sealed-Bid Dutch Token Sale Will Begin on January 12

Sale Details

Auction method: Sealed-bid Dutch auction;

Auction period: To be held from January 12 to 15, with claiming starting on January 20;

Sale allocation: 10% of the total token supply, of which 8% will be sold via auction, and 2% will be sold at a fixed price after the auction (with a personal cap of 10,000 USD per person);

Vesting: Zama tokens purchased in the auction will be fully unlocked;

Zama token sale will begin on January 12

What is a Sealed-Bid Dutch Auction?

Zama will sell 10% of the total ZAMA token supply through a sealed-bid Dutch auction on Ethereum, using FHE to keep bids confidential. Highlights include fair distribution, no front-running, no bots, and no gas wars. Specifically, the sealed-bid Dutch auction consists of four stages:

· Stage 1: Shield stablecoins. Prepare funds and convert your USDC, USDT, DAI, and other stablecoins on Ethereum into ERC-7984 confidential assets (the official asset conversion website will be provided when the sale goes live). The balances and transfer amounts of these tokens will be encrypted.

· Stage 2: Place your bids. This is the bidding phase, from January 12 to January 15. Users can submit any number of bids; prices are public, but quantities are confidential. The minimum price is 0.005 USD (corresponding to a 55 millions USD FDV). Unlike open Dutch auctions where the price decreases over time, the sealed-bid Dutch auction allows users to bid at any price during the entire bidding period.

· Stage 3: Clearing price and allocation. This is the settlement phase, from January 16 to January 19. Using smart contract FHE computation, demand is accumulated from highest to lowest price to determine the final clearing price. Therefore, users will encounter three scenarios: 1. If your bid is higher than the clearing price, you will receive your full allocation and any excess funds will be refunded; 2. If your bid equals the clearing price and the quantity exceeds the remaining supply at that price, you will receive a proportional share of tokens and a refund for the remainder; 3. If your bid is below the clearing price, you will not receive any tokens and will get a full refund.

· Stage 4: Claim your tokens. This is the token claiming phase, starting from January 20, where you can claim your ZAMA tokens (fully unlocked) and refunds.

To make it easier to understand, Odaily provides an example. Suppose 1,000 ZAMA tokens are being sold via a sealed-bid Dutch auction, and three people participate: Alice, Bob, and Charlie.

First, during the bidding phase, the three participants bid as follows:

· Alice bids for 400 tokens at 5 USD each, paying a total of 2,000 USD;

· Bob bids for 600 tokens at 4 USD each, paying a total of 2,400 USD;

· Charlie bids for 300 tokens at 3 USD each, paying a total of 900 USD.

Next, after the bidding period ends, the auction smart contract allocates tokens to each participant in order from highest to lowest bid:

· Alice, with the highest bid, receives 400 tokens, leaving 600 tokens to be allocated;

· Bob, the second-highest bidder, receives 600 tokens. The remaining tokens to be allocated are now 0. Therefore, the final clearing price is Bob's bid, i.e., 4 USD per token;

· Charlie's bid is below the final clearing price, so he does not receive any allocation.

Finally, in the claiming and refund phase, the details are as follows:

· Alice receives 400 ZAMA tokens and a 400 USD refund;

· Bob receives 600 ZAMA tokens, with no refund;

· Charlie does not receive any ZAMA tokens but gets a full refund of his 900 USD.

The Last Interactive Opportunities Before TGE

Currently, you can still participate in Zama's guild tasks, which include:

Basic tasks: Get access to the Zama Discord. Join three out of four official communities to complete, and you can also join the official Discord channel to obtain a role.

New to Zama? Tasks: Consist of five sub-tasks, which are easy to complete by following the instructions.

Creator Program tasks: Include two sub-tasks. The first sub-task has a funding requirement, and the second is for the creator program.

Developer Program tasks: These have higher requirements and should be completed based on your own situation.

In addition, the OG NFT minting page will be open soon. Early participants should check if they are eligible when it opens.