Zama launching token sale at $55 million floor FDV via CoinList and own auction app

Zama, a crypto privacy protocol that adds a layer of confidentiality to public blockchains, is launching an onchain token sale with a $55 million fully diluted valuation (FDV) floor via CoinList and its own auction app, using a sealed-bid Dutch auction structure to distribute 12% of its total 11 billion token supply.

The 12% sale is split across three components, Zama co-founder and CEO Rand Hindi told The Block. A 2% community sale to Zama’s NFT holders is taking place this week ahead of the main auction, an 8% sealed-bid Dutch auction will run from Jan. 21 to Jan. 24 with CoinList, and a final 2% post-auction sale will take place between Jan. 27 and Feb. 2 at the auction clearing price, Hindi said.

While CoinList is a distribution partner for the main auction, the sale is not exclusive to the platform. Participants can also place bids through Zama’s own auction app.

“CoinList is adding bids to the Zama auction, but Zama also collects bids,” Hindi said. “Only the main auction for 8% is with CoinList. The rest is outside.”

In total, the full 12% token sale runs on Zama’s auction infrastructure, with CoinList serving as one access point rather than the sole venue, Hindi said.

The main auction will be conducted as a sealed-bid Dutch auction on the Ethereum mainnet. Bids are filled from highest to lowest price, with the lowest price at which tokens are allocated becoming the clearing price that all successful bidders pay. The auction has a floor price of $0.005 per token, implying a $55 million FDV based on ZAMA’s total supply.

CoinList’s first onchain token sale

Notably, the Zama sale marks CoinList’s first fully onchain, non-custodial token sale, Scott Keto, president of CoinList, told The Block.

“Most sales [historically] leveraged our custodial infrastructure. We collected all the funds on behalf of the projects and investors in our custody system,” Keto said. “In this new paradigm, investors are participating directly onchain.”

CoinList said all users now receive a non-custodial wallet by default, allowing them to interact directly with project smart contracts rather than through CoinList-held accounts. Keto added that CoinList plans to conduct all future token sales fully onchain, though the underlying technology may vary depending on the project and ecosystem.

The Zama auction is also a live use case of the protocol’s fully homomorphic encryption technology, which allows computation on encrypted data. While the auction is executed onchain, bid quantities remain end-to-end encrypted, preventing participants from seeing each other’s positions while preserving onchain auditability, according to Zama.

“For too long, the ‘public’ nature of blockchains has meant a total sacrifice of privacy, forcing users to choose between transparency and confidentiality,” Hindi said. “By running this sale fully onchain using Zama’s FHE technology, we are proving that you can have both.”

Hindi said the token sale should be viewed as a distribution mechanism rather than a capital raise, as Zama’s mainnet is already live and the token will be immediately usable upon distribution.

“It’s technically not a raise,” Hindi said. “It’s a sale to users and validators, so more like a distribution mechanism to seed the token holder base.”

Tokens purchased in the auction will be fully unlocked and immediately usable within the Zama Protocol, including for paying encryption and decryption fees, staking as an operator, or delegating to existing operators. Claiming is scheduled for Feb. 2.

The sealed-bid structure removes time pressure and visibility into other participants’ bids, limiting front-running, gas wars, and last-second sniping, according to Zama. There is no upper bound on the final FDV, though Keto said higher clearing prices would require proportionally larger capital commitments.

Zama said that while individual bids in the main auction are uncapped, only 8% of the supply is available through that auction, with the remaining 4% reserved for community and post-auction participants. Hindi added that in practice, large buyers are typically disincentivized from overbidding.

Zama has previously raised more than $150 million from investors, including Multicoin, Pantera, and Protocol Labs. Its most recent funding round valued the company at over $1 billion on an equity basis.

Hindi said that if the auction proves successful, Zama plans to open its auction infrastructure to other projects seeking similar onchain distribution models.

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