Zama’s public auction dropped into the market with a number that almost didn’t make sense: a $55M fully diluted valuation for a project that just a few months earlier raised at a $1B unicorn valuation.
The immediate question across Telegram chats, trading desks, and private groups was the same:
How can the first real FHE mainnet — with Pantera, Blockchange, Multicoin, and Naval behind it — be priced like an early-stage gamble?
This isn’t a typical ICO. It’s a sealed-bid Dutch auction built entirely on Zama’s own privacy tech. And the mechanics of that design are exactly what create this unusual pricing window.
Source: https://dropstab.com/coins/zama — Zama investors list
Let’s break down why the market cares, how the auction works, and what participants are actually betting on.
The Setup: A Unicorn Valuation Meets a $55M Public Floor
Zama’s Series B in June 2025 locked in a $1B+ valuation and cemented it as the first true unicorn in the fully homomorphic encryption (FHE) space. More than $150M in funding backed its push to bring encrypted computation to Ethereum and beyond.
Yet the public auction floor price?
$0.005 per token — a $55M FDV.
That’s a 94% discount to where institutional investors entered.
Source: https://dropstab.com/coins/zama — Zama fundraising rounds
The gap is so wide that most traders assumed there had to be a catch. There isn’t. Private rounds priced in years of pre-mainnet uncertainty. The public sale is happening after the chain shipped, when Zama’s tech is live, battle-tested, and producing numbers no other FHE team is close to.
It’s extremely rare in crypto for the public market to see the best risk-adjusted entry.
How Zama’s Sealed-Bid Auction Actually Works
Traditional ICOs leak information everywhere. Bids hit the mempool, bots swarm, whales front-run each other, and the whole event turns into a gas war.
Zama flips this dynamic.
1. Users shield funds into ERC-7984 confidential stablecoins
Participants move USDC, USDT, or DAI into ERC-7984 tokens through the Zama app or Bron.org.
Only the incoming transaction is public — everything after becomes encrypted.
Many users shield a bit more than planned to avoid signaling their true bid size.
2. All bids are encrypted
During Jan 12–15, participants submit their sealed bids.
The chain sees nothing but ciphertext — no bid size, no price, no intent.
Everyone who wins pays the same clearing price: the lowest successful bid across the entire auction.
3. Clearing sets one fair price
After bidding closes, the contract sorts all encrypted bids from highest to lowest and fills them until 1.1B tokens run out. Bid high and you’re in; bid too low and you’re out.
Here’s the catch: Bidding high doesn’t cost more. Everyone settles at the clearing price.
This is why sealed-bid auctions reward conviction and punish underbidding.
4. Tokens unlock immediately on January 20
No cliffs. No vesting. No slow drips.
Whatever you win becomes tradable immediately.
This detail alone has driven major interest — no one wants to wait 12–48 months to touch their allocation.
Understanding the Price Curve: Why $0.005 Isn’t the Real Number
The auction floor is only that — a floor.
The question is where the market believes Zama belongs.
Source: https://www.zama.org/ — Zama public auction
Here are the anchor points shaping the conversation:
$0.005 floor — 94% discount vs. Series B$0.01 — doubles the raise, still an 89% discount$0.02 — ~$220M FDV; many funds call this the “rational baseline”$0.05 — institutional comfort zone$0.09 — where public buyers touch Series B valuations
Bid above $0.01–$0.02 and you capture most scenarios:
If demand is strong, you get filled anyway → at the clearing priceIf demand is weak, you’re buying at one of the deepest discounts in recent memory
That asymmetry — low downside, high convexity — is why this auction is getting attention.
The Bigger Bet: Zama’s Technical Curve Is Ridiculous
Pricing alone isn’t the story.
The story is throughput.
Zama has published its FHE performance trajectory, and it looks almost unreal:
1 TPS (2022)10 TPS (2024)100 TPS (2025)1,000+ TPS (2026)10,000+ TPS with dedicated ASIC hardware
For comparison:
Ethereum L1 remains ~15 TPS.
Source: https://www.zama.org/ — Zama is the fastest FHE protocol
This is what buyers are really betting on — a future where confidential computation becomes as normal as smart contracts, and where Zama is the default backend powering that world.
If that happens, the $55M floor will look quaint.
How to Join the Zama ICO (Simple Version)
Shield USDC/USDT/DAI into ERC-7984 confidential tokens through Zama or Bron.org.Submit your sealed bid anytime Jan 12–15.Wait for the clearing price announcement on Jan 19.Claim unlocked ZAMA tokens on Jan 20.
That’s it. No vesting. No phased unlock.
This article is part of DropsTab Research.
Why Zama’s ICO Might Be the Most Mispriced Sale in Crypto Right Now was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.