TheBlock
Zama, Morpho and Steakhouse Financial are launching the Steakhouse Confidential USDC Prime vault on Ethereum, the first DeFi yield product that wraps a fully homomorphic-encrypted USDC into an established lending strategy. Deposits open June 23 via the Zama app, with the underlying tokens settling directly on Ethereum mainnet rather than bridging to a separate confidentiality chain.
The product lets holders of Zama's encrypted cUSDC deposit into Morpho's existing Steakhouse USDC Prime vault and earn yield while keeping balances, transfer sizes and strategy details shielded from public mempool observation. "Until now, operating on a public blockchain meant exposing your entire financial playbook to your competitors," Zama co-founder and CEO Dr. Rand Hindi told The Block, calling the launch the official start of a confidential DeFi category on Ethereum.
Why it matters
Confidentiality has been the missing piece for institutions that want onchain yield but refuse to publish their positions. Zama's FHE stack shields balances and transfer amounts while preserving auditability and compliance checks — a structural fit for Morpho's institutional users, according to Morpho co-founder Merlin Egalite, who said confidentiality has been a consistent signal from prospective allocators. Steakhouse co-founder Sébastien Derivaux framed the integration as letting institutions access the same liquid, risk-conscious strategy without broadcasting activity to competitors or front-runners.
The vault also lands against a backdrop of momentum: Morpho closed a $175 million round this month co-led by Paradigm, a16z crypto and Ribbit Capital at roughly a $2 billion valuation, with Apollo, Circle Ventures and VanEck participating. Zama separately acquired TokenOps last month to extend encrypted distributions to institutional issuers and partnered in March with Apex Group-backed T-REX Network to bring its FHE layer to ERC-3643 tokenized real-world assets.
Frequently asked questions
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What is the Steakhouse Confidential USDC Prime vault?
It is a DeFi yield vault on Ethereum that wraps Zama's fully homomorphic-encrypted cUSDC into Morpho's existing Steakhouse USDC Prime strategy, letting depositors earn yield without exposing balances, transfer sizes or strategy onchain.
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How does Zama's cUSDC keep transactions confidential?
Zama's cUSDC uses fully homomorphic encryption to shield balances and transfer amounts while preserving auditability and compliance checks, converting standard USDC directly on Ethereum mainnet without requiring a bridge to another chain.
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When do deposits for the new vault go live?
Deposits for the Steakhouse Confidential USDC Prime vault open on June 23 via the Zama app, according to the teams involved.
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Why does institutional DeFi need onchain confidentiality?
Morpho co-founder Merlin Egalite said institutional demand for onchain confidentiality has been a consistent signal from prospective users, since publishing positions, sizes and strategy on a public mempool exposes institutions to front-running and competitive intelligence leakage.
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What risks does the confidential vault inherit?
The vault inherits the credit and liquidity profile of Steakhouse's oldest Morpho USDC vault rather than spinning up new markets, concentrating exposure on USDC borrow demand and the broader Morpho Steakhouse strategy.
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