CoinList Hosts Zama Token Sale With $55M Fully Diluted Valuation

Zama, a crypto privacy protocol, announced a token sale with a $55 million fully diluted valuation floor via CoinList and its own auction app. The sale will use a sealed-bid Dutch auction structure to distribute 8% of the 11 billion ZAMA token supply between January 21 and January 24. Tokens will be claimable on February 2. Zama’s CEO, Rand Hindi, emphasized that the auction is not exclusive to CoinList, as participants can also place bids through Zama’s auction app.

The Zama token sale marks CoinList’s first fully onchain, non-custodial token sale, according to Scott Keto, CoinList’s president. Unlike previous custodial sales, the new model allows investors to interact directly with smart contracts on the Ethereum mainnet. This shift is expected to become the standard for future CoinList token sales.

The auction will use Zama’s fully homomorphic encryption (FHE) technology to ensure bid privacy. This technology allows for encrypted data computation, ensuring participants cannot see each other’s bids while maintaining onchain transparency. The structure is designed to prevent front-running and gas wars.

Why the Move Happened

Zama’s CEO Rand Hindi explained that the token sale should be viewed as a distribution mechanism rather than a capital raise. He noted that Zama’s mainnet is already live, and the token will be immediately usable upon distribution. This approach aligns with Zama’s mission to provide privacy on public blockchains without sacrificing transparency.

The sale is structured across three components: a 2% community sale for NFT holders, an 8% sealed-bid Dutch auction with CoinList, and a 2% post-auction sale at the clearing price. The sealed-bid auction will be conducted on the Ethereum mainnet, with the lowest price at which tokens are allocated becoming the clearing price for all successful bidders.

How Markets Responded

The Zama token sale has drawn attention from major investors, with the company having previously raised over $150 million from firms like Multicoin, Pantera, and Protocol Labs. The most recent funding round valued Zama at over $1 billion on an equity basis. Hindi stated that if the auction proves successful, Zama plans to open its auction infrastructure to other projects seeking onchain distribution models.

Investors are also reacting positively to the broader privacy coin market. Monero (XMR), another privacy-focused cryptocurrency, has surged in value, surpassing $700 to hit a new all-time high. The coin’s global open interest has risen to $291 million, up 150% in five days. Analysts suggest that the increased focus on privacy and encryption is driving renewed interest in the space.

What Analysts Are Watching

Analysts are closely watching the success of Zama’s sealed-bid auction as a potential model for future token sales. The use of FHE technology is a novel approach that could influence how onchain privacy is implemented. If the model proves scalable, it may be adopted by other projects seeking to balance transparency and confidentiality.

Market participants are also monitoring the impact of the Zama token sale on the broader crypto ecosystem. As privacy coins gain traction, investors are looking for clear signals on which protocols can maintain long-term value. Analysts at KeyBanc, for instance, have shown cautious optimism about strategic moves in the education and tech sectors, although their focus on Zama remains limited to onchain developments.

Zama’s CEO emphasized that the auction is intended to seed the token holder base rather than raise capital. This approach reflects a broader trend in the crypto industry, where projects are increasingly prioritizing onchain governance and community-driven value creation.

The token sale is a live demonstration of Zama’s FHE technology, which Hindi claims proves that blockchain transparency and user privacy can coexist. This aligns with growing investor demand for solutions that address privacy concerns on public blockchains.

Zama’s auction is expected to set a precedent for future onchain sales, particularly in the privacy sector. By combining encryption with transparency, Zama is demonstrating a new standard for token distribution that could reshape how onchain projects engage with their communities.