Paris-based confidential finance startup Zaiffer has emerged from stealth with €2 million and a mission to bring a compliance-ready layer of privacy to the decentralised finance (DeFi) world.
Backed by a joint investment from open-source cryptography company Zama and Web3 venture builder PyratzLabs, the newly created venture is launching what it calls a breakthrough primitive for decentralised finance – confidential tokens, or cTokens.
“Our mission has always been to help builders scale the next generation of Web3 companies,” said Bilal El Almay, co-founder and CEO, Zaiffer. “Think of Zaiffer as the VPN for on-chain finance: confidentiality you can turn on or off, without leaving DeFi or changing wallets. It is a protocol that balances innovation, compliance, and usability. We are proud to partner with Zama to help bring confidential DeFi to market.”
Zaiffer’s investment positions it within a broader 2025 European trend focused on privacy-preserving blockchain and DeFi infrastructure.
In France, fellow Paris-based cryptography company and investor Zama raised €49 million to commercialise fully homomorphic encryption (FHE) for public blockchains – the same core technology powering Zaiffer’s confidential token layer. Austria’s TACEO secured €4.8 million to expand its “Private Shared State” system for encrypted data collaboration, which includes applications for DeFi and regulated financial environments. In the UK, BOB raised €8.1 million to build a hybrid Layer-2 network bridging Bitcoin with DeFi protocols.
Altogether, these 2025 rounds account for roughly €61.9 million in funding across privacy-enhanced or cryptography-driven DeFi infrastructure in Europe.
The presence of both Zaiffer and Zama in Paris highlights France’s emerging strength in encryption-based blockchain innovation, particularly in applying FHE to decentralised financial systems.
Zaiffer’s smaller, targeted raise contrasts with Zama’s larger push, but both share the same technological and regulatory ambition: to make DeFi more confidential while remaining compliant.
Founded in 2025 in Paris, Zaiffer builds on Zama’s FHE technology, which enables computations on encrypted data without ever needing to decrypt it. Using Zama’s FHE protocol – a decentralised computation network -Zaiffer’s transactions can process encrypted data in under five seconds, bringing practical performance to a technology often dismissed as too slow or theoretical for real-world financial use.
“FHE is ready for mainstream applications. With Zaiffer, we demonstrate FHE’s ability to power real-world financial infrastructure, combining confidentiality with regulatory compatibility. This is a turning point for blockchain adoption,” said Rand Hindi, CEO at Zama.
The new protocol allows any ERC-20 or EVM-compatible token to be “shielded” into a confidential version (e.g., USDC to cUSDC, ETH to cETH), hiding transaction amounts while preserving sender and receiver trails.
These cTokens offer users selective disclosure features for auditors, exchanges or regulators, thereby threading the needle between privacy and compliance in a blockchain world still grappling with the tensions between transparency and confidentiality.
This level of encryption allegedly enables not only privacy-preserving token transfers but also complex financial operations such as confidential payrolls, OTC trades, cross-border payments, and stealth-mode treasury management. Users can selectively reveal balances or grant access to third parties temporarily, making it suitable for audit-ready use cases like AML compliance and regulatory screening.
Importantly, Zaiffer operates without needing new wallets, bridges, or changes to existing DeFi infrastructure – a key usability advantage that could boost adoption among both retail users and institutions.
The launch is timely, as institutions continue to show interest in DeFi but remain hesitant due to the lack of robust confidentiality features. The company says that existing solutions like mixers or privacy coins pose audit challenges or require migration to alternative chains.
Zaiffer aims to fill this void with a universal confidentiality layer for Ethereum-compatible tokens, aligning with regulatory needs while preserving DeFi’s openness.
A demo of Zaiffer is already live on the Sepolia testnet, with a full mainnet rollout and SDK integration expected by November 2025. This upcoming launch will include tools to embed cToken features directly into DeFi products. The roadmap also includes confidential AMMs, lending, borrowing, and perpetuals.
The €2 million funding is earmarked for product development, regulatory integrations, and growth initiatives as Zaiffer positions itself as the confidentiality layer of the DeFi economy.
Zaiffer’s approach could redefine the baseline for privacy in decentralised finance, offering users and institutions a middle ground between full transparency and off-chain opacity – without compromising either innovation or regulation.
Read the orginal article: https://www.eu-startups.com/2025/11/zaiffer-unveils-confidential-token-protocol-after-e2-million-raise-to-bridge-privacy-and-regulation-in-defi/
