Zama Protocol Testnet Update: MPC Partners, Better Performance, Audits and New Features

On July 1st, we launched the public testnet of the Zama Confidential Blockchain Protocol, the most developer friendly, fast and secure Fully Homomorphic Encryption (FHE) scheme onchain that enables confidential smart contracts on top of any L1 or L2. You can learn more in the original announcement blog and the litepaper.

Since then, the testnet has seen strong traction and real usage across the ecosystem:

Over 1,200,000 encrypted transactions processed
More than 19,000 confidential contracts deployed
120,000+ active wallets interacting with the protocol
20+ partners building applications and integrations

Explore full network activity on the Zama Protocol Dune Dashboard and discover community projects on the Zama Ecosystem page.

Over the past four months, the Zama team has continued to refine the protocol on its path toward mainnet. The latest release, FHEVM v0.9, marks the first mainnet release-candidate, introducing major architectural and performance upgrades across the protocol stack to further enhance performance, decentralization, and developer experience.

In particular, the testnet threshold key generation and decryption is now done by a network of 13 MPC nodes, bringing true decentralization to the Zama Protocol, with additional nodes to join in the future. All components of the protocol were independently audited for both cryptographic and implementation-level security. The update also delivers a 10× improvement in decryption performance, along with multiple new features and enhancements across the protocol stack.

Let’s take a closer look at the improvements and new features.

Production-grade MPC network with 13 Independent nodes

The latest testnet deployed on FHEVM v0.9 marks a major milestone on the Zama Protocol’s path toward mainnet: the critical Threshold Key Management Service (TKMS) is now operated by 13 independent MPC nodes.

These 13 nodes are run by highly reputable organizations, securing over $100b outside of Zama. Partners include Ledger, Fireblocks, Unit 410, DFNS, Conduit, Layer Zero, Open Zeppelin, Etherscan, P2P, Luganodes, Figment, Artifact, Omakase, Stake Capital, Blockscape and Infstones.

Key generation and decryption are now also resilient to nodes going offline or being malicious. As long as ⅔ of the operators are running the correct software and are online, decryption is guaranteed to be correct. To our knowledge, this is the first robust MPC protocol to go into production with such a large and diverse set of independent nodes.

A key engineering achievement that made this milestone possible is the full onchain integration of FHE key generation. In previous testnet versions, key generation was triggered manually offchain, a temporary solution suitable for early testing, but not for a decentralized mainnet.

With this release, Distributed Key Generation (DKG) has been fully implemented and can now be triggered onchain through the Gateway. This enables decentralized and verifiable key generation, ensuring that no single party can control or manipulate the process.

Using the onchain DKG and our network of MPC operators, we successfully completed the first onchain MPC key generation, with all decryptions functioning exactly as designed, validating the reliability and robustness of the protocol.

10x Performance boost for decryptions

The latest testnet delivers a 10× performance boost, especially in one of the most critical operations of the Zama Protocol: Decryption.

In the protocol, decryption is a key step that enables encrypted data to be revealed or re-encrypted securely when needed. There are two types of decryption:

User decryption: when a user wants to access their private data without exposing it onchain, by re-encrypting it under their own public key. For example, a user may want to check the amount of their encrypted balance.
Public decryption: when a user wants everyone to see the clear value corresponding to a ciphertext. For instance, revealing the result of a private auction.

All decryption requests are handled by the Gateway, which emits an event once each request is processed. To benchmark performance, we sent bursts of 100 concurrent decryption requests to the Gateway and measured the total processing time. Compared to the previous versions, we achieved a 6.6× improvement for public decryption and a 19.2× improvement for user decryption, a major step forward in bringing scalable performance to the Zama Protocol.

Comprehensive audit over the entire protocol

All components of the Zama Protocol were fully audited, including the TFHE-rs library, KMS software and protocols, the coprocessor, the gateway, and all supporting infrastructure, along with the upcoming $ZAMA token and all staking and governance contracts.

Both the cryptographic design and the implementation underwent independent review.

Nearly 70 audit-weeks, representing several million dollars of work, were dedicated to assessing the protocol. This makes the Zama Protocol audit effort the largest ever for a first protocol release in Web3, and establishes TFHE-rs as the first and only professionally audited FHE library.

The protocol is also the first cryptographic protocol in the world to achieve 128-bit security under the strong_IND-CPAD model, providing formal guarantees against all known cryptographic attacks, including those from quantum computers.

Audits were conducted by leading experts in the field, including Trail of Bits, Zenith, OpenZeppelin, Burrasec, and the Alexandra Institute.

New features & Improvements

On top of these performance improvements, this release also introduces a number of new features and enhancements since the first testnet launched on July 1st：

Performance
- Lower gas costs: User decryption shares are now included in the UserDecryptionResponse event instead of being stored onchain, significantly reducing gas usage since each share (~1 KB) is submitted by 13 MPC nodes.
- Optimized transaction flow: The KMS now uses EIP-7966 ([.c-inline-code]eth_sendRawTransactionSync[.c-inline-code]) to send transactions to the Gateway, improving receipt fetching and reducing the RPC load previously caused by polling.
- Configurable workload management: The KMS now separates workloads and introduces configurable thread pools, allowing operators to fine-tune performance based on available hardware.
- Lower network latency: The Gateway now runs on Conduit’s G2 sequencer, relocated to Europe to minimize latency and improve responsiveness.
Post-quantum upgrade: The protocol now uses ML-KEM512, a post-quantum cryptographic scheme, resulting in faster and smaller user decryption shares.
Security
- Enhanced confidentiality: All transaction inputs (including state) are now re-randomized before FHE evaluation, achieving sIND-CPA-D security — an even stronger model of protection.
- Pause mechanism: A pausing feature has been implemented for both the Host and Gateway smart contracts. Any protocol operator can temporarily pause the protocol in case of an emergency.
- Secure key backups: KMS cores can now securely back up private FHE key shares to custodians for disaster recovery. In case of data loss, there is now a verifiable and auditable way to restore key material, without compromising privacy.
- MPC over TLS: MPC nodes now communicate using enclave-attestation-based TLS, ensuring communication only happens between nodes that are part of the protocol and running the correct version of the MPC software

For more technical details, see the full change logs of FHEVM and KMS.

To update your applications, refer to the Migration Guide for instructions on migrating your dApps to the latest testnet running on FHEVM v0.9.

What’s next?

With this update, the Zama Protocol is now running with a faster and fully decentralized MPC network, operated by 13 independent partners, bringing true scalability and resilience to confidential computation.

The next milestone is the mainnet launch by the end of the year, which will officially establish the most advanced confidentiality protocol, using the most secure and robust threshold KMS to date.

Following mainnet, the team will focus on expanding the protocol’s functionality and governance, as well as add support for multiple chains beyond Ethereum.

Stay tuned for more updates as we approach mainnet launch.