Zaiffer Raises €2 Million to Bring Privacy and Compliance to DeFi Transactions

Zaiffer, a newly launched Paris‑based decentralized finance (DeFi) startup, has emerged from stealth with a €2 million funding round aimed at bringing privacy and regulatory compliance to on‑chain finance through innovative cryptography and token design. The investment, announced in November 2025, was jointly provided by open‑source cryptography firm Zama and Web3 venture builder PyratzLabs — positioning Zaiffer at the intersection of DeFi innovation and privacy‑preserving financial infrastructure.

Founded in 2025, Zaiffer is developing what it calls a confidential token protocol designed to conceal transaction amounts on public blockchains while preserving auditability, audit trails and compliance capabilities that are critical for institutional participation. The protocol builds on the concept of “confidential tokens” (cTokens), which allow any ERC‑20 or Ethereum Virtual Machine (EVM)‑compatible token to be wrapped into a privacy‑enabled version such as cUSDC, cETH or cWBTC without requiring new wallets, bridges or fragmented liquidity.

According to the company’s founders, this technology aims to strike a balance between blockchain transparency and user privacy — a tension that has historically posed barriers to broader institutional adoption of DeFi. Traditional public blockchains expose transaction amounts and wallet balances to all onlookers, raising competitive‑intelligence and data‑leakage concerns for professional traders, corporates and regulated financial entities. Zaiffer’s approach seeks to mitigate these barriers by keeping amounts encrypted on‑chain while retaining verifiable sender and receiver trails that can be selectively disclosed to auditors, exchanges or regulators when needed.

At the technical heart of Zaiffer’s protocol is Fully Homomorphic Encryption (FHE) — advanced cryptographic methods that allow computations to be performed on encrypted data without ever decrypting it. Zaiffer leverages the FHE protocol developed by Zama to enable encrypted transactions that complete in under five seconds, according to company statements. By processing encrypted values end‑to‑end, Zaiffer’s infrastructure maintains confidentiality at the protocol level, enabling use cases that range from private swaps and over‑the‑counter trades to confidential payrolls, cross‑border payments and shielded treasury management.

Bilal El Almay, co‑founder and CEO of Zaiffer, has described the protocol as a “VPN for on‑chain finance” — a metaphor that underscores the startup’s mission to give users control over when and how their financial activity is visible or private within the DeFi ecosystem. El Almay emphasizes that the project seeks to deliver this privacy while preserving compatibility with existing DeFi applications and global compliance frameworks.

The €2 million funding round reflects a strategic collaboration between investors with complementary strengths. Zama brings deep expertise in homomorphic encryption and cryptographic research, while PyratzLabs contributes venture‑building experience and go‑to‑market support to help accelerate adoption among developers, enterprises and financial institutions. Together, these backers aim to support Zaiffer’s roadmap toward mainnet launch and broader ecosystem integration.

Industry observers note that privacy‑focused DeFi infrastructure has been gaining momentum, particularly in Europe where evolving crypto regulations such as the Markets in Crypto‑Assets (MiCA) framework are shaping how privacy and compliance are balanced on public blockchains. Zaiffer’s raise places it within a broader trend of cryptography‑driven startups exploring privacy layers that do not compromise regulatory obligations or interoperability with mainstream financial systems.

Zaiffer’s development progress includes a live demo on the Sepolia testnet and plans for a full mainnet rollout with an accompanying software development kit (SDK) that will allow partners to embed confidential features directly into their products. The startup’s roadmap also envisions extensions of the confidential primitives to automated market makers (AMMs), lending, borrowing and perpetual markets — essential components of a robust DeFi ecosystem that could benefit from privacy controls.

The funding is earmarked to accelerate product development, regulatory integrations and growth initiatives as Zaiffer positions itself as a foundational privacy layer for the next generation of DeFi infrastructure. With its unique blend of encryption technology and compliance‑ready design, the company aims to appeal to both retail users and institutional actors seeking secure, private and auditable financial solutions on public blockchain networks.

As DeFi continues to evolve, Zaiffer’s early backing and privacy‑centric vision may set a precedent for how confidentiality and transparency coexist in decentralized systems — potentially unlocking greater institutional trust and adoption across global markets.