Zama, Morpho and Steakhouse Financial are launching a new decentralized finance (DeFi) product that allows users to earn yield on private USDC holdings without revealing sensitive onchain data.
The new Steakhouse Confidential USDC Prime vault will go live on June 23 and is being described as the first DeFi yield product designed for confidential USDC on Ethereum. The vault enables users to deposit Zama’s encrypted cUSDC directly into Morpho’s existing Steakhouse USDC Prime vault while keeping balances, transaction amounts and investment activity hidden from public view.
JUST IN:
The First DeFi Yield Venue for Confidential USDC (cUSDC) in Partnership with @Morpho and @SteakhouseFi
The Zama Protocol made confidential tokens possible on Ethereum. The next step is giving them utility.
Vault opens June 23. pic.twitter.com/9m1lEVapzh
— Zama (@zama) June 17, 2026
Bringing privacy to DeFi yield
The launch introduces a new use case for confidential finance on Ethereum. Zama’s cUSDC uses fully homomorphic encryption (FHE), a technology that allows data to remain encrypted while still being processed.
Through the integration, users can convert regular USDC into cUSDC on Ethereum without moving funds to another blockchain. Once encrypted, the assets can be deposited into Morpho’s yield-generating vaults while maintaining privacy.
According to Zama co-founder and CEO Rand Hindi, the product marks the beginning of a new category of “confidential DeFi,” where users can access decentralized financial services without exposing their positions and strategies to competitors.
Institutions push demand for private DeFi exposure
The companies say privacy has become a growing requirement for institutional investors entering DeFi markets.
Morpho co-founder Merlin Egalite said many institutions have expressed concerns about operating on public blockchains where wallet balances and investment activity can be viewed by anyone. The integration with Zama’s encryption technology aims to address that challenge while allowing institutions to access Morpho’s lending and yield infrastructure.
Steakhouse Financial noted that its USDC Prime vault was built with liquidity and risk management in mind. The addition of Zama’s privacy layer gives investors access to the same strategy while reducing the risk of front-running and unwanted market visibility.
Zama expands confidential finance stack across Ethereum ecosystem
The launch follows a series of developments for both projects.
Last month, Zama acquired TokenOps to expand encrypted token distribution services for institutional issuers. Earlier this year, the company partnered with T-REX Network to bring confidential features to tokenized real-world assets using the ERC-3643 standard.
Meanwhile, Morpho recently completed a $175 million funding round backed by major crypto investors, including Paradigm, a16z crypto and Ribbit Capital, valuing the protocol at approximately $2 billion.
The new confidential USDC vault is expected to strengthen Ethereum’s growing institutional DeFi ecosystem by combining privacy, compliance and yield generation in a single product.
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