Zaiffer unveils confidential token protocol after €2 million raise to bridge privacy and regulation in DeFi

Zaiffer, a Paris-based startup, has emerged from stealth with €2 million in funding, aiming to introduce a compliance-ready privacy layer to the decentralized finance (DeFi) world. Backed by investments from Zama, an open-source cryptography company, and Web3 venture builder PyratzLabs, Zaiffer is launching a new protocol called confidential tokens (cTokens). This development signifies a growing trend in Europe focused on privacy-preserving blockchain and DeFi infrastructure, with a goal of balancing innovation, compliance, and usability. Zaiffer's technology leverages Zama's fully homomorphic encryption (FHE) protocol, allowing computations on encrypted data without decryption. This is a crucial innovation to the industry. The new protocol allows any ERC-20 or EVM-compatible token to be "shielded" into a confidential version, hiding transaction amounts while preserving sender and receiver trails. Zaiffer’s transactions are capable of processing encrypted data in under five seconds, showing practical performance in the financial sector. This innovation could significantly impact both DeFi users and regulatory bodies, promising enhanced privacy while enabling selective disclosure for auditing and compliance. The project offers a "VPN for on-chain finance," enabling users to turn confidentiality on or off without leaving DeFi or changing wallets. This approach could facilitate broader blockchain adoption. The emergence of Zaiffer, alongside other European firms like Zama and TACEO, highlights a broader European push to bring innovation to the blockchain industry. This effort aims to make DeFi more confidential while remaining compliant with existing regulations.