Open-source cryptography firm Zama has raised $73 million in Series A funding to develop applications based on fully homomorphic encryption (FHE), a technology that enables data to be processed without decrypting it – potentially useful for protecting privacy in blockchain and AI.

The funding round was led by Multicoin Capital and Protocol Labs, Zama announced via email on Thursday. Participating investors included Solana co-founder Anatoly Yakovenko, Filecoin founder Juan Benet and Ethereum and Polkadot co-founder Gavin Wood, according to a press release.

Zama, started in 2020, describes FHE as the "holy grail" of cryptography, allowing companies to offer services to users without the need to see their data and expose it to greater risk. Zama's most recent product, fhEVM, is a confidential smart contract protocol for Ethereum-compatible blockchains, allowing on-chain data to remain end-to-end encrypted during processing.

Kyle Samani, managing partner of Multicoin, said in the press release that FHE was "the most important foundational cryptographic primitive for the next decade of computing."

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