Zaiffer, a Paris-based confidential finance startup, has emerged from stealth with a €2 million raise and a clear mission, rebuild privacy in the decentralised finance ecosystem without putting itself at odds with regulators. Backed by open-source cryptography firm Zama and Web3 venture builder PyratzLabs, the company is introducing a new primitive it calls confidential tokens, or cTokens, designed to make privacy a selectable, compliant layer across Ethereum-compatible networks.

The pitch is simple, and timely. As DeFi grows more complex and more institutional money circles the sector, the absence of a reliable confidentiality framework remains a fundamental barrier. Zaiffer positions itself as the missing layer, a protocol that lets users shield token amounts while preserving address trails, with the option to reveal information to auditors, exchanges, or regulators only when required.

The technology behind this shift comes from Zama. Fully homomorphic encryption has long promised the ability to compute on encrypted data, but has historically been too slow for real-world finance. Zaiffer and Zama argue they have crossed that threshold. Their implementation can process encrypted transactions in under five seconds on a decentralised computation network, enabling day-to-day use cases such as confidential payrolls, OTC trades, stealth treasury operations, and cross-border financial flows.

Europe is becoming a serious hub for these encryption-led DeFi experiments. French cryptography firm Zama raised €49 million earlier this year to scale FHE for public blockchains. Austria’s TACEO secured €4.8 million for encrypted collaboration tools, and the UK’s BOB pulled in €8.1 million to connect Bitcoin with EVM-based DeFi. Together with Zaiffer’s raise, 2025 has seen almost €62 million flow into privacy-enhanced DeFi infrastructure across Europe.

Where Zaiffer stands out is usability. cTokens can be deployed with any ERC-20 or EVM-compatible asset, turning, for example, USDC into cUSDC or ETH into cETH. No new wallets, no bridges, no migration to privacy chains. The protocol is meant to plug directly into existing DeFi products, making confidentiality a toggle rather than a separate ecosystem.

The selective-disclosure model is central to its regulatory argument. Transactions remain private on-chain, but users can grant temporary access to balances or reveal proofs to compliance teams. It is a structure aimed squarely at institutions hesitant to touch mixers or privacy coins for audit reasons.

The timing matters. DeFi has regained momentum among traditional finance players, but the need for auditability has kept large volumes on the sidelines. Zaiffer believes its blend of FHE and compliance tooling can unlock new flows, particularly in corporate treasury activity and regulated financial environments.

A public demo is already live on the Sepolia testnet. The company expects a full mainnet rollout and SDK release by November 2025, including support for confidential AMMs, lending, borrowing, and perpetuals. The €2 million will go toward product development, regulatory integrations, and partnerships as Zaiffer positions itself as a foundational layer for encrypted DeFi.