Zama Presents Innovative Staking System with Square Root Distribution

Zama recently revealed details of its network staking mechanism, introducing an innovative approach based on square roots to ensure a more equitable distribution among participants. According to the disclosed information, the protocol uses a Delegated Proof of Stake (DPoS) system, allowing investors to delegate their ZAMA tokens to operators responsible for maintaining the network infrastructure.

DPoS Architecture and Network Operators

The system operates with a clearly defined structure: currently, 18 operators manage the network, with 13 specialized in Key Management Service (KMS) and 5 in Fully Homomorphic Encryption (FHE). This division reflects the technical complexity required to maintain the security and functionality of Zama, a leading project in encryption solutions and privacy computing.

Operators serve as essential validators, with delegates trusting their tokens to these nodes to participate in the network’s validation and security processes, creating a collaborative ecosystem.

Square Root-Based Reward Model

Zama’s reward mechanism is where its innovation truly stands out. The protocol establishes a fixed annual inflation rate of 5% of the total ZAMA supply, with this additional supply strategically distributed among operators and their delegates.

The distribution follows a specific formula: 60% of the rewards go to KMS operators and their delegates, while 40% go to FHE co-processor operators. What sets this model apart is the use of the square root of the total staked amount by each operator. This mathematical calculation promotes a powerful decentralizing effect: the smaller the operator, the higher the proportional returns for those delegating to it.

This approach incentivizes delegates to distribute their tokens among smaller operators rather than concentrating them in a few large nodes, naturally strengthening network decentralization.

Operators charge a management fee capped at 20%, with the remaining distributed proportionally among all delegates according to their contributions.

Unstaking Mechanism and Liquidity

An important aspect for participants is the flexibility offered in fund withdrawal. The protocol establishes a 7-day unbonding period to release staked tokens. However, Zama has implemented a practical solution for this wait: users can transfer or trade liquid staking certificates without waiting for the unbonding period, maintaining liquidity even during the lock-up.

This feature represents an advancement over many traditional staking protocols, which enforce total asset locking for predetermined periods.

Market Performance and Outlook

Reflecting the ecosystem’s dynamism, the ZAMA token shows positive movement, trading at $0.02 with a 3.63% increase in the last 24 hours (as of February 14, 2026). With a circulating supply of 2.2 billion tokens and a total supply of 11 billion, the market distribution remains in development.

The square root distribution staking system positions Zama as a prominent project in cryptography, offering both technical security and economic efficiency for its participants.