Zama Presents Innovative Staking System with Square Root Distribution

In early February, Zama revealed the details of its network participation protocol based on DPoS (Delegated Proof of Stake). The system allows ZAMA token holders to delegate their assets to specialized operators who maintain the network infrastructure. According to BlockBeats, the current structure supports 18 active operators — 13 responsible for the Key Management Service (KMS) and 5 acting as co-processors for Fully Homomorphic Encryption (FHE). The reward protocol was designed to balance efficiency with decentralization.

Infrastructure and Delegation Model

Zama’s architecture separates operators into two main categories, each with specific roles in network security and processing. Participants can delegate their ZAMA capital to any operator, sharing the gains generated by maintaining the infrastructure. This flexible model allows new competitive operators to enter the market without excessive minimum size barriers.

Prize Distribution: Square Root as an Equity Mechanism

The most innovative aspect of the system lies in how staking rewards are distributed. Zama uses the square root of the total staked amount in each operator as the basis for calculation, creating a powerful mathematical effect: smaller operators generate proportionally higher returns for their delegates. This means an operator controlling half of the capital can generate only √50% ≈ 70.7% of the rewards — naturally encouraging delegation distribution among multiple operators. This square root-based mechanism promotes network democratization without artificial restrictions.

Total rewards derive from an inflation mechanism with a fixed annual rate of 5% of the initial total ZAMA supply. Of this allocation, 60% goes to KMS operators and their delegates, while 40% is allocated to FHE co-processors. After operators deduct a commission (up to 20%), the remaining rewards are proportionally distributed among all delegates according to their staked volume.

Withdrawal Flexibility and Liquid Staking Certificates

Fund unlocking requires a 7-day unbonding period — a safeguard against vote manipulation. However, Zama offers a practical alternative: users can transfer or trade liquid staking certificates before the end of the waiting period, combining security with liquidity.

Current ZAMA data (February 13, 2026):

• Price: $0.02
• Circulating supply: 2.2 billion tokens
• Total supply: 11 billion tokens
• 24h change: +14.96%

Zama’s protocol demonstrates how sophisticated mathematical mechanisms — particularly square root distribution — can solve real centralization problems without sacrificing operational efficiency.