Encrypting ZFS in Proxmox is not supported out-of-the-box with Proxmox.
In this guide we will not encrypt the entire installation but only the rpool/data where the vm disks are stored. The goal is to have a user friendly but still a secure solution.
Therefor you are still able to power on or reboot the server and log into proxmox without the need for rmm of simular software solution like Dropbear to decrypt your drive first.
Log into Proxmox, start the shell and decrypt the rpool/data with your encryption key.
Your VM's won't start untill you decrypt the rpool/data.
This guide will explain how to encrypt the rpool/data on a Proxmox Server with already VM's running on it and also for a newly installed proxmox server.