Fhenix, an Ethereum-based blockchain platform, has recently announced the completion of a $7 million seed round led by Multicoin Capital and Collider Ventures. Other notable investors include Bankless, Node Capital, and HackVC. The funds will be dedicated to advancing the network’s development and transitioning it into the public testnet phase early next year.
While transparency is one of the key advantages of blockchain technology, it also raises concerns about privacy. Fhenix aims to address this challenge by employing a unique cryptographic technique called fully homomorphic encryption (FHE). This developer-focused project allows computations to be performed on encrypted data without the need for decryption. As a result, information remains confidential throughout transactions and smart contract implementations.
FHE is not a new concept, but it has now matured into a viable cryptographic technology, according to Guy Itzhaki, the CEO of Fhenix. The lack of confidentiality in the blockchain space is a significant obstacle in the Web3 environment. Itzhaki believes that without native encryption, enterprises will be hesitant to fully embrace and build on blockchain technology.
Fhenix’s public testnet build follows the launch of its private devnet earlier this year, which attracted 60 developers. It proved the company’s hypothesis that FHE is the right tool for providing privacy on the blockchain. Itzhaki compares FHE to its main technological rival, Zero-Knowledge (zK) proofs, stating that while zK proofs are great for scalability, they are too complex regarding privacy and have limited use cases.
In contrast, Fhenix aims to bring Ethereum Virtual Machine (EVM) compatibility, enabling a wide range of use cases. These include private voting in decentralized autonomous organizations (DAOs), blind auctions, on-chain identity attestations for Know Your Customer (KYC) processes, confidential real-world asset tokenization, and more.
Fhenix is an outcome of a collaboration involving Secret Network. The long-term goal of Fhenix is to serve as an extension that offers optional confidentiality. Developers will have the freedom to choose which aspects they want to encrypt, giving them more control over the privacy and security of their applications.
“The beauty of what we are introducing is that it enables developers to decide what they want to encrypt,” says Guy Itzhaki, emphasizing the flexibility and adaptability of Fhenix’s approach.
The closing of their successful seed round heralds an exciting future for Fhenix as it pioneers the implementation of fully homomorphic encryption within the Ethereum ecosystem. With its focus on privacy and compatibility, the platform aims to attract more developers and enterprises to build innovative blockchain solutions while safeguarding sensitive information.
