The Fhenix Encryption Startup Raises $7M for Secure Computing

The initial funding was spearheaded by Multicoin Capital and Collider Ventures. Early in 2024, the public testnet for Fhenix will go live.

Fhenix is an upcoming layer-2 protocol that aims to introduce completely homomorphic encryption to smart contracts. Fhenix CEO Guy Itzhaki said in an interview with Blockworks that the business has raised $7 million from investors including Multicoin Capital and Collider Ventures as part of a seed round.

Bode Capital, Robot Ventures, Bankless, HackVC, TaneLabs, and Metaplanet are just some of the other companies that have put money into the company. FHE, or fully homomorphic encryption, is a subset of symmetric encryption that allows for computations to be conducted on secret information.

This implies that numerous individuals may carry out activities, engage with contracts, or collaborate on data without worrying about their personal details being compromised. Itzhaki points out that this kind of encryption eliminates the need for users to decrypt data before processing it, unlike other methods of encryption and trusted execution environments.

Instead of moving the data off-chain and letting the prover view the decrypted message as in zero-knowledge technology, FHE computation may be accomplished while the data is still encrypted. The computed results will be encrypted as well.

There aren’t many use cases for zero-knowledge technologies, but they’ve been embraced for scalability, according to Itzhaki. For the first time, thanks to FHE, encrypted data may be stored on the blockchain while maintaining the same level of privacy as non-encrypted data.

Many practical applications may be unlocked by FHE. Itzhaki said that “we make account abstraction really easy” since private keys may be stored on an FHE-encrypted smart contract and then used to sign transactions elsewhere. Itzhaki claims that fhEVM, an enhancement of the Ethereum virtual machine (EVM), will be used by Fhenix.

There is an extra library that requires developers to determine what they want to encrypt, but otherwise, “[developers] don’t need to learn any new language,” Itzhaki said.

Itzhaki emphasizes that the official testnet launch would be as an Ethereum layer-2 network, in contrast to a previous developer testnet released in July as a proof-of-stake, layer-1 blockchain.

If you need to implement encryption when constructing either your [layer-1] or your [layer-2], you may do it using Fhenix.

Also Read: Justin Sun Claims 5,000 ETH Was Stolen In A Hack