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Fhenix, an Israel-based encryption startup dedicated to bringing fully homomorphic encryption to smart contracts, has announced it has raised $7 million in seed funding.
Fhenix has also stated that it will publicly launch its testnet early next year.
Fhenix Raises $7 Million
The news about the fundraise was revealed by Fhenix CEO Guy Itzhaki, revealing that the company had secured $7 million in funding through a seed round. Multicoin Capital and Collider Ventures led the seed round. Other participants in the round were Bankless, Robot Ventures, Node Capital, TaneLabs, HackVC, Metaplanet, and several others. Itzhaki stated that the company plans to use the funds to bring its network into the public testnet phase by early next year. The funds will also be used to support ecosystem development.
Fhenix provides users with a confidential blockchain powered by fully homomorphic encryption. Fully homomorphic encryption (FHE) is a specialized form of encryption that allows computations to be performed on encrypted data. As a result, multiple users can perform operations, interact with smart contracts, and collaborate with data. Meanwhile, privacy will also be preserved, and sensitive information will be secured.
Unlike other encryption technologies, Itzhaki stressed that users do not have to decrypt data to perform computations. Unlike zero-knowledge technology, where the data is moved off-chain, and a prover can see the decrypted message, FHE computation takes place while the data is still encrypted. Moreover, the output of the computations will be encrypted as well. Itzhaki stated,
“Zero-knowledge is a great technology that has been adopted for scaling […], but there are limited user cases. With FHE, it’s really the first time that we can have data on-chain, encrypted, and being used as if it’s non-encrypted for the sake of confidentiality.”
Unlock Potential Use Cases
FHE can unlock several potential use cases, such as DAO voting tools, trustless games, and account abstraction.
“We make account abstraction really easy because you can put private keys on a smart contract encrypted using FHE, then use it to sign transactions all over the place.”
It can also leverage the fhEVM, an extension of the Ethereum Virtual Machine, which means developers would not need to learn any new language. They can simply use Solidity and the same developer tools they already use.
“[Developers] don’t need to learn any new language; they can use Solidity and the same developer tools they are used to. There is an additional library that they have to decide what it is they actually want to encrypt.”
An earlier developer testnet was launched in July. This was a Proof-of-Stake Layer-1 blockchain. However, Itzhaki noted that the official testnet would be Ethereum Layer-2.
“The long-term goal is to be perceived as some kind of extension to Ethereum. Whether you’re building your [layer-1] or your [layer-2], if you need to introduce encryption, you’ll be able to, using Fhenix.”
Advancing Application Development On Ethereum
As mentioned earlier, fully homomorphic encryption is a novel cryptographic scheme that allows direct computations over encrypted data without revealing the underlying data. Fhenix aims to advance application development in the Ethereum ecosystem by bringing data encryption and encrypted data computation to Ethereum smart contracts, on-chain assets, and transactions.
fhEVM was originally developed by Zama, a cryptography company that builds open-source homomorphic encryption solutions for blockchain and AI. The technology was directly integrated into the Fhenix Network thanks to a strategic partnership.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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