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Fhenix, billed as the world’s first confidential blockchain, has announced the completion of a $7M seed round that’s attracted several of the industry’s best known VCs. Multicoin Capital and Collider Ventures led the round, which also saw participation from the likes of Node Capital, Bankless, HackVC, TaneLabs, Metaplanet, and Robot Ventures. The raise, arriving during a challenging period for web3 startups, attests to Fhenix’s team, tech and vision in harnessing fully homomorphic encryption (FHE).
Private Data Without the Privacy Concerns
Fhenix is at the vanguard of a wave of web3 startups building highly scalable networks that can compute data and deliver the results onchain, Utilizing smart contracts, vast databases can be analyzed and the results delivered to decentralized applications (dapps) for such purposes as authentication, financial markets, and medical research. The challenge has been in allowing this data to be computed without the risk of sensitive information being leaked onchain.
In homomorphic encryption, Fhenix believes it has found the solution to this challenge and its backers, not least Multicoin Capital, are in agreement. As Multicoin’s Kyle Samani points out, “FHE has always been a technology with a ton of promise; however, the challenge has always been how to bridge the requisite knowledge in hardcore cryptography and blockchain development.” His firm believes that Fhenix has found the solution to this problem and is confident that FHE represents the future of onchain data computation.
There are strong parallels here with zero knowledge proofs, an analogous technology whose applications are only starting to be fully appreciated. If Samani and other Fhenix investors are vindicated, in the near future FHE will be mentioned in the same breath as zk-proofs. And with first mover advantage and a sizable seed round behind it, there’s a lot going for Fhenix.
The EVM Levels Up
Fhenix Network has been under development for some time; its private devnet kicked off in July and there’ll be a public testnet arriving in early 2024. At the heart of its homomorphic encryption capabilities lies the fhEVM, a variation of the Ethereum Virtual Machine that supports confidential smart contracts. This means that confidential data can be crunched without its contents being disclosed.
Rand Hindi is the CEO of Zama, the company that created the fhEVM. As he explains, “Having the ability to keep things private on-chain will go beyond solving privacy issues; it will pave the way for hundreds of new use cases—blind auctions, on-chain identity attestations and KYC, confidential real-world asset tokenization, private voting for DAOs and more.” He adds: “We are still discovering the full scope of what developers can do with data privacy as a primitive and exploring the full potential of FHE and its applications.”
Fhenix Network is the consequence of a partnership with Zama that will see the fhEVM trialled in the wild. If its backers are proven correct, Fhenix’s onchain solution will usher in a new era for onchain data analysis while further extending the value proposition of web3.
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.