What’s so magical about the first fully homomorphic encrypted blockchain developed by Fhenix?

Written by: Idan Levin Compiled by: Deep Wave TechFlow

Fhenix is led by Multicoin Capital with a US$7 million seed round of financing, and with the participation of Node Capital, Bankless Ventures, Robot Ventures, Tane Labs, HackVC and Metaplanet, it is the first block based on FHE to support end-to-end encryption. chain.

What is FHE?

Fully homomorphic encryption (FHE) has been a theoretical academic concept since 2009, but real-world advances in recent years by companies like Zama have made it possible to use the technology in production for the first time.

The magic of FHE is that calculations can be performed on encrypted data. Computation on ciphertext (i.e., encrypted data) produces a new ciphertext that corresponds to the result of the operation on plaintext (i.e., unencrypted data).

The exact mathematical process behind FHE is complex and relies on lattice encryption based on the difficulty of certain problems in lattice theory. The first feasible FHE scheme was proposed by Craig Gentry in 2009, using an object called an “ideal lattice” to encrypt data and allow calculations to be performed on the encrypted data.

From a blockchain perspective, FHE means that each transaction is encrypted before being sent to the mempool, so even miners/proposers cannot see the contents of the block. But FHE is more than just an encrypted memory pool—the execution of block transactions remains fully encrypted and therefore completely private from end-to-end.

Fhenix is developing the first FHE blockchain (fhEVM), which will enable end-to-end encryption for public blockchains. This system promises to revolutionize the way we think about blockchain, providing two important guarantees:

1. Full Confidentiality: FHE allows computations to be performed on encrypted data, which is often referred to as the “holy grail” of cryptography. With this feature, Fhenix’s system ensures absolute confidentiality, as even nodes executing smart contracts cannot access any user data.
2. Elimination of Miner Extractable Value (MEV): With Fhenix’s system, the entire memory pool is fully encrypted, preventing any entity from getting ahead of the user. MEV is one of the biggest and most painful problems with public blockchains today, undermining the fairness of the system. FHE has the potential to eliminate MEV, which is a very big problem for the industry.

fhEVM is designed to:

1. Independent of cryptographic expertise: fhEVM is designed not to require any specialized cryptographic knowledge. It will generally support Solidity smart contracts with only minor changes, mainly adding privacy data types to the smart contracts.
2. Consistent with Ethereum tools: fhEVM will retain compatibility with existing Ethereum tools.
3. User friendly.

FHE will redefine confidentiality and fairness in Web3

In the web2 era, end-to-end encryption and protocols like TLS/SSL play a key role in protecting digital communications and keeping them private, which can be seen from WhatsApp, one of the most widely used messaging apps in the world, with end-to-end encryption) and is seen in applications such as most of today’s Internet that uses TLS. It may seem crazy to use an e-commerce website that doesn’t support TLS communication.

The emergence of FHE is expected to bring this high level of encryption to the blockchain field. FHE allows computation to be performed on encrypted data, protecting the confidentiality of user data in the best way possible, better than any previous technology (TEE/ZK).

Additionally, FHE solves the significant problem of miner extractable value (MEV), which is one of the biggest problems facing public blockchains today that other technologies cannot solve (all other technologies like Flashbots just redistribute MEV in some way Make it fairer, but all proposed solutions are just some permutations of this problem, not a fundamental solution). MEV undermines the legitimacy of public blockchains because it erodes the notion that the system is fair. That’s why MEV is one of the hottest topics in the industry, with hundreds of millions of dollars invested in it. FHE will eliminate MEV and can restore fairness to the system.

We believe there is no better team on the planet to build this system than Fhenix. There are only a few people in the world with the expertise to design this system, and the combination of the blockchain track record that Guy Zyskind brings and Guy Itzahki’s extensive experience in secure systems is very rare. They have brought together the best partners in the world - Zama as a technical partner, including Pascal Paillier, one of the world’s top names in FHE, Shai Halevy and Professor Srini Dev Adas.

Israel is a leader in cryptography and has a large pool of talent in the field. Israel’s blend of expertise and advanced cryptography is unique and unparalleled globally. We believe they will play a key role in bringing end-to-end encryption to the Web3 industry.