FHE, short for Fully Homomorphic Encryption, allows individuals to perform computations on encrypted data in a specific form without the need to decrypt and expose the data privacy. Application areas include but are not limited to:
Confidentiality in RWA tokenization
On-chain identity
MEV protection
Privacy-preserving on-chain medical data
Making DeFi compliant with data protection and privacy laws
FHE is a concept within the broader scope of technology on the internet and has been around for some time. It gained attention with Fhenix Network integrating FHE functionality into Ethereum and launching the fhEVM solution. Any developer can integrate FHE functionality into transaction flows in the form of pre-compile binaries.
The mainstream privacy technologies currently available in the market：
The privacy technologies adopted in the encryption industry mainly revolve around ZKP (Zero-Knowledge Proofs). The difference between FHE and ZKP lies in:
ZKP addresses the issue of consistent transmission of data under encryption. The data submitter can prove the authenticity of the data to the receiver without revealing the specific data, making it a point-to-point encryption scheme. Particularly, lightweight zk-SNARKs have been widely used in layer2 Rollups.
On the other hand, FHE aims to tackle the problem of re-computation under encrypted data transmission. This constitutes a more extensive encryption scheme, accommodating many-to-many interactions. Its less widespread adoption is due to the significant computational overhead and low efficiency involved in the process.
Currently, the application of FHE in the encryption industry is in its early stages. Below are a few projects utilizing FHE technology：
Inco Network
Inco Network is an EVM Layer-1 protocol that utilizes Fully Homomorphic Encryption (FHE) to achieve composable and actionable confidential states. Its fhEVM (FHE + EVM) enables the authoring of private smart contracts and computation over encrypted data without the need for decryption. This innovation unlocks a wide range of use cases such as card games, Decentralized Identifiers (DID), private voting, dark pools, and more, paving the way for possibilities in the new era.
Previously, Inco completed a $4.5 million seed round led by 1kx.
Mind Network
Mind is a provider of a secure and data privacy zero-trust layer aimed at facilitating true CrossFi expansion. The Mind Network offers end-to-end data encryption and access control services, combining zero-knowledge proofs (ZKP) with innovative Adaptive Fully Homomorphic Encryption (AFHE) technology. This allows individuals to have complete ownership and control over their data and enables computation on encrypted data, ensuring data privacy and security in the age of artificial intelligence.
Previously, Mind Network completed a $2.5 million seed round led by Binance Labs.
Fhenix
Fhenix is the first confidential blockchain powered entirely by Fully Homomorphic Encryption (FHE). By employing fhEVM, Fhenix enables Ethereum developers to seamlessly construct encrypted smart contracts and perform data encryption computations, all while utilizing Solidity and other familiar and user-friendly tools.
Previously, Fhenix completed a $7 million seed round led by Multicoin Capital.
