Fhenix has launched its mainnet on Ethereum and the Layer 2 network Arbitrum, making its fully homomorphic encryption coprocessor, CoFHE, available for production use from 21 October.
The technology allows smart contracts to process encrypted data directly without revealing sensitive information onchain. Account balances, financial positions and trading strategies can remain private while contracts continue to enforce automated rules.
Fhenix says the launch addresses a major privacy challenge in decentralised finance (DeFi), where institutions and developers have often had to expose sensitive transaction details on a public ledger in order to use onchain applications.
“Confidentiality is one of the biggest barriers between institutions and public blockchains,” said Steven Goldfeder, co-founder and CEO of Offchain Labs, the developer behind Arbitrum. “They need to keep positions and strategies private, and until now that meant giving up the composability that makes onchain markets worth using.”
CoFHE carries out intensive encrypted computation off-chain before sending verified results back to smart contracts on Ethereum and Arbitrum. Its design can increase processing capacity as demand changes, while a dual-mode function allows users to switch token balances between public and confidential settings in a single transaction.
The platform does not require assets to be wrapped or bridged when users change between those modes.
Fhenix’s initial design partners are Fluton, an encrypted intent engine for cross-chain transactions, and Alpha Engine, a financial network where strategists submit encrypted trading strategies to compete for liquidity.
Blockchain security firm Consensys Diligence carried out a technical audit before the deployment.
“An entire market can clear on numbers nobody has ever seen, the contract running it included, and the outcome is still correct and still checkable by anyone,” Consensys Diligence said in a statement. “The category of application waiting on the other side simply was not available before.”
Fhenix plans to launch three more decentralised applications (dapps) on CoFHE during the fourth quarter and expects to announce two institutional strategic partnerships in the coming weeks. The company is also working with Tandem on a confidential stablecoin.
It is participating in the Colosseum hackathon to investigate demand for confidential applications on the Solana blockchain.
“CoFHE is now live on Ethereum and Arbitrum mainnet, with competitive performance and a UX that’s simple for any builder who wants privacy in their dapp,” said Guy Zyskind, founder of Fhenix.
Self-custodial trading platform Sedona has also partnered with Fhenix to integrate confidential fully homomorphic encryption infrastructure into its system.
