In a Series A funding round, Fhenix, an Ethereum Layer 2 network developer with an emphasis on data confidentiality, has raised $15 million.
According to Fhenix on Tuesday, Hack VC led the round, with participation from Dao5, Amber Group, Primitive Ventures, GSR, Collider Ventures, and Stake Capital. Guy Itzhaki, the CEO and co-founder of the company, told The Block that the round was finished last month after it started in March. Regarding the round’s structure, valuation, and potential board seat offerings, he remained silent.
Fhenix now has $22 million in total funding thanks to the Series A round. The business raised $7 million from Multicoin Capital and other investors in a seed round last September. Itzhaki stated that Fhenix had increased its Series A round due to incoming investor interest.
Fhenix Introduces Open Testnet
On Tuesday, Fhenix also unveiled Helium, an open testnet that was originally supposed to be dubbed Renaissance. Developers can now implement “confidential” smart contracts on the Fhenix Layer 2 network for the first time with the launch of Helium.
To further ensure network confidentiality, Fhenix employs fully homomorphic encryption (FHE) technology from cryptography firm Zama. The “holy grail” of cryptography, FHE allows end-to-end data encryption even as the data is being processed. Zama’s FHE technology is also being used by other cryptocurrency projects, such as the Shiba Inu memecoin makers and the modular blockchain developer Inco.
Itzhaki said:
“After scaling, confidentiality is the next major hurdle Ethereum needs to solve in order to reach mainstream adoption. FHE is the most elegant solution to the problem of encryption because, unlike existing confidentiality solutions based on zero knowledge technology, it allows for end-to-end computation of encrypted data.”
Fhenix Mainnet Launch
Itzhaki stated that the Fhenix mainnet is anticipated to be launched in the first quarter of the next year. When asked if Fhenix will introduce a token in addition to its mainnet, he declined to answer.
A grants program has been established by Fhenix to entice developers to its testnet. Although the program’s scale hasn’t been decided upon yet, Itzhaki stated that it will be “substantial” considering the Series A investment round.
Itzhaki stated that the Fhenix Layer 2 represents the first phase of the project’s vision, with the long-term goal of Fhenix aiming to drive data confidentiality “everywhere.” EigenLayer and Fhenix recently teamed up to assist EigenLayer in developing an FHE co-processor.
Itzhaki added:
“The co-processor is a stateless rollup that enables Layer 1s and Layer 2s to get FHE services with minimal modifications on their behalf. The key challenge is — how do you trust the response from the co-processor? The solution is using EigenLayer crypto economics, securing the response of the co-processor.”
