Confidentiality-focused Ethereum Layer 2, Fhenix, secures $15 million in Series A funding

Quick Take:

  • Fhenix secured $15 million in a Series A funding round and launched its open testnet.
  • Fhenix is developing an Ethereum Layer 2 network emphasizing data confidentiality.

Fhenix, a leading developer of Ethereum Layer 2 networks focused on data confidentiality, has successfully secured $15 million in a Series A funding round.

Hack VC led the round, with participation from Dao5, Amber Group, Primitive Ventures, GSR, Collider Ventures, and Stake Capital, Fhenix announced on Tuesday. The firm began raising funds in March and closed the round last month, co-founder and CEO Guy Itzhaki told The Block. He declined to comment on the specifics of the round’s structure, valuation, or any potential board seat offerings.

This Series A round boosts Fhenix’s total funding to $22 million. Last September, the startup raised $7 million in a seed round from Multicoin Capital and other investors. Itzhaki noted that there was significant inbound interest from investors, prompting the Series A raise.

Fhenix launches open testnet

Fhenix confidently launched its open testnet, Helium, on Tuesday, marking a significant milestone for developers. With Helium, developers can now deploy “confidential” smart contracts on the Fhenix Layer 2 network, unlocking new potential in secure blockchain technology.

Leveraging fully homomorphic encryption (FHE) technology from cryptography leader Zama, Fhenix brings unprecedented confidentiality to its network. FHE, heralded as the “holy grail” of cryptography, ensures data remains encrypted even during processing. This cutting-edge technology is also adopted by other notable crypto projects, including modular blockchain developer Inco and the creators of the Shiba Inu memecoin, as reported by The Block earlier this year.

“After scaling, confidentiality is the next major hurdle Ethereum needs to solve to achieve mainstream adoption,” said Itzhaki. “FHE is the most elegant solution to encryption challenges, enabling end-to-end computation of encrypted data, unlike traditional confidentiality solutions based on zero knowledge technology.”

Fhenix mainnet launch

The Fhenix mainnet is set to launch in the first quarter of next year, Itzhaki confirmed. He did not comment on whether Fhenix will also introduce a token alongside its mainnet launch.

To attract developers to its testnet, Fhenix has established a grants program. While the program’s size has not been finalized, Itzhaki assured that, given the Series A funding round, it will be a “substantial” amount.

Fhenix Layer 2 marks the initial phase of the project’s ambitious vision. Itzhaki outlined Fhenix’s long-term plan to drive data confidentiality “everywhere.” Recently, Fhenix partnered with EigenLayer to develop an FHE co-processor.

“The co-processor is a stateless rollup that enables Layer 1s and Layer 2s to access FHE services with minimal modifications,” Itzhaki explained. “The key challenge is ensuring trust in the co-processor’s response. The solution lies in using EigenLayer crypto economics to secure the co-processor’s responses.”


© 2023 CryptoFunding. All Rights Reserved.