The Rise of Fully Homomorphic Encryption Technology: Current Ecosystem and Development Opportunities

Cryptographic technology plays an important role in the advancement of human civilization, especially in the fields of information security and privacy protection. It provides protection for data transmission and storage across various fields, and its asymmetric encryption public-private key system and hash functions are the foundation of the birth of Bitcoin, opening up a new era of blockchain.

With the development of the blockchain industry, a series of cutting-edge cryptographic technologies have emerged, among which zero-knowledge proof, multi-party computation, and fully homomorphic encryption are the most notable. These technologies are widely applied in various scenarios, such as zero-knowledge proof combined with Rollup to solve blockchain scalability issues, and multi-party computation promoting large-scale applications for user entry. Fully homomorphic encryption, as an important breakthrough in cryptography, allows arbitrary computation on encrypted data without decryption, bringing new possibilities to multiple fields.

Overview of Fully Homomorphic Encryption

Fully homomorphic encryption ( FHE ) allows for computations and operations on ciphertext, which can be directly mapped to plaintext, preserving the mathematical properties of the encrypted data. FHE supports an unlimited number of computations and operations on encrypted data.

Although the mathematical principles of FHE are complex, its basic process can be summarized as: generating keys, encrypting data, performing homomorphic computations, and decrypting results. In practice, the management of decryption keys is crucial. For blockchain, introducing threshold multi-party secure computation is a promising option that can enhance the security of key management and reduce single point risks.

fhEVM: The Infrastructure for Fully Homomorphic Encryption

To apply FHE on the blockchain, the ideal way is to encapsulate it as a smart contract code library. This requires virtual machine support for the complex mathematical operations required by FHE. The EVM has become the preferred choice for implementing FHE, and the fhEVM launched by Zama is a fully homomorphic EVM that supports privacy computing with Solidity.

The core features of fhEVM include:

• Provide FHE operation support through precompiled contracts
• Create specific EVM memory and storage areas for FHE
• Decryption mechanism designed based on distributed threshold protocol
• Solidity contract library that lowers development barriers

FHE-Rollups: Building the FHE Ecosystem

fhEVM needs to rely on public chain architecture or Layer 2/Layer 3 solutions. Fhenix, as a pioneer, is exploring the combination of fhEVM with Rollup technology to build an FHE-Rollups type Layer 2 solution.

The technology stack of Fhenix includes:

• Fraud Proof Variants of Arbitrum Nitro
• Core Library fheOS
• Threshold Service Network ( TSN )

Fhenix has released the first public version, Frontier, which provides a smart contract code library, Solidity API, development toolchain, and more.

FHE Coprocessors: Cross-chain FHE Solutions

Fhenix introduces the Relay module, enabling various public chains and Layer 2/3 networks to access FHE functionality. To overcome the long proof challenge period, Fhenix collaborates with EigenLayer to enhance the efficiency of FHE Coprocessors through a Restaking mechanism.

The use process of FHE Coprocessors is simple and clear, including steps such as invocation, request queuing, forwarding, execution, decryption, and result feedback.

The Application Prospects of FHE

FHE shows great application prospects in areas such as full-chain gaming, DeFi, and AI:

• Full-chain games: Protecting player privacy, preventing real-time manipulation
• DeFi/MEV: Protect sensitive data, reduce MEV risk
• AI: Protect personal privacy data for model training

Overview of the FHE Ecosystem

In addition to Zama and Fhenix, there are several other projects worth noting in the FHE ecosystem:

• Sunscreen: Self-developed FHE compiler
• Mind Network: Combining EigenLayer's FHE network
• PADO Labs: A computational network that integrates ZKP and FHE
• Arcium: Parallel Confidential Computing Network
• Inco Network: Optimizing FHE computation on Layer 1
• Treat: FHE Layer3 of the Shiba ecosystem
• octra: supports FHE networks with isolated execution environments
• BasedAI: Introduce FHE functionality for LLM
• Encifher: Focused on the FHEML project
• Privasea: FHE network for the AI field

Non-profit organizations such as FHE.org and FHE Onchain provide resources for academic research and educational outreach.

The prospects of FHE technology are bright, promising innovation and breakthroughs in multiple fields. With the development of projects like Fhenix, FHE will bring new possibilities to blockchain applications.