Current Status and Application Prospects of FHE Technology

Cryptographic technology plays an important role in the progress of human civilization, especially in the fields of information security and privacy protection. In recent years, with the development of blockchain technology, cutting-edge cryptographic technologies such as zero-knowledge proofs, multi-party computation, and fully homomorphic encryption have emerged continuously. Among them, fully homomorphic encryption ( FHE ), known as the "Holy Grail" of cryptography, allows arbitrary computations on encrypted data without decryption, bringing new possibilities for privacy computing.

Overview of FHE

The core feature of fully homomorphic encryption (FHE) is that it allows computations and operations to be performed on ciphertexts, which can be directly mapped to plaintext. Compared to partially homomorphic encryption and some homomorphic encryption, FHE supports an unlimited number of computations and operations. Currently, Microsoft's SEAL and Zama's TFHE are two relatively mature open-source FHE libraries.

The basic operation flow of FHE includes: generating key pairs, encrypting data, performing homomorphic computations, and decrypting results. Among these, the management of the decryption key is crucial, and it is advisable to consider using threshold multi-party secure computation schemes to enhance security.

FHE Applications on Blockchain

To apply FHE on the blockchain, it is necessary to modify the smart contract virtual machine to support the instruction set required by FHE. The fhEVM developed by Zama is a fully homomorphic EVM that supports privacy computing with Solidity. fhEVM provides support for FHE operations, a decryption mechanism based on distributed threshold protocols, and a Solidity contract library that lowers the development threshold.

FHE-Rollups Solution

The standalone fhEVM is difficult to form a complete ecosystem, so some projects are exploring the combination of fhEVM with Rollup technology to build an FHE-Rollups type Layer 2 solution. Fhenix, as a pioneer, adopts Optimistic Rollups technology and integrates components such as the fraud proof mechanism of Arbitrum Nitro, fheOS core library, and threshold service network.

Cross-Chain FHE Solution

Fhenix has also introduced the Relay module, enabling various public chains and Layer 2 networks to access FHE functionality. Combined with EigenLayer's Restaking mechanism, FHE Coprocessors can provide more convenient FHE services for different chains.

FHE Application Scenarios

FHE technology has a wide range of application space in areas such as full-chain gaming, DeFi, and AI.

• Full-chain games: Protect player privacy and prevent real-time manipulation
• DeFi: Protect sensitive data, reduce MEV risk
• AI: Implementing model training under privacy protection

FHE Ecosystem Development

In addition to Zama and Fhenix, there are some other noteworthy projects in the FHE ecosystem:

• Sunscreen: Self-developed FHE compiler
• Mind Network: Combining EigenLayer's AI with DePIN network
• PADO Labs: A decentralized computing network that integrates ZKP and FHE
• Arcium: Parallel Confidential Computing Network
• Inco Network: Layer 1 based on fhEVM
• Treat: FHE Layer3 of the Shiba ecosystem
• octra: Supports FHE networks with isolated execution environments
• BasedAI: A network that introduces FHE functionality for LLM
• Encifher: Focused on FHEML projects
• Privasea: FHE Network for the AI Field

Non-profit organizations such as FHE.org and FHE Onchain have also contributed to research and education for FHE.

With the continuous maturation of FHE technology and the ongoing improvement of its ecosystem, we believe that FHE will bring more innovative applications to fields such as blockchain and AI.