Fhenix Raises $15M & Launches Helium Testnet, Enabling Confidential Smart Contracts on Layer 2

TLDR

Fhenix, an Ethereum Layer 2 network focused on data confidentiality, has raised $15 million in a Series A funding round led by Hack VC, bringing its total funding to $22 million.
Fhenix has launched its open testnet called Helium, allowing developers to deploy “confidential” smart contracts on the Fhenix Layer 2 network for the first time.
The project uses fully homomorphic encryption (FHE) technology from cryptography company Zama to enable end-to-end data encryption, even during the processing stage.
Fhenix aims to drive data confidentiality across the entire blockchain ecosystem and has partnered with EigenLayer to develop an FHE co-processor.
The Fhenix mainnet is expected to launch in the first quarter of 2025, and the company has set up a grants program to attract developers to its testnet.

Fhenix, (read our guide here) an Ethereum Layer 2 network developer focused on data confidentiality, has recently announced the successful completion of a $15 million Series A funding round.

The round, led by Hack VC, saw participation from prominent investors such as Dao5, Amber Group, Primitive Ventures, GSR, Collider Ventures, and Stake Capital.

This latest injection of capital brings Fhenix’s total funding to $22 million, following a $7 million seed round in September 2023.

Alongside the funding announcement, Fhenix also launched its open testnet called Helium.

This milestone marks the first time developers can deploy “confidential” smart contracts on the Fhenix Layer 2 network.

The project leverages fully homomorphic encryption (FHE) technology from cryptography company Zama to enable end-to-end data encryption, even during the processing stage. FHE is considered the “holy grail” of cryptography, as it allows for the computation of encrypted data without the need for decryption.

Fhenix co-founder and CEO Guy Itzhaki emphasized the importance of confidentiality in the blockchain ecosystem, stating,

“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.”

Looking ahead, Fhenix plans to launch its mainnet in the first quarter of 2025. While details regarding a potential token launch remain undisclosed, the company has set up a grants program to attract and support developers in exploring the capabilities of its testnet.

The exact size of the program has not been finalized, but Itzhaki assures that it will be substantial, given the recent Series A funding round.

Fhenix’s long-term vision extends beyond its own Layer 2 network, as the company aims to drive data confidentiality across the entire blockchain ecosystem.

To further this goal, Fhenix has partnered with EigenLayer to develop an FHE co-processor. This co-processor will act as a stateless rollup, enabling Layer 1 and Layer 2 networks to access FHE services with minimal modifications.

Fhenix’s focus on data confidentiality and its innovative use of FHE technology position the project as a promising player in the Ethereum ecosystem.