Confidential DeFi

Decentralized Finance, or DeFi for short, refers to a blockchain-based financial system free of centralized parties or intermediaries. In this system, markets are always open and available to anyone, transactions occur within seconds, and users are in complete control of their funds. Ethereum is the leader in DeFi and contains a variety of financial services and products, including lending, borrowing, and trading.

The Problem

Data Protection
& Privacy

Encrypted on-chain data safeguards both personal information and financial information from potential unauthorized access. Additionally, many financial aspects are best kept private, such as payment details, trading strategies, or one’s financial history.

Preventing Fraud & Malicious Activity

Minimizing the chances of fraudulent activities, hacking, and other malicious actions by safeguarding sensitive data. For instance, many infamous security breaches have occurred by malicious entities linking a user’s public key to their actual identity and subsequently launching targeted phishing attacks against them.

MEV Protection

MEV measures the profit an actor like a validator, sequencer, or miner can make by re-ordering transactions from the blocks they create. Fhenix hides transaction details, preventing validators or miners from identifying or exploiting profitable opportunities. This also increases market integrity by preventing manipulative practices such as front-running or sandwich attacks.

Trust and Adoption

Wider industry acceptance and adoption face obstacles due to trust issues and the transparent nature of blockchain. By fostering private and secure transactions, we can enhance trust, paving the way for the exploration of new use cases and the inclusion of more network participants.

Why Fhenix?

Fhenix enhances DeFi by ensuring that all sensitive on-chain data remains private and secure. This is possible through encrypted computing, which is crucial for all forms of smart contracts,  upon which DeFi is built. This could include any form of transaction that’s private in nature, such as payments, lending, and more.

Complete Privacy Preservation: FHE enables computations on encrypted data without ever decrypting it, ensuring complete privacy preservation. Unlike TEE, where data is decrypted within a secure enclave, FHE keeps data encrypted at all stages, reducing exposure to unauthorized access or leaks.

Universal Computations & Broad Potential Applications: FHE stands out for its ability to execute virtually any computation on encrypted data, providing a universal solution for all possible DeFi computational requirements. This also means that FHE can be utilized across a broader range of applications, enabling more complex and privacy-preserving applications. In contrast, existing technologies like MPC and ZK are often designed for specific types of computations or applications.

No Trusted Third Parties: Both TEEs and MPC technologies may require trusted third parties or trust setup procedures. FHE operates without any need for trusted third parties, increasing security and being fully aligned with DeFi’s decentralization ethos

Non-Interactive: Many encryption schemas such as MPC are interactive, meaning they require coordination amongst parties. This introduces complexity and inefficiencies, whereas FHE’s non-interactive nature ensures computations are streamlined.

Simplified Infrastructure: MPC requires coordination amongst multiple parties, while TEE requires extremely specialized hardware. In contrast, FHE greatly simplifies the infrastructure requirements for secure computations.

Enhanced Regulatory Compliance: With stringent data protection laws, FHE’s robust privacy-preserving feature can aid in data privacy and compliance, making it easier for DeFi to reach broader adoption.

Fhenix enhances DeFi by ensuring that all sensitive on-chain data remains private and secure. This is possible through encrypted computing, which is crucial for all forms of smart contracts,  upon which DeFi is built. This could include any form of transaction that’s private in nature, such as payments, lending, and more.

Complete Privacy Preservation

FHE enables computations on encrypted data without ever decrypting it, ensuring complete privacy preservation. Unlike TEE, where data is decrypted within a secure enclave, FHE keeps data encrypted at all stages, reducing exposure to unauthorized access or leaks.

Non-Universal Computations & Broad Potential Applications

FHE stands out for its ability to execute virtually any computation on encrypted data, providing a universal solution for all possible DeFi computational requirements. This also means that FHE can be utilized across a broader range of applications, enabling more complex and privacy-preserving applications. In contrast, existing technologies like MPC and ZK are often designed for specific types of computations or applications.

No Trusted Third Parties

Both TEEs and MPC technologies may require trusted third parties or trust setup procedures. FHE operates without any need for trusted third parties, increasing security and being fully aligned with DeFi’s decentralization ethos.

Non-Interactive

Many encryption schemas such as MPC are interactive, meaning they require coordination amongst parties. This introduces complexity and inefficiencies, whereas FHE’s non-interactive nature ensures computations are streamlined.

Simplified Infrastructure

MPC requires coordination amongst multiple parties, while TEE requires extremely specialized hardware. In contrast, FHE greatly simplifies the infrastructure requirements for secure computations.

Enhanced Regulatory Compliance

With stringent data protection laws, FHE’s robust privacy-preserving feature can aid in data privacy and compliance, making it easier for DeFi to reach broader adoption.