Quick Overview of 5 Promising Fully Homomorphic Encryption Projects

Author: Degen Maker

Translation: Luffy, Foresight News

Fully Homomorphic Encryption (FHE) is quickly becoming a buzzword—do you know why?

FHE enables computation on encrypted data without revealing any information, opening up numerous possibilities for Web3, including but not limited to:

• Confidential RWA tokenization

• On-chain identity

• MEV protection

• Private on-chain medical data

• Enabling DeFi compliance with data protection and privacy laws

Moreover, FHE can also play a role at the intersection of Web3 with artificial intelligence and zero-knowledge proofs.

AI models can now leverage data and generate results without accessing the actual input data, ensuring user queries remain private and secure. This also means data training can occur without direct access to the underlying data.

Despite ongoing debates about the closed-source nature of major large language model companies, FHE has emerged as a potential game-changer in the AI space.

Many are debating whether FHE will replace Zero-Knowledge Proofs (ZKP); however, they can coexist. ZKPs can be used to generate private proofs, while FHE can handle data processing within smart contracts.

FHE is still in its early stages of development. Below, I’ll briefly introduce five promising FHE projects.

1) Inco

Inco is a modular confidentiality-as-a-service blockchain—an EVM-compatible Layer 1 fully powered by FHE.

Inco previously raised a $4.5 million seed round led by 1kx.

Catalysts and key points:

• Providing privacy at the base layer is a strong value proposition that could attract many privacy-focused DApps.

• The introduction of data availability layers revolutionized ecosystems for modular projects like Celestia. A confidentiality layer is expected to generate similar, if not greater, appeal.

• Collaborating with Zama; Polygon co-founder serves as advisor; will leverage Ethereum's security via EigenLayer (essentially an AVS).

2) Mind Network

Mind provides a secure, zero-trust data privacy layer designed to enable true CrossFi expansion.

Mind raised a $2.5 million seed round led by Binance Labs.

Catalysts and key points:

• Building internet infrastructure enabling global citizens to control their own data.

• Testnet is live and may soon be incentivized.

• Powered by Zama.

• First use case is MindLake, a pioneering data storage rollup designed to compute over encrypted data on decentralized platforms.

3) Fhenix

Fhenix is the first rollup-based FHE architecture, designed to overcome challenges associated with executing FHE computations on Layer 1 due to extensive execution requirements and scalability limitations.

Catalysts and key points:

• Optimistic FHE Rollup can be built on Ethereum without modifying the base layer, meaning every smart contract on Ethereum can gain privacy enhancements through FHE rollup solutions.

• Partnered with Zama to launch fhEVM infrastructure.

• Testnet launching soon.

• In my view, Fhenix simplifies confidential smart contract deployment, which is crucial for developer adoption.

4) Privasea

Privasea is a network leveraging FHE to ensure privacy and security during AI computations.

Privasea raised a $5 million seed round led by Binance Labs.

Catalysts and key points:

• Genesis NFT details forthcoming; holders eligible for airdrops.

• Provides FHE-powered privacy computing solutions for DePIN+AI, combining multiple hot trends into one legally compliant and promising project whose token could deliver high returns.

• Developing another DApp for secure and private user verification, preserving privacy during KYC processes without exposing personal details, while remaining auditable when necessary.

• Powered by Zama.

5) Optalysys

Optalysys is building next-generation computing processing capabilities. I believe this is a highly promising project—the "picks and shovels" of the FHE space.

Optalysys focuses on DePIN, offering a cloud-native tech stack tailored for high-intensity FHE workloads, helping scale FHE at the computational layer.

Catalysts and key points:

• High potential as foundational infrastructure ("picks and shovels").

• Co-processors (GPU, CPU) address fundamental limitations of electronic systems.

• Optalysys has developed a unique optical computing system delivering superior processing power and energy efficiency from data centers to edge computing, supporting all major FHE libraries.