Fhenix launches Nitrogen testnet to transform Onchain confidentiality with FHE-powered decentralization

Fhenix, an Israeli startup focused on building a privacy-centric blockchain platform, has announced a major upgrade to its testnet, Nitrogen. The update introduces enhanced decryption capabilities and features designed to improve decentralization, usability, and performance. As an Ethereum Layer 2 platform, Fhenix leverages Fully Homomorphic Encryption (FHE) to enable confidential blockchain applications.

The launch follows Fhenix’s $15 million Series A funding round five months ago, led by Hack VC. Other participants in the round included Dao5, Amber Group, Primitive Ventures, GSR, Collider Ventures, and Stake Capital. The funds were allocated to support the development of ecosystem applications and the testnet, which is now being showcased with the Nitrogen update.

The launch of Nitrogen brings several key features, including the Threshold Network, a decryption system that minimizes trust requirements while enhancing decentralization across the Fhenix platform. This mechanism plays a central role in advancing the network’s infrastructure for confidential blockchain applications.

Another feature, Parallel Decryptions, addresses the computational demands of FHE schemes by enabling asynchronous decryption. This reduces the time required for decryption processes, making them more practical for real-world use.

The testnet also adds Security Zones, allowing developers to adjust security and performance trade-offs based on application requirements. Two zones are available:

• Zone 0: Emphasizes security and reduces the need for user trust.
• Zone 1: Focuses on performance, relying on a single local keyset managed by the sequencer for decryption.

The Nitrogen upgrade includes other functional improvements:

• Integration with Celestia for data availability, aimed at reducing transaction costs and improving price predictability.
• A random number generation function, FHE.rand(), which simplifies generating random values within the network.

These updates are intended to enhance the platform’s technical foundation while supporting application development.

Progress Toward Mainnet

Fhenix positions Nitrogen as a step toward a future mainnet launch. The platform continues to explore ways to balance security, decentralization, and user experience while advancing its encryption-based features for confidential applications.

Founded in 2023 by CEO Guy Itzhaki and Guy Zyskind, Fhenix is the first private blockchain to employ fully homomorphic encryption. Their use of fhEVM facilitates Ethereum developers in writing encrypted smart contracts and performing encrypted data computations, all within the familiar Solidity environment.

Fhenix relies on fully homomorphic encryption (FHE) technology from Zama to bolster confidentiality across its network. Considered the “holy grail” of cryptography, FHE ensures end-to-end data encryption, even during processing stages. Notably, other crypto projects, such as modular blockchain developer Inco and creators of the Shiba Inu memecoin, also leverage Zama’s FHE technology.