Fhenix, an Ethereum Layer 2 network developer focused on data confidentiality, has raised $15 million in a Series A funding round led by Hack VC, with participation from Dao5, Amber Group, Primitive Ventures, GSR, Collider Ventures, and Stake Capital. This brings Fhenix's total funding to $22 million. The company also launched its open testnet, Helium, allowing developers to deploy confidential smart contracts. Fhenix uses fully homomorphic encryption (FHE) technology from Zama to ensure end-to-end data encryption. The mainnet is expected to launch in the first quarter of next year. Fhenix has partnered with EigenLayer to develop an FHE co-processor and has set up a grants program to attract developers to its testnet.

Fhenix, an Ethereum Layer 2 network developer focused on data confidentiality, has raised $15 million in a Series A funding round.Hack VC led the round, with Dao5, Amber Group, Primitive Ventures, GSR, Collider Ventures and Stake Capital participating, Fhenix said Tuesday. The firm began raising for the round in March and closed it last month, co-founder and CEO Guy Itzhaki told The Block. He declined to comment on the structure of the round, valuation and board seat offerings if any.The Series A round brings Fhenix's total funding to $22 million. Last September, the startup raised $7 million in a seed round from Multicoin Capital and others. Itzhaki said there was inbound interest from investors in Fhenix, so it raised the Series A round.Fhenix also launched its open testnet, called Helium (initially planned to be named Renaissance), on Tuesday. With the launch of Helium, developers can deploy "confidential" smart contracts on the Fhenix Layer 2 network for the first time.Fhenix uses fully homomorphic encryption (FHE) technology from cryptography company Zama to help bring confidentiality to its network. FHE is considered the "holy grail" of cryptography that enables end-to-end data encryption, even during the processing stage. Other crypto projects, including modular blockchain developer Inco and the Shiba Inu memecoin makers, also utilize Zama's FHE technology, as The Block reported earlier this year."After scaling, confidentiality is the next major hurdle Ethereum needs to solve in order to reach mainstream adoption," Itzhaki said. "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."The Fhenix mainnet is expected to be launched in the first quarter of next year, Itzhaki said. He declined to comment when asked if Fhenix will also launch a token alongside its mainnet.To attract developers to its testnet, Fhenix has set up a grants program. Itzhaki said the program's size has not been finalized yet, but given the Series A funding round, it will be a "substantial" amount.The Fhenix Layer 2 is the first stage of the project's vision, according to Itzhaki, who said Fhenix's long-term plan to drive data confidentiality "everywhere." Fhenix recently partnered with EigenLayer to help it develop an FHE co-processor."The co-processor is a stateless rollup that enables Layer 1s and Layer 2s to get FHE services with minimal modifications on their behalf," Itzhaki said. "The key challenge is — how do you trust the response from the co-processor? The solution is using EigenLayer crypto economics, securing the response of the co-processor."Stay updated on the latest crypto funding news and trends with my bimonthly newsletter, The Funding. It's free. Sign uphere!

Fhenix Raises $15M in Series A Funding, Launches Confidentiality-Focused Ethereum Layer 2 Testnet