The Application and Development of Fully Homomorphic Encryption Technology in the Blockchain Field

Cryptographic techniques have always played an important role in the advancement of human civilization, especially in information security and privacy protection. Technologies such as asymmetric encryption and hash functions laid the foundation for the birth of Bitcoin, ushering in a new era of Blockchain. With the development of the industry, cutting-edge technologies like zero-knowledge proofs, multiparty computation, and fully homomorphic encryption continue to emerge. Among them, fully homomorphic encryption ( FHE ), as one of the holy grails of cryptography, allows arbitrary computation on encrypted data without decryption, bringing new possibilities to multiple fields.

Overview of FHE

Fully homomorphic encryption ( FHE ) allows for unlimited computation and operations on ciphertext while maintaining the mathematical properties consistent with the plaintext. The implementation of FHE is based on complex mathematical algorithms and has high demands on computational resources. Currently, Microsoft's SEAL and Zama's TFHE are two major open-source FHE libraries.

The basic process of FHE includes: generating key pairs, encrypting data, performing homomorphic computations, and decrypting results. The management of the decryption key is crucial, and a threshold multi-party secure computation scheme can be used to enhance security.

Implementation of FHE on Blockchain

Applying FHE to Blockchain ideally involves encapsulating it as a smart contract code library. This requires the virtual machine to support the specific instruction set needed for FHE. fhEVM is a fully homomorphic EVM developed by Zama that supports Solidity for implementing privacy computing. It provides FHE operation support through precompiled contracts and has designed a dedicated memory area for storing FHE ciphertext.

FHE-Rollups Solution

Fhenix proposed the FHE-Rollups Layer 2 solution, combining fhEVM with Rollup technology. It adopts the Optimistic Rollups scheme, including components such as fraud proofs, fheOS core library, and threshold service network. Fhenix Frontier has released its first public version, providing relevant development tools and documentation.

Chain-Agnostic FHE Coprocessors

Fhenix introduces the Relay module, enabling various blockchain networks to connect to FHE Coprocessors. Through EigenLayer's Restaking mechanism, the efficiency of FHE Coprocessors is improved. The usage process includes steps such as application contract calls, Relay forwarding, FHE computation, and result verification.

Applications of FHE

FHE technology has broad application prospects in areas such as full-chain gaming, DeFi, and AI:

• Provide encryption protection for the game to prevent real-time manipulation.
• Protect sensitive data in DeFi and reduce MEV risks
• Train AI models with privacy protection in mind.

FHE Ecosystem Development

In addition to Zama and Fhenix, the FHE ecosystem also includes several projects such as Sunscreen, Mind Network, PADO Labs, and Arcium. Non-profit organizations like FHE.org and FHE Onchain contribute to academic research and educational outreach.

FHE technology has gained widespread recognition, including support from Ethereum founder Vitalik Buterin. With new projects constantly emerging and continuous market funding being injected, FHE technology is expected to experience explosive development.