Fhenix has launched its CoFHE coprocessor on the Ethereum and Arbitrum mainnets, a development that enables smart contracts to operate on encrypted data. This new capability allows for computations on sensitive information without decrypting it, marking a step in enhancing privacy for blockchain applications.
CoFHE Coprocessor Goes Live
According to Fhenix, the CoFHE coprocessor, which stands for fully homomorphic encryption (FHE) coprocessor, went live on October 21, 2026. Developers can integrate this functionality into their smart contracts with a single line of Solidity import, a move aimed at simplifying the adoption of privacy-preserving technologies. Historically, privacy tooling has often required developers to learn new languages or entirely new blockchain ecosystems, a barrier Fhenix aims to lower.
The coprocessor operates by performing intensive computations off-chain and then sending encrypted results back to the host EVM chain. This architecture ensures that contracts using CoFHE can still interact with existing infrastructure on the host chains, avoiding the isolation often associated with privacy solutions.
Dual-Mode Token Standard Introduced
Alongside the coprocessor, Fhenix has introduced a Dual-Mode Token Standard. This standard allows users to move between public and private token balances within a single transaction, eliminating the need for bridges or token wrapping, which can add complexity and security risks.
Permissioned Mainnet Launch with Open Testnets
For the mainnet launch, Fhenix selected five retail-focused decentralized applications (dApps) from a pool of approximately 60 candidates. The mainnet is initially permissioned, meaning contracts must be approved for an allowlist before they can utilize CoFHE in production. Fhenix’s testnets remain fully open to developers and users, providing an environment for experimentation and development.
Performance and Project Evolution
Fhenix points to benchmarks from its ACM CCS 2025 research, suggesting that its new threshold decryption method offers substantial performance improvements. Reportedly, this method delivers approximately 20,000 times higher throughput and up to 37 times lower latency compared to traditional approaches. Threshold decryption involves splitting the decryption power among multiple parties, ensuring no single entity holds the complete decryption key.
The development of CoFHE represents an evolution for Fhenix. The project initially explored an FHE rollup architecture but pivoted to the modular coprocessor model to achieve broader interoperability. This strategic shift was further bolstered by the acquisition of the Sunscreen team in July 2026, a group recognized for its expertise in FHE.
In terms of funding, Fhenix has raised a total of $22 million across seed and Series A rounds in 2023. The launch of the CoFHE coprocessor on Ethereum and Arbitrum is expected to open new avenues for privacy-preserving smart contract applications, though the permissioned nature of the mainnet launch indicates a phased rollout strategy.
Key Uncertainties
Several aspects remain subject to further clarification, including the specific details of the allowlist approval process for the permissioned mainnet, the exact nature and capabilities of the five retail-focused dApps launching with the mainnet, and the long-term impact and adoption rate of the CoFHE coprocessor and Dual-Mode Token Standard.
Why This Matters
The launch of Fhenix’s CoFHE coprocessor on Ethereum and Arbitrum enables smart contracts to process encrypted data, addressing a critical need for privacy and advanced functionality in blockchain applications. The mainnet launch is permissioned, requiring contracts to be on an allowlist.
Broader Context
Fhenix says its CoFHE coprocessor is now running in production on Ethereum and Arbitrum, allowing smart contracts to operate on encrypted balances and positions.
