Cryptography company Zama has launched a tool called the fhEVM Coprocessor on Ethereum’s Sepolia testnet, which it says will allow developers to create confidential smart contracts on any blockchain.
On Dec. 6, Zama announced that its fhEVM Coprocessor was deployed on the Sepolia testnet and that it plans a fully operational mainnet launch in mid-2025.
According to Rand Hindi, CEO of Zama, the goal is to create blockchain applications that can maintain transparency while protecting privacy.
“The implementation of the fhEVM native protocol has already led to the creation of significant blockchain infrastructures capable of reconciling blockchain transparency with the need for heightened privacy,” he said.
The release enables developers “to deploy confidential smart contracts on any non-FHE (Fully Homomorphic Encryption)-enabled blockchain,” he added. The Zama team told Cointelegraph:
“Simply put, Zama’s fhEVM makes it possible to run Ethereum fully encrypted, end-to-end.”
“While Web3 privacy has seen many innovations like consensus, ZK, and optimistic rollups, public blockchains expose all data, while private ones lack transparency. Some ZK solutions improve privacy but sacrifice blockchain composability,” they said, adding that fhEVM was created to solve this.
Key innovations include encrypted data that remains processable while maintaining blockchain composability and programmable privacy controls.
The system also provides performance improvements, such as around 20 transactions per second (TPS) with potential future scaling to hundreds or thousands of TPS.
The fhEVM Coprocessor uses a technology called Fully Homomorphic Encryption (FHE), which enables the processing of encrypted data without decrypting it.
This simplifies privacy-preserving blockchain applications and enables developers to build decentralized apps (DApps) with enhanced privacy without needing deep cryptographic expertise.
“We believe FHE will enable a new internet protocol, HTTPZ,” Zama said. Source: Zama.ai
“Developers building confidential DApps often face steep hurdles such as learning unfamiliar programming languages, designing ‘circuits,’ and dealing with slow, resource-heavy computations,” the team said, adding: “With just Solidity, they can start building confidential smart contracts right away.”
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Potential practical applications include private tokens, encrypted decentralized finance (DeFi) transactions, confidential onchain lending, secure voting mechanisms, private business record management, sealed-bid auctions and composable private identities.
The development could potentially revolutionize how privacy is handled in blockchain, decentralized applications and smart contracts, making complex cryptographic protection more accessible to developers.
Zama raised $73 million in a Series A funding round led by Multicoin Capital and Protocol Labs in March.
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