Summary: Fhenix presents Privacy Stages, a framework for assessing privacy in blockchain systems, and releases Fhenix402, an experimental private version of Base’s x402 micropayment format.
Fhenix, a blockchain technology company that develops privacy solutions using Confidential Fully Homomorphic Encryption (CoFHE), introduced Privacy Stages, a classification framework for evaluating privacy protections in blockchain systems. The company also launched Fhenix402, an experimental private implementation of Base’s x402 payment format, which the team developed and deployed in a day.
Growing activity on Ethereum, along with lower transaction costs, has increased attention to privacy needs across payments, healthcare, AI, and financial applications. Organizations need encrypted computation, but the Web3 industry has lacked a consistent approach for evaluating privacy solutions. Privacy Stages and Fhenix402 address this by providing a standardized model and an example use case built with advanced cryptographic methods.
Privacy Stages: Framework Overview
Fhenix’s Privacy Stages framework establishes a testable method for describing how different blockchain systems handle data confidentiality. The model adapts concepts used in rollup classifications to provide a consistent way to determine who can access data throughout computation and settlement.
“Progress accelerates when we share benchmarks,” said Fhenix founder Guy Zyskind. “Privacy Stages give developers, enterprises, and regulators the first objective way to evaluate blockchain privacy, and a roadmap to achieve true global confidentiality.”
The framework defines four privacy stages based on cryptographic assurances and system design:
- Stage 0 – TEE-Only (“Trust the Box”): Relies on hardware enclaves for protection. Data exposure occurs if the enclave is compromised.
- Stage 1 – Pure Cryptography With Training Wheels: Uses FHE or MPC, but still relies on additional operators or controls to achieve higher protection.
- Stage 2 – Blocking Quorum + Defense-in-Depth: Combines distributed key generation, independent operator groups, optional hardware support, and aligned incentives to minimize unauthorized access. Breaking privacy requires significant coordinated action.
- Stage ℵ (Aleph/Infinity) – Indistinguishable Obfuscation: Represents a theoretical model in which programs hide their logic. Currently, it remains a research concept rather than a deployable tool.
The categories aim to help builders and evaluators compare methods consistently and support more precise development targets for privacy-preserving infrastructure.
Fhenix402: Private Version of Base’s x402 Payments
To evaluate its CoFHE technology and FHERC20 token model, Fhenix developed Fhenix402, a private implementation of Base’s x402 micropayment system. x402 applies the HTTP 402 “Payment Required” code to enable standardized micropayments, but currently exposes payment amounts publicly on-chain.
Fhenix402 applies encrypted computation so that transaction amounts appear only in encrypted form on-chain. Wallets display directional balance updates without showing specific values during testing on Base Sepolia; payments of $0.10 and $4.02 produced identical encrypted on-chain representations.
“Transaction details can’t be distinguished because the amounts are encrypted,” said Zyskind. “The results show that private payments can be fast, composable, and intuitive.”
Potential Uses for Private Micropayments
Private micropayments can support a broad set of applications, including:
- Confidential subscription models
- Anonymous tips and donations
- Bidding processes that conceal amounts until closing
- Pay-per-use API access
- Private business analytics
- Detection of irregular activity using encrypted inputs
- Privacy-preserving AI and automated agent workflow
These applications rely on the combination of Ethereum’s programmability, access via Base, and privacy from FHE-based computation.
Upcoming Developments
The Fhenix402 experiment revealed several areas for improvement across the broader privacy ecosystem. These include encrypted approval flows, reduced-cost FHE operations, and simplified user interfaces. Fhenix continues to explore these gaps in its CoFHE environment to support scalable private computation for public networks.
About:
Fhenix is a blockchain company focused on Confidential Fully Homomorphic Encryption (CoFHE), a type of cryptography that enables computation over encrypted data. The company’s work applies FHE to programmable blockchain systems, supporting privacy-focused payments, DeFi, AI workloads, and enterprise applications.
More information is available at fhenix.io.