Fhenix aborbs Sunscreen and hires founder in push to build quantum-safe privacy infrastructure

Fhenix, a Miami-based startup building encrypted infrastructure for Ethereum, has announced that it has acquired Sunscreen, one of the earliest teams working on fully homomorphic encryption in Web3, according to a Thursday disclosure. 

As part of the terms of the deal, Sunscreen’s founder Ravital Solomon will also be joining Fhenix to lead research, the companies said.

Building for institutional demand has become a top priority 

Encrypted computation for a very long time was an interesting discussion in the research community left for the curious minds; however, recently, it has moved from just a field of curiosity to being pitched as a necessity, especially in the face of the recent and projected developments in quantum computation. 

Basically, this layer of privacy has been upgraded to the highest level of criticality for institutions moving stablecoins, tokenized assets, and trading strategies because public blockchains, where transaction details are otherwise visible to anyone, is not an option.

Grayscale and other market observers have reported the outsized influence that institutional players have had on this market cycle. Even the Ethereum ecosystem launched its biggest response yet to that demand with the introduction of Ethereum Institutional yesterday, July 1, as reported by Cryptopolitan. 

The Fhenix acquisition of Sunscreen is the latest indicator of that strategic shift, as two of the field’s more established names consolidate under one cooperative umbrella

What did Fhenix buy and why?

Fhenix has built its case around CoFHE, its encrypted computation infrastructure for EVM applications, which is live on Arbitrum and Base.  

Fhenix had identified threshold decryption and post-quantum features as roadmap additions in its campaign for developer mindshare.

Fhenix founder Guy Zyskind shared in a statement that Fully Homomorphic Encryption (FHE) is entering a new phase, adding that the field has moved past questions of whether encrypted computation works and toward making it scale.

What does Fhenix gain from Solomon and Sunscreen?

Ravital Solomon co-founded the company in 2021 alongside NuCypher veteran MacLane Wilkison. They opened it to the public the following year with a compiler that was designed to make FHE programs easier for engineers to write. 

The company raised around $5 million from Polychain Capital, Coinbase Ventures, and others. 

Fhenix, on the other hand, has raised more than $22 million, including a $15 million Series A led by Hack VC with participation from Amber Group and Primitive Ventures. 

Fhenix acquiring Sunscreen is seen as a deal that is as much about people as it is about the business itself. It also works out for both companies in terms of consolidating resources to amplify results at a time when smaller FHE research shops have increasingly become acquisition targets due to the growing resource gap with well-capitalized rivals.

Speaking about the deal, Zyskind wrote that: “Bringing Ravital and Sunscreen’s assets into Fhenix allows us to move faster toward our goal of building the quantum-safe privacy layer for Ethereum, Arbitrum, Base, and beyond.”

The company stated that the combined team that comes out of this acquisition will amplify its research and engineering capabilities across BFV, TFHE, threshold cryptography, compiler design, and confidential application architecture, areas that is Solomon is experienced in.

Solomon shared similar expectations for the future, stating, “What excited me about joining Fhenix is the combination of ambitious research and a clear path to deployment.”