If you are asking whether there are any significant fundamentals approaching FHE (Fully Homomorphic Encryption), the answer is unequivocally yes – and I think
the year 2026 will be quite interesting in this regard.
2026 will be quite interesting in this regard.
The biggest shift I see is that FHE is finally ceasing to be purely an academic affair and is starting to be realistically integrated into production use cases. We are talking about the first usable FHE smart contracts, confidential DeFi, where the risk of front-running and MEV could disappear, and generally about computations on sensitive data – whether it's AI models, identity, or healthcare. I believe this is a key moment because FHE thus gains real economic significance, not just theoretical potential.
As for specific projects, the Privacy Stewards of Ethereum initiative is running in the Ethereum ecosystem, which combines FHE with ZK and stealth addresses with the aim of bringing privacy to L2 and the application layer.
Midnight from Cardano has a mainnet planned for the end of 2025 and should transition to a federated mode during 2026 – FHE plays a role as a core privacy technology there. Even Shibarium announced planned FHE integration in collaboration with Zamu, although I consider this more of a media stronghold than something fundamentally groundbreaking.
Of course, it is necessary to mention the main brake on FHE, which is performance. Today, FHE computations are roughly 5,000× to 60,000× slower than regular plaintext operations, which is just a lot. However, GPU acceleration, specialized hardware like FPGA or ASIC, and new optimized libraries are approaching. If performance improves by even one order of magnitude, FHE becomes practically usable for a much wider range of applications.
Among companies and projects to watch, I would mention Zamu as a leader in FHE libraries, Fhenix for confidential Ethereum smart contracts, and Inco for combining FHE with access control in Web3. The FHE Conference in March 2026 will also be interesting, where real breakthroughs are traditionally announced.
Overall, I would summarize that the fundamentals are indeed approaching, but mass adoption is not yet here. FHE is today at a stage that reminds me of ZK-SNARKs around 2017-2018 – that is, something for longer-term bets and more for those interested in infrastructure than quick profits.
