Privacy remains one of the main issues of blockchain. Complete transparency of networks limits their functionality, making many use cases impossible. Arcium offers an alternative: data processing without disclosure. The project positions itself as a high-performance 'encrypted supercomputer' that combines cryptography and multi-party computation.
In this review, we explore how Arcium works and whether the project can establish fundamentally new standards for on-chain privacy.
The problem of data protection in decentralized networks and possible solutions
One of the foundational principles of public blockchains (except for confidential networks like Monero) is transparency, which allows every user to view the transactions of any wallet at any time. However, this openness often poses a barrier to maintaining the confidentiality of personal and corporate data, which is widespread in traditional finance.
In conditions where institutional investors, venture funds, and companies seek to protect the details of their deals, full transparency of the blockchain turns from an advantage into a disadvantage, complicating the adoption of the technology. To solve this problem, a number of solutions have emerged that ensure privacy in specific processes and aspects.
Zero-Knowledge Proofs (ZKP) — allow the confirmation of the truth of a statement, for example, the existence of sufficient funds for a transaction, without disclosing the input data.
Fully Homomorphic Encryption (FHE) — allows processing of encrypted data, but at the same time requires significant computational power.
Trusted Execution Environments (TEE) are isolated and secure execution environments within hardware devices, where data can be processed securely.
Multi-Party Computation (MPC) — allows several participants to jointly perform computations without disclosing their data to each other, making this method the most versatile for ensuring privacy.
Each of these technologies protects individual data at various stages of user interaction with the blockchain or a specific protocol, but does not ensure end-to-end confidentiality across the entire network. According to Arcium developers, such 'privacy 1.0' is characterized by fragmentation and focuses on protecting the 'private' state of an individual user rather than the public state of the blockchain.
To enhance data protection in decentralized networks, Arcium offers the concept of 'privacy 2.0'. By using MPC technologies and cryptography, the project developers create an infrastructure where privacy is a 'default' property of the blockchain, and operations with encrypted data are performed faster and more efficiently than with existing solutions.
What is Arcium
Arcium is positioned as a decentralized encrypted computing network or 'supercomputer', enabling developers and users to work with data without revealing it.
In most existing encryption systems, encryption is only applied during storage (at rest) and transmission (in transit) of data. This also applies to the blockchain, where, for example, ZKP allows protecting transmitted information, while cryptography protects stored data. Arcium adds another layer of protection — during computations (in use).
This means that the information remains encrypted at all stages of processing, making theft, leakage, or misuse technically impossible. This approach enables the secure use of confidential information in DeFi, AI platforms, and other areas where data protection plays a crucial role.
The architecture of the Arcium network
Arcium is a decentralized computing network created for confidential data processing. It combines several key components that ensure the security, scalability, and reliability of the system. Let's break down each element of the Arcium architecture and its role in the system.
arxOS
arxOS is the software shell that manages all processes in the Arcium network, including:
coordination of node operations — the system automatically distributes computations among nodes, selecting those that are most suitable in terms of power and reliability;
performance monitoring — arxOS tracks the status of each node and cluster, preventing failures and overloads;
ensuring security — the operating system implements failover mechanisms and prevents unauthorized changes in the computational processes.
At the same time, arxOS is decentralized and operates autonomously on each node of the network, eliminating a single point of failure.
Arx Nodes
Arx Nodes are independent servers (nodes) that perform computations within the Arcium network. They take on tasks, execute them in encrypted form, and transmit the results without having access to the input data. Each node consists of two key components:
hardware — a node must meet minimum computational power requirements, as complex cryptographic operations require resources. Operators declare the technical specifications themselves, and those who overstate their performance and fail to cope with the load are subjected to slashing;
software — the operation of nodes is coordinated by the aforementioned arxOS, while the computations occur within special MXE environments (more on this below).
To ensure data protection, nodes use specialized solutions, including cryptography, MPC protocols, and TEE.
Clusters
Arx Nodes are combined into clusters, within which they jointly perform multi-party computations. If a node fails or operates slowly, the system redistributes its tasks among others.
Clusters can operate under several trust models:
honest curiosity (Honest but Curious) — all participants behave according to the protocol rules, while trying to gather as much data as possible. The information itself remains encrypted in this case;
honest majority (Honest Majority) — the system maintains the confidentiality and integrity of the data if at least half of the nodes in the cluster behave honestly;
full resistance to attacks (Dishonest Majority) — computations remain protected as long as at least one node in the cluster adheres to the protocol rules.
Clusters allow Arcium to maintain flexibility, reliability, and scalability by effectively distributing tasks among nodes.
MXE (Multi-Party eXecution Environments)
MXE — are virtual environments where computations take place. They allow for mathematical operations on encrypted data without decrypting it, ensuring confidentiality at all stages of processing. Each MXE represents an isolated execution environment in which the input data and processing results remain encrypted. There are two main types of MXE:
one-time — created to perform a specific task and destroyed immediately after completion, leaving no data traces;
persistent — remain active and can continuously process new incoming data. This is useful for long-term computations, such as training AI models or executing smart contracts.
MXEs are distinguished by their flexibility and configurability, allowing developers to choose the level of security, encryption algorithms, and data storage policies.
the basis of the entire system lies in the aforementioned multi-party computations. They allow multiple nodes to jointly perform an operation without disclosing the input data, as each node processes only its part of the information. At the end of the processing, the results are combined into a general answer, which can only be decrypted by the recipient.
At the same time, Arcium uses two MPC protocols:
Cerberus — guarantees maximum protection, maintaining confidentiality even in the event of attacks from the majority of nodes;
Manticore — offers higher computational speed but requires a more trusted environment.
The choice between these protocols allows users and developers to tailor security to specific scenarios.
Integration with the blockchain
Arcium was initially developed as a blockchain-agnostic solution, but at the first stage of development, the project chose Solana as the base ecosystem. This is due to the high throughput and fast transactions of the network, which are necessary for managing computational processes.
The blockchain ensures three key functions of Arcium:
node management. Solana acts as a coordination layer that ensures the registration and configuration of nodes, tracks their computational power, and records performance and reliability;
orchestration of computations. In Solana, task distribution in Arcium occurs, including gathering tasks from users and applications, adding them to the mempool, forming a cluster of nodes, and verifying the correctness of the completed calculations;
network economics. Solana also manages the incentive mechanisms of Arcium, including rewards for nodes for completed computations, staking for access to computations, and penalties for dishonest node operations.
However, although
is the first integrated blockchain, and in the future, the project will be able to operate in other ecosystems as well. In particular, Arx Nodes will be able to perform tasks in various networks, choosing the optimal infrastructure considering load, transaction costs, and speed, while Arcium will ensure synchronization of results.
Capabilities and use cases of Arcium
The ability to work with encrypted data without disclosing it allows for an expansion of the blockchain's application scope, as well as increasing the diversity and functionality of decentralized products and applications.
Thus, Arcium provides developers with a platform for creating decentralized applications where security and privacy are implemented 'by default'. For example:
confidential DeFi platforms. Developers can create financial services where users interact with contracts without disclosing personal data or their trading strategies. This makes it possible, for example, to have anonymous liquidity or untraceable transactions;
secure AI training. Companies can use confidential datasets to train AI models without violating regulatory norms and without putting personal information at risk of theft or leakage;
anonymous auctions and marketplaces. Arcium allows the creation of trading platforms where users can bid or make deals without disclosing personal information, which is especially important for the B2B segment;
A more practical example, not directly related to blockchain, is the use of private algorithms for partner matching in dating services or professional networks without disclosing their information.
Regular users are given full control over their data, allowing interaction with the blockchain without the risk of information disclosure. This opens up new opportunities:
secure data exchange and storage. Users can control access to their information, as well as transmit and analyze it without actual disclosure — this is relevant for medical research, corporate reports, and personal files.
protected trading. Arcium enables the creation of so-called 'dark pools', where large investors can conduct transactions without the risk of front-running and market manipulation;
private voting and prediction markets. DAOs and decentralized prediction markets can implement anonymous voting, where the results remain hidden until the final count;
Support and partners
According to CryptoRank, Arcium has managed to attract $9 million in two funding rounds, the latest of which took place in May 2024. Among the investors are leading venture funds and key industry figures, including Coinbase Ventures, Jump Crypto, Greenfield Capital, NGC Ventures, as well as Solana co-founder Anatoly Yakovenko and Monad co-founder Keon Hong.
Notably, the reinvestment occurred a year and a half after the first. This indicates that for a long time the team was actively developing the project, and investors maintained interest in it.
One of the important stages of the project's development was the acquisition of Inpher at the beginning of 2024. Inpher is a leader in the Web2 segment in the field of encrypted computing, which previously received support from giants such as JPMorgan and Amazon. This deal strengthened Arcium's position in the area of confidential data processing, adding experienced specialists to the team and expanding its technical base.
Moreover, the acquisition of Inpher opened Arcium access to an optimized technology stack for developing confidential AI solutions. This enabled the creation of a platform where machine learning models can be trained on encrypted data.
In March 2024, Arcium was included in the NVIDIA Inception program, which helps innovative startups develop AI-based products. The application area of confidential AI solutions created within this partnership covers healthcare, finance, scientific research, and defense. Additionally, participation in the program provides Arcium access to modern NVIDIA computing resources.
Additionally, it is worth noting that user interest in the project is high — over 40,000 applications have been submitted to participate in the closed testnet of Arcium, and nearly 400,000 NFTs have been generated as part of testing the network's functionality. At the time of writing, the platform is undergoing the final phase of closed testing, after which it will be ready for public launch.
Token and tokenomics
At the time of writing, there is no official information about the token, tokenomics, and distribution conditions of Arcium. However, there is a high probability that the platform will receive its own token in the future, as the developers have already launched activities related to a potential airdrop, and the network's operating model involves staking.
Thus, to activate an Arx node, a certain number of tokens need to be locked, allowing operators to participate in task distribution. Delegators, for their part, can transfer their assets to the latter, receiving a portion of the rewards for computations.
Although details have not yet been disclosed, it can be assumed that the Arcium token will perform several basic functions:
payment for computational power — users will likely use the token to initiate private computations on the platform;
rewards for nodes — node operators will receive tokens for their work while performing computations;
participation in network governance — the token may be used for voting and decision-making in the Arcium ecosystem.
Users are advised to follow project announcements on the website and social media to receive the latest information about the token, airdrop, or public sales of Arcium
Conclusions
As blockchain spreads, decentralized networks face the problem: transparency is useful but hinders privacy. Previously created solutions partially eliminate this barrier but remain either narrowly specialized or too resource-intensive.
Arcium offers a different approach — privacy as a fundamental property of the network. This is not just the protection of individual transactions, but a full-fledged infrastructure for encrypted computations demanded in DeFi, the corporate sector, AI, and when working with user data.
Even before its launch on the mainnet, the project attracted $9 million in investments, acquired Inpher, a company specializing in confidential computing, and entered NVIDIA Inception, confirming the developers' long-term strategy. Unlike many other Web3 projects, Arcium builds its technological base before launching its token, not the other way around.
However, the project faces challenges: competition with other solutions like Aleo and Aztec, regulatory risks, and the need for integration into the Web3 ecosystem. If Arcium overcomes these barriers, it could set a new standard for confidential computations in blockchain.
