In the crypto world, many people borrow, lend, and invest through DeFi, but there is also a hidden concern:

"I don't want to expose my wallet address, nor do I want others to know how many assets I have, or even who I am."

But on-chain, everything is public. Once a wallet is exposed, others can even dig out your transaction history and holdings, making it clear whether you have gone all in.

At this time, FHE (Fully Homomorphic Encryption) is like putting on an 'invisibility cloak'.

1. What is FHE?

Fully Homomorphic Encryption (FHE) is a technology that allows AI or smart contracts to process data without decrypting it.

Simply put:

  • Your asset information is encrypted, and others cannot understand it;

  • Smart contracts can make judgments directly on encrypted data, such as whether you have enough collateral;

  • The whole process does not reveal who you are, and even the platform cannot see the real content.

2. Practical Applications of FHE in DeFi:


✅ Privacy Lending

You want to use coins as collateral to borrow money, but you don't want to expose how much assets you have.

Traditional method: You publicly disclose your wallet address and the amount of collateral.

Using FHE: You upload 'encrypted collateral information', the contract assesses whether it's qualified, and directly disburses the loan, with no one knowing what you collateralized.


✅ Credit Scoring System

The future of DeFi will have 'credit scores' like Ant Financial's Jiebei in Web2, determining whether you can borrow and the interest rate.

With FHE, you can submit an 'encrypted credit score' to the platform, which sets your interest rate,

but no one can know your specific credit score,only that you 'passed'.


✅ Stablecoin Minting with Collateral

Stablecoins like DAI generally require collateralized assets to mint, but the collateral is public.

FHE allows you to collateralize encrypted assets, even multiple platforms can jointly assess if it’s qualified, but the collateral details are not publicly disclosed.

🧠 An example easy for beginners to understand:

Suppose you collateralized 1000 ETH with wallet A on the platform to mint stablecoins.

What the platform sees is:
Wallet A → Encrypted collateral information → Assessment passed → Issuance of stablecoins

What outsiders see is:
Wallet A → ??? → Obtains stablecoins

The platform cannot see what you collateralized, and others cannot see how many assets you have. You become the 'invisible person' on the chain.

📈 Why is this valuable?

According to Electric Capital data, by the end of 2024, more than 300 million on-chain addresses will have participated in DeFi. Privacy concerns are becoming increasingly serious.

FHE + DeFi is like HTTPS + bank transactions:

  • Previously, information was exposed; now it is transmitted encrypted;

  • Previously, wallet assets were clear; now operations are securely invisible;

  • User privacy is stronger, making it more difficult for hackers to succeed.

🔚 Conclusion

FHE is like the 'invisible cloak' of DeFi, allowing every on-chain operation to be freer and safer:

Participate in financial games without exposing yourself;

Earn clearly without being seen.

This is how DeFi should be.@Mind Network @BNBxyz
#MindNetwork全同态加密FHE重塑AI未来