Another new technology is about to explode! (FHE) Fully Homomorphic Encryption, known as the 'Holy Grail of Cryptography', is entering high-value fields such as DeFi with the performance breakthroughs of projects like Mind Network.

DeFi will take the first crown of FHE—not because it is the most important, but because it most starkly caters to human nature's desire for 'privacy profits.'

Previously, DeFi needed bots on Ethereum to spy on trading pools for arbitrage, extracting over $1B in profits each year, while users wanted to hide their positions and needed to prove asset compliance (such as avoiding OFAC sanctions).

But FHE is different!

Blockchain inherently requires 'verifiable encryption', but FHE + ZK can construct a 'input-computation-output' full-link dark forest, where dark pool trading order books are fully encrypted.

Using FHE to encrypt balances and ZK to prove 'assets > 0 and not money laundering' can achieve compatibility between privacy and regulation. It can be seen as the first torch in the dark forest.

- Ready-made cases:

- Mind Network collaborates with dYdX to test the FHE order book, achieving a zero success rate for MEV bot attacks.

- An anonymous team develops 'FHE-stablecoin', with collateral verification not exposing positions.

FHE allows DeFi to satisfy FATF 'Travel Rule' while achieving true privacy; currently, there are compliant exchanges in Hong Kong conducting interface tests.

The crypto community's worship of FHE is nearly religious now.

In the next 1-2 years, DeFi will explode due to the 'wealth effect' and developer ecosystem; FHE dark pools and privacy lending will first reveal killer applications.