Blockchain technology company Fhenix has released Nitrogen, an upgraded testnet for its Layer 2 network that incorporates Fully Homomorphic Encryption (FHE). The release marks a significant development in blockchain privacy technology, introducing new decryption capabilities ahead of its planned mainnet launch.

The Nitrogen testnet implements the Threshold Network as its core decryption mechanism, aimed at increasing network decentralization. This system processes encrypted data while maintaining security protocols essential for blockchain operations. A key technical addition is the Parallel Decryptions feature, which addresses performance challenges typically associated with FHE operations. The system utilizes asynchronous decryption to manage computational demands more efficiently.

The upgrade introduces two distinct Security Zones for developers. Zone 0 operates as the default setting with enhanced security measures, while Zone 1 focuses on performance optimization using a single local keyset managed by the sequencer for decryption processes. "The Nitrogen testnet advances our goal of creating a permissionless, censorship-resistant platform for confidentiality with FHE," stated Fhenix CEO Guy Itzhaki.

Technical improvements include integration with Celestia for data availability, which aims to reduce transaction costs. Developers can now access a native random number generation function through FHE.rand(). The testnet operates as an Ethereum Layer 2 solution, maintaining EVM equivalence to allow developers to continue using Solidity for smart contract development. This compatibility enables selective encryption of smart contracts using FHE technology.

Fhenix's implementation targets specific challenges in blockchain privacy, particularly in areas of smart contract confidentiality, transaction privacy, and secure asset management on the Ethereum network. The system aims to provide these features while maintaining the fundamental benefits of blockchain technology, including transparency where appropriate and decentralized operation.

The Nitrogen release represents the latest development in blockchain privacy technology, as the industry continues to address the balance between transparency and confidentiality in distributed ledger systems. This update precedes Fhenix's planned mainnet launch, though specific timing details remain unannounced.

The platform continues testing and development, focusing on security and performance optimization before full deployment. Developers can access the testnet to build and test confidential applications within the current framework.

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