Fhenix proposes a dual-mode token standard enabling public DeFi composability with optional privacy features.
Tech & Launches ·
Fhenix has proposed a dual-mode token standard that allows a single asset to operate in both public and confidential states, addressing what the protocol describes as a longstanding tradeoff between decentralized finance composability and privacy. Under the model, users maintain two balance types for the same token at one canonical address: an unshielded balance that functions as a standard ERC-20 and remains visible for compatibility with existing DeFi infrastructure, wallets, and exchanges; and a shielded balance where transfer amounts and holdings are encrypted.
The dual-mode approach consolidates public and confidential balances within a single token contract rather than requiring users to wrap assets into separate shielded versions. This design aims to eliminate fragmented liquidity and reduce user friction—users need not manage multiple addresses or approvals for privacy-enabled transactions. The proposal acknowledges that the privacy-composability tension persists: the shielded side offers encrypted balances and transfers but maintains more limited compatibility with existing DeFi and wallet infrastructure, while the public side retains full protocol integration.
The model does not encrypt sender, receiver, and transaction timing data onchain, leaving those details visible. It remains unclear how widely the standard might be adopted or which DeFi protocols and wallet providers would implement support for the dual-mode mechanics in practice.