Overview
Inco Network is building a modular confidential computing layer using Fully Homomorphic Encryption (FHE) that can provide encrypted state management to any blockchain. Rather than being a standalone L1, Inco positions itself as a "confidential computing chain" that other chains and rollups can plug into for privacy features. This modular approach is architecturally elegant — instead of building private alternatives to existing chains, Inco adds privacy to them. The project uses Zama's fhEVM technology and is pre-mainnet.
Technology
Inco's architecture combines fhEVM (FHE-compatible EVM) with cross-chain messaging to deliver encrypted state as a service. Smart contracts on any EVM chain can request confidential computation from Inco, receive encrypted results, and verify them. This is technically ambitious — it requires solving FHE performance, cross-chain communication latency, and encrypted state synchronization simultaneously. The modular positioning is compelling but multiplies technical complexity.
Security
Security inherits the strengths of TFHE cryptography and the challenges of cross-chain architecture. Cross-chain confidential computation adds attack vectors at the messaging layer — encrypted data traversing bridge protocols introduces new trust assumptions. The threshold network for FHE key management is a critical security component that hasn't been tested under adversarial conditions.
Decentralization
The network is in early testnet with centralized operation. Plans for decentralized validator sets and threshold key management exist but are not yet implemented. The dependency on Zama's FHE library also introduces a form of technical centralization, as Zama controls the core cryptographic implementation.
Ecosystem
The ecosystem is pre-launch with developer tools and testnet applications being the primary activity. The modular approach theoretically gives Inco access to existing ecosystems on partner chains, but actual integrations are limited to proof-of-concept stage. The confidential DeFi use cases (dark pools, sealed auctions, private lending) are compelling but unproven.
Tokenomics
No token has been launched. The expected token model will involve staking for validators, gas payments for confidential computation, and governance. Backed by notable investors. Specific tokenomics are pending and dependent on mainnet launch timeline.
Risk Factors
- Pre-mainnet with no production deployment or proven performance metrics.
- FHE performance overhead makes real-time DeFi applications currently impractical.
- Cross-chain architecture compounds technical and security risks.
- Dependency on Zama's FHE library creates external technology risk.
- Competing with Fhenix and other FHE projects for the same limited developer pool.
Conclusion
Inco's modular approach to FHE confidential computing is architecturally elegant and addresses a real market need. However, the project is deeply early-stage, with FHE performance limitations being the binding constraint. Success requires both FHE technology maturing and real demand for on-chain confidentiality emerging — neither is guaranteed near-term.