Kyle Samani, Partner at Multicoin Capital: Prefer FHE over TEE and ZKP

On October 23rd, Kyle Samani, a partner at Multicoin Capital, joined the crypto community's recent heated privacy discussion in a post on X, saying that assets are more important than privacy, and for 99% of people, the risk of volatility far outweighs the benefits of privacy. There are three main ways to achieve on-chain privacy: Trusted Execution Environment (TEE), Zero-Knowledge Proof (ZKP), and Fully Homomorphic Encryption (FHE). When thinking about which approach is optimal, three variables are important: A, permissionless; B, the ability to execute arbitrary DeFi; and C, algorithm + chip scaling performance. But TEE doesn't work in non-permissioned environments, and B is where ZKP fails. He cites the recent surge in privacy project Zcash as an example. When you submit an anonymous Zcash transaction, the transaction cannot actually see or interact with anyone else's assets, and DeFi cannot be done. Whereas FHE allows computation on encrypted data, privacy DeFi with an FHE structure is simple. Therefore, he says he prefers FHE.