I'll use confidential lending (an Aave-style overcollateralized lending market on Ethereum) as the use case, and explain what I'd keep confidential while preserving composability. What I'd keep confidential: - Collateral amount and composition: how much ETH or USDC a user has posted, and in which assets. Visible collateral invites targeted liquidation hunting and copy-trading of positions. - Debt balance and health factor: the exact borrow amount and liquidation threshold proximity. If the health factor is public, MEV bots can pre-position to trigger or profit from liquidations at the precise moment a position becomes unhealthy . - Borrow/repay intents before execution: pending actions visible in the mempool enable front-running and sandwiching around large position changes. - User position linkage across markets: if an address's positions across multiple lending markets are all public, an observer can reconstruct a full balance sheet and strategy. Why composability must survive: The whole point of an onchain lending market is that the receipt tokens (like aTokens) and debt positions plug into the rest of DeFi—other protocols need to accept them as collateral, DEXs need to price them, and aggregators need to route through them. Privacy that forces assets into a shielded pool or a separate chain breaks that . A user shouldn't have to exit privacy to use their position in the broader ecosystem. How Fhenix's approach fits: CoFHE lets the lending contract compute on encrypted handles—interest accrual, collateral checks against oracles, and liquidation eligibility can all run on ciphertext without ever decrypting individual balances . The contract still uses familiar Solidity and `FHE.sol` operations, so the lending market remains a normal EVM contract that other protocols can call. Fhenix's dual-mode token concept is especially relevant here: an asset can stay confidential by default but switch to public mode when a specific integration genuinely requires plaintext balances, without wrapping or leaving the chain . That preserves the composability path—a DEX that can't handle encrypted balances yet can still interact with the public mode of the same asset, while the user's core lending position stays shielded. @fhenix