Zero-knowledge proofs are called "cryptographic magic" for a reason—they are indeed the most explosive technology in the field of cryptography. But the real-world problem is that there is a huge gap, almost a chasm, between academic papers in the lab and products that can actually be used.

A team has been working on bridging this gap. Their approach is very clear—package those deep, complex ZKP technologies used in academia into tools that financial developers can directly use. What's the benefit of doing this? Unlocking commercial potential—that's currently the biggest gap in blockchain privacy.

Think about how uncomfortable it is to conduct financial activities on a transparent blockchain. Once a transaction strategy is on-chain, it’s monitored, and front-running risks skyrocket. Corporate tokenized assets and liability details are fully exposed, and every step of portfolio adjustments is watched by the entire network. For institutional investors, this is a nightmare—business risks and information disadvantages coexist.

The "Confidential Smart Contract" paradigm is designed to directly address these issues. What can it do?

First, confidential auctions and fundraising. Suppose a company wants to conduct a private placement or bond issuance on-chain. With this solution, it only needs to disclose terms to a qualified investor group verified through KYC/AML, and each investor’s bid remains hidden from others. This creates a more genuine price discovery mechanism. All parties’ business intentions are protected, and no one can arbitrage from others’ bidding actions.

Next, confidential trading and dark pools. For large asset swaps or trades, transaction details, specific quantities, and transaction prices are completely black-boxed before settlement. Market impact disappears, and the risk of information leakage is eliminated. This is a real necessity for institutional investors.

In simple terms, privacy is not about avoiding regulation, but about enabling on-chain finance to truly support institutional-grade applications. Currently, unless the transparency of the chain can solve privacy issues, it’s hard to attract serious financial players.