The current conflict between privacy protection and regulatory compliance is becoming increasingly acute, but Walrus Protocol has found a unique way to break through — creating a controllable balance between private storage and compliant auditing.

As a native protocol on the Sui blockchain, Walrus's design approach is quite interesting. It defaults to hiding users' transaction amounts and counterparty information, providing basic privacy protection. But the key is that it also incorporates an audit hook mechanism, allowing regulatory authorities to view specific transaction details when necessary according to compliance procedures. In other words, users have privacy, but it cannot become a safe haven for bad actors — satisfying KYC/AML requirements without opening data to everyone. This "selective transparency" design indeed solves the compliance challenges faced by traditional privacy storage solutions.

From a technical perspective, Walrus adopts quantum-resistant encryption algorithms like CRYSTALS-Dilithium and FALCON, meaning that even if quantum computing technology matures in the future, data stored on Walrus will remain secure. This is not just hype but a pragmatic, forward-looking consideration.

This "privacy-first, compliance-optional" architecture appeals to different players. Ordinary users gain true data sovereignty, while institutional users like banks and enterprises obtain secure and controllable storage solutions. Under the trend of tightening global regulations, Walrus's dual attributes of protecting privacy while allowing regulatory inspection are expected to open up demand from traditional industries for Web3 storage, serving as a bridge connecting the Web3 world and the traditional financial system.