2026-01-09 05:28:24

If the blockchain wants to enter the world of traditional finance, there are two core issues: how to protect privacy and how to meet regulatory requirements. Bitcoin's public ledger is a nightmare in terms of compliance, and even Ethereum's robust ecosystem can't solve the embarrassment of sensitive data being visible across the network. This directly leads to institutions being hesitant to enter on a large scale.

In 2018, the Dusk Foundation was established in the Netherlands, taking a different approach. They chose not to forcefully tinker on both ends but instead used technical means to embed privacy and regulatory audits into the same chain—Dusk Network as a Layer 1 public chain, explicitly positioned to serve regulated financial markets, especially in the European Union. The goal is clear: to bring the issuance, trading, and settlement of real-world assets (RWAs) entirely on-chain, while complying with EU financial regulations like MiFID II and MiCA.

Technically, they operate as follows: using zero-knowledge proofs (ZK) as the core engine, they developed Confidential Security Contracts (XSC). During asset transactions, privacy data is encrypted, making it a complete black box to other participants. However, the Phoenix 2.0 privacy model is cleverly designed to leave an audit trail for regulators—transactions can be traced when necessary, so it’s not an absolute black box.

This approach is considered innovative among privacy-focused public chains. The core team members, Emanuele Francioni and Fulvio Venturelli, have long been engaged in the intersection of blockchain privacy and financial compliance. Their understanding of industry pain points is not just theoretical. In short, they have found a balance between "privacy protection" and "traceable compliance."

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ContractTester

· 11h ago

Hey, this approach is indeed different. The combination of ZK + audit channels feels like it hits the pain points of traditional finance. Finally, someone understands that privacy and regulation are not mutually exclusive issues. Dusk's move here is a true understanding of the EU's approach, unlike some projects that just shout slogans. If this can really be rolled out, the RWA track might see a major change. By the way, how exactly do they verify their XSC mechanism? Are there real projects using it? But it still depends on implementation. No matter how beautiful the technical paper is, it’s useless without practical application.

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GateUser-ccc36bc5

· 12h ago

This idea is indeed clever. Privacy and regulation are not mutually exclusive... But can Dusk really capture the EU market? The ZK technology sounds impressive, and the idea of leaving an audit trail for regulators is also good. I'm just worried that it might be well-received but not popular. These guys are not just talking on paper; to be clear... the question is, do institutions really dare to trust it? It seems that only after running the RWA on-chain can we see if it works. No matter how good the hype now, it's all talk. The privacy model in Phoenix 2.0... can it pass compliance reviews? It still depends on how the EU side promotes it. It's interesting, at least they've thought of a way to cater to both sides, unlike BTC and ETH, which are more black-and-white. The biggest concern for institutional entry is policy risk. Is Dusk's positioning in the EU smart or just gambling?

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LiquidationAlert

· 01-09 18:09

This is the right approach, not a binary choice between one or the other. It truly finds the balance point. Privacy and compliance can coexist, and this is the key for institutional entry. The zk proof system is indeed impressive; it keeps the black box black, but regulators can still see through it—pretty powerful. Rather than just talking on paper, it's better to take real action. These people really know their stuff. Will the EU really accept this kind of solution? It still feels a bit too optimistic. Finally, someone who doesn't just shout slogans but moves towards compliance—there's hope. This approach is much more sensible than those projects that only hide from regulation.

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LiquidatedTwice

· 01-09 05:57

To be honest, this combination of ZK+privacy auditing does have some substance, but whether the EU regulators will truly buy it remains to be seen. The threshold for institutions to enter is indeed a deadlock between privacy and compliance. Dusk's approach isn't revolutionary, but it's a step in the right direction. Wait, how do they ensure that the auditing channel itself won't become a loophole for privacy leaks? Could the backdoor provided to regulators be exploited by others... The team seems to have real talent, but I'm more concerned about whether this chain can truly support some practical RWA projects. No matter how advanced the technology is, there needs to be real implementation. If this thing can really meet the EU's requirements, there might be a flood of copycats later. The privacy public chain track is becoming a bit crowded now.

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not_your_keys

· 01-09 05:56

Dusk's approach is indeed different, but honestly, no one has really mastered zero knowledge technology yet. Speaking of privacy and regulation, if they can truly be balanced on a single chain, traditional finance would have disappeared long ago. It seems a bit uncertain. The EU folks are indeed strict. After dealing with MIFID II, you realize how outrageous it is. Dusk's positioning is quite clear. ZK technology has been hyped a lot in recent years, but there are very few that are actually usable. Let's wait and see. Institutions have never lacked technical reasons to enter; political considerations are the bottleneck. Dusk can't change that either.

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CryptoMom

· 01-09 05:56

Now we've really found the trick—privacy and regulation can indeed coexist... But will it really be implemented? Wait, could this ZK audit channel become a new vulnerability... This approach is much more practical than those who just shout slogans. Dusk is really doing real work this time. If they manage to take over the EU financial market... that’s something. Privacy black box combined with regulatory tracking feels like paving the way for scaled financing. Will institutions dare to enter? Zero-knowledge proofs should have been used this way all along, not just for hiding dirt...

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FallingLeaf

· 01-09 05:49

Wow, finally someone came up with this idea? Privacy and regulation are basically mortal enemies, and insisting on forcing them together—who do you trust? But the Dusk approach is indeed interesting, with the ZK setup combined with audit backdoors... It feels like giving regulators a "透视镜" (x-ray vision) without truly destroying privacy? A bit provocative. The EU folks are strict—MiFID II, MiCA, anyway, traditional finance has to kneel if it wants to go on-chain. Dusk targeting the EU market directly is really clever, taking a shortcut. It should have been played like this a long time ago—the Bitcoin ledger is just a joke... institutions definitely dare not touch it. This balance point... sounds great, but will it really work in practice? Or will it get stuck somewhere? The team seems reliable, unlike some projects that only know how to hype concepts. Can privacy and compliance truly coexist? I'm a bit skeptical. Hopefully. Regarding RWA on-chain, if the EU really promotes it, this chain might indeed have a chance. Zero-knowledge proofs are now standard, but very few have truly integrated into the regulatory framework. Dusk might have hit the right spot.

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ZenZKPlayer

· 01-09 05:37

Yeah, this idea is indeed pretty good. Finally, someone is seriously thinking about this longstanding difficult problem. ZK is definitely a way out, but the concern is whether it can be practically implemented. It's no longer an all-or-nothing approach; leaving an audit backdoor for regulators is quite a clever move. To be honest, those privacy coins before were either banned or disliked. Dusk might be the right direction. Institutions are afraid to enter the market; it's mainly a trust issue. This design at least allows people to sleep well at night. The EU is indeed very strict, but from another perspective, strict regulation also means opportunities. Let's give it a try. Someone has to take the first step, and it's more interesting than just competing over TPS. It sounds like a very professional team, but it still depends on whether it can run smoothly in practice. If this system can be successfully implemented, it might become a benchmark. How can other chains learn from it?

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