Everyone knows the dilemma of privacy chains—transferring privacy is easy to implement, but once DeFi is involved, it becomes complicated.

Currently, many privacy blockchains stay at the stage of "I can transfer secretly," but building a DeFi ecosystem hits a wall. The reason is straightforward: AMMs need visible balances and liquidity curves for pricing, lending requires real-time collateral ratios and liquidation thresholds for risk control, options and derivatives need verifiable position data—if all these data are fully private, the system becomes a black box, ultimately leading to either poor user experience or unreliable security, with no third option.

So how does Dusk break this deadlock? The core idea is worth noting: it’s not an either/or choice, but about finding a middle ground.

What exactly is the approach? Lock users’ sensitive information—balances, counterparties, transaction amounts—by default. But at the same time, provide a set of "provable state" interfaces. It may sound a bit complex, but in essence: you don’t need to reveal the specific amount of collateral, but can prove with zero-knowledge proofs that your collateral ratio is always above the safety threshold; you don’t need to disclose position details, but can prove you meet the platform’s risk control requirements; transaction paths don’t need to be shown, but you can prove that the transaction doesn’t violate blacklist, quota, regional, or other restrictions.

In other words, privacy isn’t about turning the entire system into a mystery, but about achieving "what needs to be public, public; what needs to be kept secret, secret," while keeping verification logic transparent and auditable.

The impact of this design on practical applications is worth looking forward to. First, large transactions don’t need to be exposed to the entire network, reducing targeted risks. Second, the entry barrier for institutional funds into the chain will decrease—they don’t require "absolute anonymity," but rather "compliance auditability + protection of business secrets," a combination that aligns with traditional financial institutions’ needs. Third, when facing audits or regulation, there’s no need to dump all transaction history at once; generating verifiable proofs on demand is safer and more controllable.

If the Dusk ecosystem later develops products like "compliant lending pools," "privacy market makers," or "permissioned RWA trading," the key point to observe is whether these applications use zero-knowledge proofs to "demonstrate compliance with risk control constraints," or simply hide transaction information. The former is true innovation; the latter is at best a rebranding.