2026-01-17 06:32:14

Recently browsing discussions on major platforms, I see a bunch of projects shouting RWA, DeFi 2.0, and institutional-grade applications at the forefront. The problem is, there are very few that actually implement privacy and compliance—two seemingly contradictory requirements—at the protocol layer. Most are still at the stage of just talking about it.

I’ve been observing the Dusk Network project recently, and it handles this contradiction quite differently.

The core point is this: it doesn’t simply and crudely impose ZK technology outside the EVM framework, nor does it just create a privacy Layer2. Instead, from the genesis block, it has built confidential smart contracts as a native capability. The project uses the XSC virtual machine, which supports native confidential computing. Its transaction model adopts a hybrid design—some transactions are in plaintext, others are confidential. This way, it can run standard DeFi products while also handling scenarios with extremely high privacy requirements: security tokens, supply chain finance, carbon credit trading, and more.

More importantly, it retains two interfaces at the protocol layer—selective disclosure and verifiable computation. This means regulators or authorized third-party auditors can verify whether transaction amounts are within limits, whether KYC/AML has been passed, and whether issuers have violated regulations, all without viewing all the details. For traditional financial institutions, this is a real necessity because they cannot put business secrets and all transaction data on the chain publicly.

Imagine this scenario: a European private equity fund wants to put fund shares on the chain and sell them to qualified investors. Using a traditional public chain? Either all data is public (which is absolutely unacceptable), or they use mixers or privacy Layer2 (but then they can’t prove to regulators that they are compliant). It’s a deadlock. Dusk’s mechanism truly unlocks this deadlock.

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ProtocolRebel

· 01-20 06:31

Finally, someone has explained this clearly. Previously, those projects were hyped up, but when asked about the specifics, they went silent. Now I understand, privacy and compliance shouldn't be mutually exclusive... Dusk's approach indeed breaks the deadlock. Confidential transactions + verifiable computation, that's great, it really addresses the pain points of traditional finance. Wait, selective disclosure open to auditors... wouldn't that become a new centralized bottleneck? But compared to the projects that are just talking big now, at least they are actually doing something.

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SilentObserver

· 01-20 04:25

Finally, someone has really explained this issue. Most projects are indeed just showboating. Can privacy and compliance truly be compatible at the protocol layer? I used to think this was a false proposition. The hybrid transaction design of this XSC virtual machine is quite interesting; it doesn't sound like the usual Layer 2 approach. Selective disclosure to regulators for auditing without revealing all the details—that's probably what traditional finance wants. But how is Dusk's ecosystem doing now? Are there any real-world application scenarios?

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ChainWatcher

· 01-18 15:37

This is the real attempt to solve the problem, not those projects that just shout slogans. --- Is privacy and compliance really a dead end? The idea behind Dusk is indeed unique; the selective disclosure aspect is quite interesting. --- Wait, XSC virtual machine native confidential computing? Isn't this turning privacy into infrastructure? It's much more reliable than just layering over Layer 2. --- I'm just wondering why no one has done this before; it turns out some projects are actually designed this way from the ground up. --- The biggest fear in traditional finance is full data disclosure. Dusk's mechanism might really hit the core needs. --- Can regulatory authorities accept this approach? It still seems risky. --- Institutional-level applications must do it this way; otherwise, it's just a pseudo-demand.

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LiquidityWizard

· 01-18 07:59

Someone finally explained this thoroughly. Most projects are just empty talk... The selective disclosure design is truly brilliant. Regulatory authorities can investigate without having to review all data. This is the real innovation in mechanism, not just empty talk.

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SchrodingerProfit

· 01-17 07:02

Someone finally clarified this issue. Most projects are indeed just storytelling, and I think Dusk has grasped the pain point with this approach. Privacy and compliance are not mutually exclusive; it depends on whether your system design can hold up. The protocol layer's choice of selective disclosure is indeed clever. However, I still want to see how it performs in real-world scenarios. Being perfect on paper doesn't necessarily mean it will work well in practice. Will institutions really buy into this? That’s the key. Although the idea is good, has the ecosystem taken off? Without an ecosystem, everything is pointless. Compliance is indeed the biggest hurdle for traditional finance to go on-chain. If Dusk can truly stabilize this aspect, it’s definitely worth paying attention to. By the way, can the set of selective disclosure withstand repeated audits and regulatory scrutiny? It doesn’t look like a project trying to scalp users, which is already rare nowadays. The protocol layer’s design is indeed thoughtful, but I care more about whether this technology can achieve widespread adoption. How is the security of the XSC virtual machine? Has it been audited? What’s the fundraising situation? How is the ecosystem development progressing? That’s what I care about.

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LadderToolGuy

· 01-17 07:01

Finally, someone has explained privacy and compliance thoroughly. The previous projects were indeed all talking in riddles. Focusing on the protocol layer is the right approach; those pretending to use ZK in a superficial way are just joking. This time, Dusk has clarified everything from the source, and I think we can look forward to it. Traditional financial institutions actually lack such a solution, and now there is finally one.

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SmartContractWorker

· 01-17 07:01

Oh, this is the real thinking and problem-solving, not just shouting slogans. --- The design of selective disclosure is excellent; regulators can verify but cannot see all the details. This is exactly what traditional finance truly needs. --- Wait, so does that mean Dusk is actually empowering institutional-level applications directly at the protocol layer, rather than being a compromise solution like Layer 2? --- Honestly, most projects just shout RWA for fundraising, but very few actually solve compliance conflicts at the protocol layer. --- Is it difficult to implement the XSC virtual machine with this hybrid trading model? Will it end up being just a discounted version? --- I can imagine the use case of European private equity funds, but the question is whether the market will actually adopt it... --- Embedding these two interfaces at the protocol layer essentially treats compliance as a first-class citizen. This approach is probably far ahead of most projects. --- Interesting, finally seeing a solution that isn't just a hard overlay of ZK technology. --- Designing it this way from the genesis block shows that the team never intended to make privacy or compliance an "add-on."

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SolidityJester

· 01-17 07:00

Finally seeing someone actually doing something, not just bragging In the past two years, there have been projects everywhere, and everyone just talks about concepts. Dusk's approach, which is designed with privacy and compliance at its core from the beginning, is much more reliable than those solutions that just pile on ZK technology. I understand the part about selective disclosure; regulators can verify but not see the full picture. This is indeed a breakthrough for traditional institutions. Waiting for the day when European funds dare to put this on the blockchain—that would be true validation. For now, let's see if it can actually be implemented. It feels like reality is going to push us back down to earth again.

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BlockchainWorker

· 01-17 06:54

Wow, really? Finally, someone has truly integrated these two sworn enemies' needs. This hybrid trading model has some substance—part public, part private... This is the real institutional-level approach. The previous Layer 2 privacy solutions were indeed just talk, they couldn't pass compliance. I like Dusk's selective disclosure interface; traditional finance relies on this approach—proving innocence without revealing all your cards. I was scared off by those projects shouting RWA before, but this time I actually believe a bit. The current issue is when the ecosystem will take off. Having the best infrastructure is useless without applications. Let me see when we can really use this for supply chain finance.

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