2026-01-18 21:24:39

By 2026, the biggest bottleneck for institutional capital entering the blockchain market is no longer technical performance. The issue has shifted to a dilemma: traditional EVM chains are fully transparent, exposing sensitive business information on-chain; meanwhile, privacy-focused public chains cannot be audited and are blocked by regulators. It's like being caught between transparency and black boxes—no one is happy.

Dusk offers an interesting approach. Their Hedger protocol, built on fully EVM-compatible infrastructure, introduces a mechanism of "privacy by default, audit optional"—sounds contradictory, but in fact it addresses the capabilities that institutional-grade DeFi and RWA platforms have been waiting for.

How does it work? Hedger combines zero-knowledge proofs and isomorphic encryption technology. Transaction amounts, addresses, and contract states are encrypted by default, and only the involved parties can see the details. The key here is that it has a built-in regulator-friendly design: when needed, auditors or regulators can use a dedicated view key to selectively decrypt specific transactions or account information. This "selective disclosure" fully complies with MiCA and SEC reporting requirements, allowing institutions to conduct real on-chain business without worrying about data leaks or regulatory penalties.

After DuskEVM mainnet launches in the second week of January, Hedger has been natively integrated into the execution layer. Developers can deploy privacy-enabled smart contracts without modifying Solidity code. Compliance lending protocols, tokenized bond issuance, private equity trading platforms—all these applications have default privacy protections for all interactions, while also supporting KYC/AML audit channels. This effectively solves the last hurdle for institutions to go on-chain.

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SchroedingerAirdrop

· 01-21 08:50

Now this is interesting—privacy and auditability at the same time? Sounds pretty unlikely, but it’s definitely what those institutional folks have been waiting for.

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GasFeeTears

· 01-18 21:43

This might really change the game now, the combination of privacy + auditing has been awaited for a long time... The selective disclosure system feels like it finally allows large institutions to operate without worries, no longer needing to choose between transparency and hiding information... Dusk's move is really aggressive, integrating zero-knowledge proofs beautifully. Launching in just one month and directly entering the execution layer, developers don't even need to modify Solidity? That's impressive... But will the regulatory keys become a new centralization issue... I always feel that the MiCA standards are still a mystery when it comes to actual implementation... RWA finally has a truly usable infrastructure, although I still want to see how the actual lending protocols perform...

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LiquidationSurvivor

· 01-18 21:43

This is the true problem-solving approach. Privacy and auditing are not mutually exclusive; it all depends on the design. --- Selective decryption is a brilliant move. Finally, someone has grasped the pain points of institutions. --- Adding privacy without changing the code? If this really becomes practical and easy to implement, institutions truly have no reason to delay anymore. --- Zero-knowledge proofs combined with homomorphic encryption sound impressive, but the logic of "privacy with optional auditing" is indeed self-consistent. --- I'm just worried it might be another paper plan; once it goes live and is used, it could be a different story. --- Can MiCA and SEC really accept this "selective disclosure" approach? It still seems to require observation. --- Privacy chains used to be either black boxes or non-compliant; this time, a middle ground has finally been found. --- The real bottleneck of RWA is exactly this: transparency risks leaks, opacity risks violations. Hedger's approach indeed addresses this pain point. --- Mainnet has already integrated Hedger, and it looks like this is not just a PPT plan. --- Lending protocols, bonds, private equity—all can run. If this ecosystem can be developed, it would be truly disruptive.

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BrokenRugs

· 01-18 21:41

This is the real solution, finally finding the balance between privacy and auditing. The selective disclosure trick is clever; regulation is no longer an adversary. To be honest, Hedger's design is a bit too clever. Why would institutions still bother with this? Zero-knowledge proofs + homomorphic encryption sound powerful, but can they really run stably... Finally, someone has reconciled the pair of regulators and privacy, institutions should be happy. DuskEVM is like opening a VIP channel for institutions. No, why wait until 2026? It should be launched now. This might save RWA, truly enabling on-chain activity. All interactions default to privacy? Sounds great, but could the audit key still be a risk point? Skeptical, let's wait until DuskEVM is truly operational.

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GasGrillMaster

· 01-18 21:29

Sounds good, but can this "selective decryption" really prevent regulatory backstabbing? I just feel like it's just kicking the problem down the road...

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