I've been thinking about a question lately—why are traditional financial institutions so cautious about blockchain? On the surface, it's a technical issue, but fundamentally, it's a deadlock between privacy and compliance.

Blockchain demands transparency, while financial institutions require privacy. These two seemingly opposing needs are both essential. Interestingly, the Layer 1 project Dusk, founded in 2018, is trying a different approach—not opting for complete anonymity, but rather "compliant privacy."

The pain points of bringing traditional finance onto the chain are clear. Wall Street, exchanges, and asset management firms want blockchain's speed and programmability, but they can't bypass regulatory bottom lines like KYC and AML. What they need is a new way: privacy and regulation can coexist.

Dusk's solution is called Hedger, which combines zero-knowledge proofs and homomorphic encryption. Simply put, transaction contents are encrypted, but if regulators or auditors need to verify compliance, they can do so with authorization, while other users' privacy remains fully protected. This selective disclosure design logic is completely different from Monero and Zcash's "full privacy" approach.

The value of $DUSK is actually tied to this logic—bringing real-world assets (RWA) onto the chain is a trend, and if Dusk can truly solve the "compliant privacy" bottleneck, its potential is significant.