When it comes to privacy and compliance—two seemingly contradictory requirements—the Dutch team had already charted a path back in 2018. Dusk, this Layer1 public chain, is focused on enabling traditional financial assets to be securely on-chain—without exposing sensitive information or violating regulatory rules.

Compared to common public chains (like Ethereum), where all transaction information is exposed to the sunlight, this approach is unsuitable for handling sensitive assets like equity and bonds. Dusk’s solution is: encrypt transaction content for protection, but without relaxing compliance bottom lines; regulatory authorities can still audit as needed. Simply put, it allows institutions and enterprises to enjoy the transparency and efficiency of blockchain without worrying about leaking business secrets.

How is this achieved technically? Zero-Knowledge Proofs (ZKP) are at the core. You don’t need to reveal identities or account balances to prove that you “meet the requirements”—for example, proving you are a qualified investor without disclosing your actual assets. It sounds magical, but it’s really the power of mathematics.

Even more impressive are confidential smart contracts. These come with built-in privacy protection and can embed regulatory rules, transforming manual KYC/AML reviews into automated processes. According to Dusk’s data, the time to issue securities can be reduced from 3 to 6 months down to just 4 weeks, with costs cut by 70%. If this becomes widespread, it would truly liberate financing for small and medium-sized enterprises.

On the consensus mechanism, Dusk uses SBA, a system they designed themselves, which ensures decentralization while maintaining transaction speed—suitable for financial-grade applications. To ensure on-chain data aligns with the real world, they also collaborate with Chainlink oracles. Identity information is encrypted using the Shelter module, so regulators can only see the necessary parts.

The application scenario is very clear: asset tokenization. SMEs can put equity, bonds, and other assets on-chain, directly lowering various financing barriers. The participation process for investors is also simplified, enhancing overall market liquidity. This is what the RWA track is all about—making real-world assets circulate more efficiently.