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The debate on blockchain privacy is clouded in a typical case of a critical misunderstanding, namely the confusion between privacy and anonymity. In regulated markets, this is a big difference. Anonymity wants to hide identities, so this can create a flag with regard to regulations. The goal of privacy, on the other hand, is the selective protection of personal information while preserving identity and accountability. It’s this fine line that @dusk_foundation walks, and the solution for this problem relies on a cryptographic breakthrough: zero-knowledge proofs (ZKPs).
How Dusk Enables Privacy Without Breaking Compliance:
“Anonymous” systems (like privacy coins) are designed to decouple actors and actions completely. This would never be feasible for a regulator—like a bank that couldn’t identify its own account holders. Privacy in the institutional sense is thus understanding who is involved but hiding the context of the interactions—amounts of transactions, the details of contracts, and timing. Dusk is optimized for this model.
The Magic of Zero-Knowledge Proofs:
Zero-knowledge proofing enables one individual (the prover) to prove a claim to another individual (the verifier) without disclosing any new information other than the fact that the claim made by the prover is true.
Simple Analogy:
Visualize a color-blind buddy with two balls in their hands. To convince them that these two balls are of different colors, without actually knowing the colors, follow these steps: Give them the balls, and with their balls hidden behind their backs, they can randomly choose to exchange them or not, and show them back to me. I can accurately answer whether they exchanged them or not, and this will continue until I prove my point without ever mentioning the color of the balls.
In the transaction model of Dusk’s Phoenix, this can be expressed as:
The Prover:
The party using a confidential transaction.
Statement, "My transaction is valid: I own the inputs, I'm not double-spending, the outputs equal inputs plus fees."
The Verifier:
The Dusk blockchain network.
The Proof:
A Zero-Knowledge Proof linked to the transaction.
The Result:
The network checks the proof in milliseconds to verify that it's true and that it's a valid transaction, without ever knowing who was sending or who was receiving or for how much.
Auditability Without Data Leakage:
The Superpower:
That's where Dusk goes beyond just privacy: it's built to be selectively auditable. The network has a way, using its confidential smart contracts protocol called Zedger, of giving a trusted third party-perhaps a regulator or an auditor-some kind of "audit key" or the capability to generate its own particular zero-knowledge proof.
For instance, an auditor can create a proof that attests to the following: "This confidential securities pool is 100% collateralized," or "All transactions in this fund complied with the investment mandate." The auditor receives a cryptographic guarantee of compliance without access to the underlying transaction history, wallet balances, or individual trade details. This addresses the regulatory need for oversight while preserving the confidentiality needed by institutional clients and competitive markets.
Real-World Use Cases: The Confidential Economy

This technology is not theoretical in practice. It provides for tangible applications that were not possible on transparent chains:
Securities & RWAs:
Such stocks, bonds, and/or real estate tokens may be traded without the risk of market manipulation with regards to the ownership structure and volume of the trade being made public.
Private Credit & Syndicated LoansAgreements between multi-lenders and borrower covenants may be modeled on a blockchain where the details of the loan amount and the agreement are private to the involved parties, while proofs are required to verify that all conditions are satisfied.
Institutional Treasury Management:
Essentially, companies as well as funds can carry out their portfolio management and other transaction activities in a way that does not result in the creation of a public map of their financial strategy and liabilities.
Stablecoins and CBDCs That Are Compliant:

Solution:

Issuers will be able to offer real-time Proof of Reserves without needing to display their whole trade ledger or customer base.
The Long-Term Imperative:

Implications for the future are profound. For blockchain to serve as a means of finality in global finance, it must replicate—and improve upon—a level of confidentiality found in the current system. A model from Dusk illustrates that in today’s cryptography, we are no longer faced with an ethical choice between transparency and confidentiality.
It changes the basis for trust from “trust us, the data is in our internal database” to “trust the math, the proof is on the public ledger.” It’s a much stronger, resilient, and ultimately trustworthy way of having financial infrastructure.
#dusk
$DUSK
@Dusk

The original promise of blockchain was transparency—to make a public, immutable record for all to view. For many use cases, this has been a huge breakthrough. However, in the multi-trillion-dollar traditional and institutional world of finance, this transparency is, in fact, the biggest impediment to adoption. The truth is that in finance, confidentiality is not a nicety, but a necessity.
The Fundamental Mismatch: Transparency vs. Operation
Public blockchains such as Ethereum or Solana function according to the principle of indiscriminate disclosure. Each transaction amount and each address of the wallets as well as all contract interactions are public. Although the blockchains are transparent in this way and ensure a high degree of accountability within the networks, this is absolutely incompatible with finance as the transaction amounts and addresses are publicly.
Strategic Front Running:
A portfolio rebalancing by a fund and a large trade by a bank's OTC desk would be transparent in a real-time environment, and this practice of front running by rivals and bots would chip away at its value.
Breach of Confidentiality of Clients:
This is yet another duty of financial institutions. They are expected to handle client information, specifically financial data, in a confidential way. By having an open ledger, their entire financial dealings will be revealed, violating GDPR, among other laws.
Intellectual Properties within Smart Contracts:
The business logic contained within a complex financial smart contract—a novel derivatives pricing algorithm or a credit scoring system—must have its code base entirely open source, enabling it to be immediately cloned and undermining any potential advantage.
Market Stability Risks:
The publicly observable nature of large distressed trades might result in risky predatory actions despite the requirements of a stable financial system.
Finance works on the model of “need to know” transparency as opposed to broadcasting. This is why the sector makes use of private databases, secure messaging systems (like the SWIFT system), and secret bilateral agreements.
The Compliance Paradox “But regulators require transparency!” is often the tart reply to this. This is a deeply misconstrued point. What regulators require is auditability and access to supervision, not transparency. What they want is the ability to investigate, to prove solvency, and to verify compliance. Even if there is complete transparency of public blockchains, they do not gain any advantage over any other civilian; they merely lose their right to perform targeted and undercover inquiry in order to prevent any panic in the markets.
"The real need is for a principle of selective revelation. A system requires a way to cryptographically verify that it conforms with regulatory requirements without making underlying sensitive information available to the public at large. That is a chasm that cannot be spanned by the base layer of a transparent blockchain."
"Enter Dusk: A Native Solution, Not a Patch" This is where @Dusk radically differs. Rather than constructing a system in which privacy is an afterthought to be retrofitted in with tenuous “layer-2” solutions, or accomplishing it in no way and leaving it to others to figure out how to add it on later as an afterthought after realizing that non-private systems will have no security to preserve anyway, Dusk Foundation’s design of its blockchain, as described in its whitepaper, includes privacy.
The Dual-Transaction Engine: Dusk derives two engines:
Moonlight and Phoenix, each serving a distinct purpose, one with a focus on transparent and account-based transactions and the other, an UTXO-based private transaction engine called Phoenix. In the case of Phoenix, the transactions are made confidential through the utilization of Zero-Knowledge Proofs (ZKPs). These transactions are checked for their authenticity, validating the lack of a double spend and adherence to rules on the network, without knowing the transaction details, including the parties and amount, involved in the transaction.
Zedger:
The Protocol for Compliant Confidentiality: This is the genius part. Zedger refers to a smart contracts framework used specifically for financial instruments, namely securities and RWAs. This allows all contractual language, ownership, as well as all transactions, to stay under lockdown. More critically, it incorporates oracle functions regarding regulatory compliance. The certified auditor or regulator may be provided the capability to create a zero-knowledge proof related, say, "all investors are accredited" or "capital reserve requirement satisfied" without having access to the actual underlying data, which directly honors the desired requirement of the regulators.
The infrastructure is backstopped by Succinct Attestation, a proof-of-stake consensus that provides transaction finality in seconds, and Kadcast, an efficient peer-to-peer network that reduces bandwidth usage and stale blocks. It's not just about privacy; it's building out a stack that will meet the performance and predictability requirements of global markets.
#dusk
$DUSK

Dusk Network implementa due modelli diversi per le transazioni, denominati Moonlight e Phoenix, al fine di raggiungere trasparenza e privacy in un ambiente finanziario regolamentato. Moonlight ha un modello basato su account, simile al modello Ethereum, in cui ogni singola transazione è verificabile pubblicamente per garantire trasparenza nei procedimenti di audit e regolamentazione. D'altra parte, il modello Phoenix utilizza un modello UTXO arricchito con proof zero-knowledge, in cui tutte le transazioni possono essere effettuate completamente anonime.

L'algoritmo di consenso Succinct Attestation (SA) di Dusk è senza permessi e basato su comitato, Proof of Stake, ottimizzato per un alto throughput e una finalità rapida, necessarie in applicazioni finanziarie. A differenza del Proof of Work tradizionale, SA elimina l'estrazione energetica, riducendo i costi ambientali di oltre il 99% rispetto a sistemi come Bitcoin.
Cicli di completamento SA e iterazioni con la selezione di provisoners (staker) per la proposta e la validazione dei blocchi tramite Sortition Deterministico. Ogni ciclo comprende fasi di proposta, validazione e ratifica che garantiscono il consenso in pochi secondi. Il processo di proposta include inoltre la finalità rollante, che assicura che iterazioni e calcoli siano minimizzati e la catena sia protetta contro i fork.

Zedger è il processo di emissione e gestione dei token di sicurezza e degli asset reali (RWAs) di Dusk in modo rispettoso della privacy e conforme alle normative. Zedger è stato progettato fin dalle fondamenta per scopi di conformità finanziaria e utilizza proof a conoscenza zero per facilitare transazioni private, ma consentire agli auditor autorizzati di verificare legittimità e proprietà.
Le funzionalità chiave includono la creazione/eliminazione di token, l'esecuzione di azioni aziendali come dividendi e voto, e la gestione di trasferimenti forzati avviati dall'emittente, tutto ciò mantenendo la privacy degli utenti finali. Tutti i processi possono essere tracciati sulla blockchain, conservando le informazioni sensibili, bilanciando così trasparenza e riservatezza.