Dusk Network implements two different models for transaction, named Moonlight and Phoenix, in order to accomplish transparency and privacy in a regulated financial environment. Moonlight has an account-based model, similar to the Ethereum model, in which every single transaction is publicly verifiable to ensure transparency in audit and regulation procedures. On the other hand, the Phoenix model uses an UTXO model augmented with zero-knowledge proofs, in which all the transactions can be made completely anonymous.
This two-tier architecture enables the choice of the degree of privacy per use case: transparent settlements for reporting purposes and private transactions for the most critical deal-making activities. Phoenix's use of stealth addresses, note commitments, and nullifiers enables the obscurity of transactions with protection against double-spends, all of which are proven via succinct proofs of ZK. On the other hand, the use of Moonlight enables familiarity and inter-operability with the EvM-based infrastructure.
Through bringing together both aspects, Dusk makes a malleable and informed blockchain that does not require an individual to choose between transparency and privacy. This is an essential element in integrating it within TradFi.
