Looking at the current state of this industry is quite interesting——Traditional finance requires everything to be on the table, subject to audits, nothing can be hidden; on the other hand, blockchain aims for complete anonymity, where nothing is visible to others. Putting these two logics together, institutional investors are caught in the middle, wanting to enjoy the benefits of innovation but also fearing regulatory crackdowns.

Dusk’s approach is actually quite clever; they aim to solve this deadlock—how to make privacy and compliance coexist.

In fact, privacy is not about hiding everything, but about learning to choose. Traditional privacy coins, for example, make transaction information a black box for everyone, which indeed prevents outsiders from seeing details, but regulators can’t perform KYC and AML checks, so this approach simply doesn’t pass muster. Dusk uses zero-knowledge proofs, which are different; the core logic is: I can prove I meet your requirements without revealing who I am or my specific details.

For example, a user might want to prove they have $1 million in compliant assets without revealing the exact composition of that money; or an individual investor wants to access a DeFi protocol, just needing to prove they are in an allowed region, without revealing all their identity information. The benefit of this approach is a win-win—user privacy is protected, and regulators can still perform the necessary checks.

Ultimately, trust is the foundation of finance. Compliance isn’t meant to be a bottleneck, but to ensure all parties can operate with confidence. Dusk’s design philosophy is to embed regulatory requirements from the very beginning, rather than patching them on later. This bottom-up approach to considering compliance may actually be more sustainable than the convoluted methods used before.