The blockchain industry has an old problem: privacy protection and regulatory compliance are often seen as opposites. But some projects are breaking this perception.

Dusk Network is trying an interesting approach—it’s not a traditional public ledger, but a Layer-1 infrastructure built for institutions and developers. What’s the core selling point? It can protect sensitive data privacy while meeting regulatory requirements. It sounds a bit contradictory, but there are indeed technical solutions.

The underlying method is Zero-Knowledge Proofs (ZKP). Simply put: you can prove that a transaction is legitimate without revealing all the details. For example, a transfer can hide the amount and recipient, but when regulators need it, authorized parties can provide a complete audit proof. This is very attractive to financial institutions—they don’t have to worry about competitors seeing business details, and they can still comply with KYC/AML regulations.

The project also incorporates support for Real World Assets (RWA), aiming to enable traditional finance issuance, trading, and clearing processes directly on-chain without modifying existing regulatory frameworks. It uses a modular architecture, which reportedly reduces execution costs while increasing transparency.

The logic behind this design is: privacy protection is not about evading regulation, but about making compliance easier. Financial institutions don’t want to casually expose internal data, but if they can obtain compliance proofs under confidentiality, they are more willing to go on-chain.