Did you know that Dusk's Hedger protocol allows institutions to execute private transactions on EVM-compatible chains while still enabling regulators to verify compliance without revealing sensitive data?
In Dusk's setup, Hedger leverages zero-knowledge proofs to generate verifiable assertions about transaction validity and homomorphic encryption to perform computations on encrypted data, ensuring that only selected details are disclosed during audits on the Dusk network.
This matters because Dusk bridges the gap between blockchain privacy and regulatory demands, enabling financial institutions to adopt DeFi tools without risking non-compliance penalties or data leaks in environments like tokenized securities trading.
DUSK tokens are essential here as they power the network's security through staking, pay for transaction fees that include privacy computations, and incentivize validators to maintain the integrity of Hedger's encrypted operations on Dusk.
For instance, a bank using Dusk could transfer tokenized assets privately to a client via Hedger, selectively disclosing only the transaction amount and parties to auditors while keeping trade strategies confidential.
However, implementing Hedger on Dusk involves trade-offs like increased computational overhead for zero-knowledge proofs, which may raise gas costs and require optimized smart contract designs to balance speed with privacy.
