Thus, consider you are working on the finance on a blockchain: computerized trades, verifying whether someone can invest, transferring assets between each other, all that code. The issue with most blockchains (such as Ethereum) is that all is out in the open. Anybody can have a look at the details who is trading what, how much, what are the rules within the contract. That is ok with certain things, but in actual finance, no. No way. You do not want people to look over your shoulder and see what is happening in your strategy, or sensitive numbers come out and inundate the entire world.
It is where @Dusk Network fits in. Basically they are the first blockchain to be constructed with ground up and confidential smart contracts privacy is not an add on feature, it is a core feature.
Their zero knowledge proofs (actually, more specifically, something called PLONK, which is extremely efficient) allow the contract to execute its code and show that it is "yeah everything is alright, conditions were satisfied, limits were not exceeded, etc" but not to indicate what the numbers or details are. You do not have to pour sensitive details into the ocean to demonstrate that you are abiding by the rules of regulators or auditors. It is the selective disclosure: reveal what you have to reveal, conceal the rest.
They also possess this so called Confidential Security Contract (or XSC) standard, which was tailored to the needs of tokenized securities, such as digital stocks, bonds, real world assets. You can write the coolest programs with XSC, which include automatic dividends, voting rights, corporate actions, all automatically on chain. And it eliminates middlemen such as custodians, such that the shareholders literally own their stuff themselves. Even trades may be negotiated privately (under the name of Smart Bulletin Boards) and afterwards settled safely no one knows about the back and for of a negotiation process until its completion.
Two ways of transacting with the dusk, one is Phoenix (full privacy, shielded, hidden balances, etc.) and the other one is Moonlight (public transactions when secrecy is not needed). Choose your own style, super flexible.
They use this VM (Rusk, currently being redesigned to run on Piecrust, in order to be fast enough) under the hood, which is specifically designed to execute these zero knowledge proofs, making it in fact useful when running confidential applications.
And the token $DUSK , is applied to stake to have everything secured, to pay gas (paying it particularly in case of the private operations) and governance so the incentives coincide.
The thing that struck me in particular is how this is applicable in the real world. The traditional finance system is such that full transparency would kill a deal due to leakage or competition. Too secretive and you will get your affairs into trouble with the regulators. Dusk strikes that honey hole of privacy, where it counts, evidence and conformity where it must be evidence and conformity. It is as though blockchain has finally come to reason like real finance experts.
Therefore, that is why I believe that confidential smart contracts can be a big disrupter of tokenized securities and even DeFi segments, so that they can be used with large players without all the exposure risks.
Thanks to the team of the @undefined foundation, which is driving this privacy first movement.
