How Dusk Protocol Works (Step by Step)
1. Privacy by Design 🕵️♂️
Dusk uses Zero-Knowledge Proofs (ZKPs).
You can prove something is valid
Without revealing private data
Example:
Prove you’re allowed to trade a token
Without showing your identity, balance, or transaction details
This is very important for institutions and regulated finance.
2. Confidential Smart Contracts
Dusk runs privacy-focused smart contracts:
Transaction amounts → hidden
Sender & receiver → hidden
Business logic → still verifiable
So the blockchain stays trustless, but sensitive data stays private.
3. Proof of Stake Consensus (SBA) ⚙️
Dusk uses a custom Proof of Stake system called SBA (Segregated Byzantine Agreement).
How it works:
Validators stake DUSK tokens
They propose and validate blocks
Honest validators earn rewards
Bad behavior → stake penalties (slashing)
Benefits:
Fast finality
Energy-efficient
Secure against attacks
4. Compliance-Friendly Privacy 🏦
This is Dusk’s special twist.
Users stay private on-chain
Regulators can still verify compliance off-chain
Supports KYC/AML rules without exposing data
This makes Dusk ideal for:
Security tokens
Regulated DeFi
Institutional finance
5. Tokenized Assets & Securities 📊
Dusk is built specifically for:
Tokenized stocks
Bonds
Real-world assets (RWA)
Companies can issue assets on Dusk where:
Ownership is private
Transfers follow legal rules automatically
6. DUSK Token Role 💎
The DUSK token is used for:
Staking (network security)
Paying transaction fees
Validator rewards
Governance (future upgrades
