Blockchain technology has brought new opportunities for decentralization and security in various industries, especially in financial markets. However, one of the critical
issues is how to balance transparency and privacy, especially when dealing with sensitive financial information .
Dusk aims to solve this challenge by introducing a blockchain protocol specifically designed for regulated financial markets, providing privacy, compliance, and scalability to meet the needs of traditional financial institutions.
Dusk focuses on improving privacy in the execution of financial transactions without sacrificing regulatory compliance. Many current public blockchain platforms, such as Ethereum and Bitcoin, struggle with privacy, transaction finality, and efficiency when applied to traditional finance . Despite their capabilities in supporting decentralized applications and financial transactions, they often face difficulties in handling private transaction details while also meeting the regulatory requirements necessary for financial institutions.
Several blockchain protocols have made significant advances in privacy, including Zcash and Monero. These platforms use advanced cryptographic techniques, such as zk-SNARKs and ring signatures, to obscure transaction details, including sender, receiver, and transaction amounts . While these platforms are groundbreaking for personal privacy, they lack necessary features for integration with traditional finance, such as clear regulatory frameworks, auditability, and smart contract capabilities with confidential transactions. Dusk aims to integrate these features, making it suitable for regulated financial markets.
One of Dusk’s contributions is its succinct attestation protocol, a new consensus mechanism that guarantees transaction finality within seconds. The consensus model is designed to meet the high-throughput and low-latency requirements of the financial sector, with mechanisms to ensure the scalability of the network while maintaining decentralization. As the underlying communication layer, Dusk uses the Kadcast protocol, whose efficient and secure message propagation ensures that information is disseminated across the network quickly and reliably.
Additionally, Dusk makes use of two transaction models, Moonlight and Phoenix.
While Moonlight is a transparent, account-based model, Phoenix is a UTXO-based model that supports both transparent and obfuscated transactions. The combination of these two models makes Dusk highly suitable for financial transactions that require privacy without sacrificing compliance, as regulators can access necessary data while still ensuring confidentiality for the general public.
Dusk also integrates the Zedger protocol, which is designed to support confidential smart contracts tailored for financial applications. Zedger focuses on security token offerings and financial instruments, ensuring regulatory compliance while enabling the execution of private transactions and contracts.
This way, Dusk aims to provide a blockchain infrastructure that aligns with traditional finance’s legal and regulatory requirements.
