If blockchain wants to be accepted by mainstream finance, it must face a real-world problem: on one hand, it needs to meet regulatory transparency requirements, and on the other hand, it must protect user privacy. These two demands seem incompatible, but DUSK Network, founded in 2018, has taken them as its main focus—to build an infrastructure that ensures privacy protection while complying with regulations.

**Ingenious Architecture Design**

DUSK employs a modular approach. The bottom layer is DUSK Layer 1, responsible for high-performance consensus and settlement. The next layer is DuskEVM, which handles the specific logic of applications. The interesting aspect of this design is that DuskEVM is fully compatible with the Ethereum Virtual Machine. In other words, developers who have written smart contracts in Solidity can almost effortlessly deploy their projects on DUSK and also utilize the unique features of the underlying layer. This approach of compatibility with differentiation truly lowers the barrier to entry for developers.

**Technical Core of Privacy Protection**

DUSK’s core competitive advantage comes from the Hedger module. It combines two cryptographic technologies—zero-knowledge proofs and homomorphic encryption—to enable private transactions within the EVM environment. What does this mean? The specific details of transactions are invisible to ordinary users, but audit agencies or regulatory bodies with specific keys can verify whether transactions are legitimate and compliant with AML and other financial regulations. Privacy and auditability are thus balanced rather than opposed.