2026-01-13 12:32:13

Decentralization and privacy protection are core demands of Web3. Why do they always clash with regulation and compliance? Many believe these two are fundamentally incompatible, but Dusk Network offers a different answer——it doesn't fall into the dilemma of either/or. Instead, it paves a more challenging but long-term vision: using cryptographic technology to build a "secret yet transparent" channel between traditional finance and the decentralized world.

**Where is the core issue?**

Traditional public blockchains with fully transparent mechanisms are like glass vaults for enterprises and institutions—business secrets and customer privacy are exposed to the sunlight, which deters many traditional financial institutions from going on-chain. On the other hand, privacy chains take an extreme approach, almost instinctively rejecting regulation, which makes it difficult to support large-scale compliant assets.

**Dusk's solution**

The key lies in its "selective disclosure" technical approach. By leveraging cryptographic tools such as zero-knowledge proofs (ZK-SNARKs) and homomorphic encryption, users can prove that a transaction is legitimate and compliant without revealing transaction details (amounts, counterparties). It’s not all public or all hidden, but precisely controlling who can see what information.

**How are these technical tools used?**

· **Privacy transaction layer**: Mixing protocols and other methods anonymize transaction information, making it impossible for others to trace your transaction links.

· **Compliance pass**: The Citadel protocol allows users to complete compliance identity verification once, so they can perform privacy transactions within the ecosystem without repeated KYC.

· **Auditable privacy**: The Hedger module ensures sensitive data is hidden from ordinary users, but authorized parties (tax authorities, regulators, etc.) can access the information they need.

The brilliance of this combination is that—privacy and compliance are no longer conflicting but can be finely managed as two dimensions.

DUSK21,71%

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MEVHunterNoLoss

· 01-15 22:45

NGL, this idea is indeed brilliant. I have to admit that selective disclosure is a clever move.

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fren.eth

· 01-15 07:19

To be honest, this approach of "being both secretive and transparent" is really clever. Finally, someone is trying to break this deadlock. It's basically an old trick in cryptography—show it to those who want to see, and others see nothing. I think Dusk's approach is on the right track, especially the Citadel protocol, which offers lifetime KYC with just one verification. That's very attractive for institutions. ZK (Zero-Knowledge) technology has been around for a while, but the key is having projects that can actually implement it effectively without underperforming. Still, I want to see how the actual application and deployment turn out; theoretical plans are easy, real-world execution is hard. The conflict between compliance and privacy has always been a divide. Seeing Dusk boldly break through this barrier is a different path. Traditional financial institutions have a big slice of the pie, and it all depends on who can truly get a piece.

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LidoStakeAddict

· 01-13 17:43

Alright, this is the right way. Privacy and compliance can really dance together; Dusk's approach is indeed impressive.

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OnChainArchaeologist

· 01-13 12:58

Hey, finally someone understands this. The ZK approach is indeed a solution. The idea of selective disclosure is well said. You don't have to run completely naked nor fight the regulators to the death. It's quite interesting.

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shadowy_supercoder

· 01-13 12:58

Sounds good, but can it really be implemented? It still seems to depend on practical application.

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rugged_again

· 01-13 12:57

Zero-knowledge proofs are indeed interesting, but can they really be implemented... It still seems to depend on regulatory attitudes.

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PuzzledScholar

· 01-13 12:54

Wait, does the selective disclosure approach really work? I always feel that regulators still want full transparency, and then we'll end up going back and forth.

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DarkPoolWatcher

· 01-13 12:50

Really? Privacy and compliance can coexist harmoniously? I’ve been thinking about it for a while and I’m still a bit confused. It feels like the left hand wants freedom while the right hand needs constraints—how can both be achieved at the same time? I’ve heard of zero-knowledge proofs before, but I didn’t expect Dusk to use it this way. Selective disclosure sounds like opening a VIP channel for regulators. I wonder if it will turn out to be another story once actually implemented. The key question is, will genuine institutions trust this approach? Or will it just repeat the old tricks—great technology but no one uses it? This idea is indeed innovative, but it still depends on how the ecosystem develops later. Otherwise, even the best technology is useless.

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GateUser-44a00d6c

· 01-13 12:48

Oh, this is the right path. Finally, someone has figured it out. My God, selective disclosure is brilliant. Can regulation and privacy truly coexist peacefully? With the set of zero-knowledge proofs, it feels like Web3 has hope. One-time solution with coin mixing + KYC, clever... This way, there's no need to keep fussing around. I used to think that privacy chains and compliance had to be mutually exclusive. I didn't expect such a clever coordination. If this can really be pushed forward, the barrier for traditional institutions to go on-chain will be much lower. Dusk's approach has some substance. It's not purely about fighting regulation but finding a balance. Cryptography handles information so that anyone can see or not see it—this is true privacy. The concept of a compliance passport sounds so comfortable, saving the trouble of repeated KYC. It seems the future of Web3 might lie in this kind of compromise solution.

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