How Dusk Reshapes the Financial Blockchain Network
At a licensed securities exchange in the Netherlands, a securities transaction worth several million euros is being executed on-chain, with transaction details completely hidden from the public, but regulators can verify its legality in real-time — this is no longer a scenario of the future, but a daily occurrence already realized by the Dusk network.
The modular architecture of the Dusk network fundamentally addresses this challenge: by separating the settlement layer from the execution layer, Dusk provides developers with flexible choices. Its core settlement layer, DuskDS, is responsible for achieving consensus, ensuring data availability, and finality, while DuskEVM offers a fully compatible execution environment with the Ethereum Virtual Machine.
In this architecture, privacy is not an additional feature but a foundational design at the protocol level.
01 Architectural Foundation: Layered Modular Design
The technical architecture of the Dusk network employs a clear layered and modular design, breaking down complex financial requirements into manageable components. This design allows the network to flexibly adapt to different regulatory requirements and application scenarios while maintaining core security and privacy.
The foundation of the network is DuskDS, which is responsible for consensus, data availability, and the protocol-level transaction model. Running on top is DuskEVM, a fully Ethereum Virtual Machine-compatible execution environment that enables developers to build applications using familiar Solidity language and tools.
Within DuskDS, a dual transaction model operates in parallel: Moonlight handles fully transparent public transactions, while Phoenix protects transaction privacy through zero-knowledge proofs, concealing transaction amounts and participant information.
These technological components do not exist in isolation but collaborate through carefully designed interfaces to form a holistic system that protects privacy while maintaining auditability.
02 Technical Core: The Combination of Zero-Knowledge Proofs and Homomorphic Encryption
The technical core of the Dusk network lies in its advanced cryptographic applications. By combining zero-knowledge proofs with homomorphic encryption, Dusk has created a unique system that protects transaction privacy while maintaining necessary transparency.
The homomorphic encryption vault keeps balances and transaction amounts confidential from the public while allowing authorized auditors to decrypt transaction information when necessary. This design ensures a balance between user financial privacy and regulatory compliance.
The PLONK proof system used in the network enables efficient and private transaction verification. Compared to traditional privacy protection methods, the proofs generated by PLONK are smaller and verify faster, laying the foundation for high-performance financial applications.
At the network layer, Dusk uses the Kadcast protocol instead of the traditional Gossip protocol, guiding message flows through a structured overlay network that significantly reduces bandwidth usage and latency while improving network resilience.
03 Compliance Innovation: Selective Disclosure and Regulatory Nodes
In the financial blockchain field, compliance is often one of the biggest challenges. The Dusk network makes compliance a core advantage rather than a limiting factor through a series of innovative designs.
The built-in selective disclosure mechanism allows users to reveal specific transaction information to regulators or auditors when necessary without exposing all financial data. This design both protects user privacy and meets regulatory requirements.
The Citadel protocol provides a self-sovereign identity solution that allows users to anonymously prove they meet certain requirements (such as age or residence) without revealing exact information. This is crucial for identity verification in regulated financial markets.
Through the design of regulatory nodes, regulators can access on-chain data directly without relying on third-party intermediaries. This direct regulatory access enhances the transparency and credibility of the system, paving the way for institutional adoption.
04 Practical Applications: Breakthroughs from EURQ to NPEX
The value of theoretical innovation can only be realized through practical application. The Dusk network has achieved breakthrough applications in several key financial scenarios, demonstrating the practicality and reliability of its technology.
In early 2025, three Dutch organizations—Quantoz Payments, NPEX, and Dusk—collaborated to launch EURQ, a regulated euro-backed electronic currency token. This marks the first time a licensed securities exchange has used electronic currency tokens through blockchain, paving the way for traditional finance to go on-chain at scale.
As a securities exchange holding a multilateral trading facility license issued by the Dutch Authority for the Financial Markets, NPEX is leveraging the Dusk blockchain to issue and trade regulated securities. This collaboration demonstrates how blockchain technology can seamlessly integrate into existing financial infrastructure while meeting stringent regulatory requirements.
The Zedger/Hedger protocol on Dusk is specifically designed for securities lifecycle management, supporting digital representations, local issuance, and trading of various securities such as stocks, bonds, and ETFs. These protocols offer compliance settlement, dividend distribution, and voting functions while maintaining transaction privacy.
05 Developer Ecosystem: Seamless Transition and Privacy Enhancement
The long-term success of any blockchain network depends on the health of its developer ecosystem. The Dusk network actively nurtures its developer community by lowering development barriers and providing robust privacy tools.
Developers can deploy smart contracts on DuskEVM using familiar Solidity or Vyper languages and utilize standard Ethereum development tools such as Hardhat or Foundry. This compatibility significantly reduces the learning curve and migration costs for developers.
Through pre-compiled contracts, DuskEVM provides access to zero-knowledge proof operations, enabling developers to integrate privacy protection logic into their applications. This opens up possibilities for building financial applications that are both user-friendly and privacy-preserving.
Dusk's modular architecture allows developers to customize solutions based on specific needs. Whether fully private transactions are needed or operations requiring public transparency, appropriate module combinations can be selected to achieve these goals.#dusk $DUSK @Dusk 
