My initial response when I began reading about @Dusk Network was that zero knowledge proofs (ZKPs) could hardly be made to scale to a way of doing even basic finance, and not be absurdly slow and complex. The more I examined how they do things, the more I realized the sense of pragmatism and reason. Dusk applies ZKPs to verify that a transaction or smart contract is valid and compliant without disclosing any personal information 0sums, identities, and business strategy. This is what makes up their privacy design.
Dusk ZKPs will enable you to demonstrate to regulators that all is well by the book without exposing sensitive information to competitors and the general population. They use ZKPs along with homomorphic encryption to allow complex calculations to be privately performed by confidential smart contracts. The development of Hedger (in Alpha) allows this to be applied to EVM transactions, i.e. developers can create familiar applications that remain hidden and auditable simultaneously.
In practice of financial applications in the real world, this is very different. Use tokenized bonds or private equity: ZKPs do not reveal the name of the investor or terms and conditions but can demonstrate that KYC checks were completed, limits were not exceeded, and reporting was done. This is very much in line with such regulations as MiCA in Europe, where one has to ensure transparency so that the compliance is achieved, but it is damaging to the business to disclose everything.
One of the problems that institutions are always faced with is the protection of competitive information. ZKPs based on dusk provide such solutions by achieving cryptographic, non-leaky assurance. Regulators have evidence; none have evidence. Not a nice theory, it is privacy that is that which passes the actual audit and legal check.
The latest updates make ZKPs even more applicable. In early 2025, Mainnet was launched using Proof-of-Blind-Bid consensus in which ZKPs continue to stake anonymously and without vulnerability so that no-one can strike big stakers without difficulty. DuskEVM will be live on mainnet in the second week of January 2026, enabling developers to write with standard Solidity code and receive the privacy of Dusk using the ZKP and the settlement of Layer-1.
These ZKPs are played in partnerships. Licensed Dutch exchange NPEX has real assets of more than EUR300 million tokenized on Dusk. Chainlink DataLink and Chainlink CCIP utilize ZKPs to ensure the transfer of tokenized RWAs safely between chains and introduce verifiable market data. DuskTrade (launching in phases in 2026, currently waitlisted) will be based on the same ZKP foundation to conduct compliant securities trading.
Thinking of the larger picture, the ZKP application of Dusk seems a missing link. It allows finance to go on-chain without any coercion between privacy and legality. It is gradual, viable development that may result in an increased institutional involvement.
What do you believe might ZKPs such as these become normalised in regulated DeFi within the next two years?
Have you attempted to look at Hedger or the NPEX tokenized assets?
