Here is the answer that why dusk exists or what is the need for dusk to exist?
Dusk possesses two main features that makes us realize the need of dusk.
• Beyond Tokenization
While most projects limit their focus on tokenization, which addresses only the “front-end” of the financial system, Dusk innovates across the entire financial infrastructure, including essential back-end processes like clearance, settlement, and compliance. Dusk provides fast, private, and efficient on-chain settlement that meets institutional standards, delivering a decentralized market infrastructure that removes the need for intermediaries and custodial reliance. Unlike the vast majority of projects, Dusk tackles not only tokenization but also the deeper regulatory and operational challenges necessary for institutional-grade financial markets.
Dusk isn’t just another platform layering tokenization onto outdated systems. It is building an entirely new decentralized financial market infrastructure that allows assets to be natively issued, settled, and cleared on-chain without the need for intermediaries like CSDs. By focusing on both the front-end (tokenization) and the back-end (settlement and compliance), Dusk is paving the way for a truly disintermediated financial market for trading securities.
• Meeting Institutional Standards:
Many other blockchains, including popular solutions like Layer 2s on Ethereum, are not well-suited for settling securities transactions due to their inability to meet the stringent requirements of institutional-grade financial markets.
Some of the challenges are:
✓ Fast Finality: Securities settlement requires transactions to be finalized in under 10 seconds to meet institutional standards. Ethereum Layer 2 solutions, which batch transactions and settle them on Layer 1, usually experience delays of at least several minutes. This disqualifies them from real-time settlement use cases, making them unsuitable for securities transactions where fast finality is crucial.
✓ Compliance and Privacy: Regulatory frameworks like GDPR require privacy-preserving transaction models. Dusk’s protocol is designed to ensure compliance by offering features like selective disclosure and explicit acceptance, which are essential for adhering to legal and regulatory standards throughout the transaction lifecycle. In contrast, networks with account-based models (like EVM-based chains) do not provide the privacy needed for such compliance. This lack of privacy also increases the risk of market manipulation, further complicating their use for regulated assets like securities.
