The more I read about this, the more it feels like a response to how finance actually works, not how we wish it worked
Decentralized finance is growing rapidly, but most DeFi was built for open experimentation instead of regulations. Complete transparency in testing ideas is a concern when it comes to dealing with real-world assets, institutions, and legal obligations. Dusk Network has taken a different approach to this dilemma by designing DeFi around regulations from the beginning.
Dusk network focuses on privacy that can be controlled; not eliminated. The network allows for selective Disclosure, rather than exposing all transaction details. This allows users/institutions to keep sensitive information/private while proving that the transaction has occurred and valid. Regulators/auditors can verify activity as needed, while by default the network does NOT make ALL data public.
This balance is very relevant in order for institutions to utilize DeFi for realistic financial operations. Institutions cannot operate on public systems where their strategies, balances, and counterparties can be seen by ALL. However, compliance cannot be overlooked; Dusk bridges this gap by providing transparency at the protocol level and confidentiality at the transaction level.
Trust is also a critical component; on Dusk network the rules are enforced on-chain, eliminating manual processes and third parties, which will make regulated DeFi more efficient and trustworthy. Therefore, the assets settle based on clear guarantees while remaining compliant with the LEGAL boundaries.
Dusk is able to utilize regulation, rather than trying to fit the regulation into DeFi afterwards. By taking this route, Dusk has created an ideal environment for compliant tokenised securities, compliance trading, and institutional involvement. As the DeFi industry continues to grow and evolve, the systems that can support existing financial structures will be the most important.Regulation-ready DeFi does not prevent innovation from occurring. Rather it creates a path for the use of decentralised systems in the real world. The design of Dusk demonstrates that compliance, privacy, and transparency can work together on-chain, if designed appropriately from the start.
