Recently, I’ve been chatting with a few veteran players, and it’s obvious that the focus of the community’s discussions is shifting. It’s no longer all about “where’s the next hundredfold opportunity,” but rather: how can large institutions feel confident to enter the market? This isn’t casual talk; regulatory agencies are paying close attention.

I’ve noticed that what Dusk is doing is quite interesting. It doesn’t pile on concepts but is instead building a truly usable “on-chain channel” for compliant funds.

**What is the core dilemma for institutions?**

Simply put, they’re hesitant to participate. Suppose you’re managing hundreds of millions of dollars, and you find that DeFi can offer decent returns—would you just jump right in? Probably not. The reason is straightforward—on-chain transactions are fully transparent, and every operation you make is exposed to everyone, like revealing your hand. Plus, the traditional financial audit standards don’t fit here, and legal and risk control departments simply can’t pass the scrutiny. What’s missing is the “safety barriers” that institutions are used to.

**Dusk’s approach is actually very practical.**

The first step is to establish a privacy defense line. Sensitive data such as counterparties, transaction prices, and volumes are kept confidential from external participants. Large institutional trades are no longer leaked in advance, solving the “privacy dilemma.”

But that’s not enough—pure black-box trading would definitely face regulatory opposition. The real key is the next step—adding a special “review portal” on this privacy wall. When compliance audits or regulatory bodies need it, participants can generate proof materials using zero-knowledge proof technology, which both protects privacy and meets transparency requirements for regulation.

This “invisible but verifiable” solution is exactly what institutions truly need.