The RWA track is expanding rapidly, but an old problem has been troubling institutional investors—how exactly should asset custody be handled?

Traditional methods rely on centralized institutions for endorsement, which sounds secure but actually has many pitfalls: single points of failure, data leaks, operational risks—all potential hazards that could cause a crisis at any time. Pure self-custody isn't a solution either—lacking compliance audit mechanisms, financial institutions simply can't pass regulatory inspections. This dilemma has finally been broken.

The zero-trust custody solution jointly launched by Dusk Network and Cordial has been successfully implemented on the NPEX platform, already safeguarding over €200 million in regulated security tokenized assets. The key strength of this solution lies in a core principle: "Never trust, always verify." It sounds like a classic blockchain mantra, but this time, it's truly applied correctly.

How does it work? The entire scheme is built on cryptographic technology and smart contracts, completely independent of any centralized institution’s credit endorsement. In practical terms, the solution encrypts all custody assets throughout the process using Confidential Secure Contracts (XSC), and only authorized users can unlock assets via zero-knowledge proof technology. This way, even if hackers breach the system, they can't directly access the assets; internal personnel attempting improper operations will be automatically stopped by the smart contract—double insurance.

But that's not all. The scheme also integrates the Phoenix 2.0 hybrid privacy model, creating a dedicated verification channel for regulators and auditors. What does this mean? Users' privacy is protected, while regulatory and audit work remains unaffected. A triple-layer safeguard—technological security, compliance auditing, and privacy protection—has been established.

In the RWA sector, asset custody has always been the top concern for institutional users. This zero-trust custody solution sets a new industry standard, demonstrating that with advanced cryptographic technology and meticulous architecture design, it is indeed possible to meet the triad of security, compliance, and privacy simultaneously.