I recently came across an interesting project proposal. They are doing something that seems a bit contradictory—the implementation of a transaction method on-chain that both protects transaction privacy and allows regulatory authorities to conduct compliant audits.

The core idea uses zero-knowledge proofs combined with homomorphic encryption technology. When these two are integrated, it can achieve the effect of "transaction counterparts are invisible, but tax authorities can still verify" on the EVM. It sounds like copying the compliance logic of traditional finance, just moved onto the blockchain.

What's even more interesting is that this is not just theoretical. Their testnet is already up and running, and the alpha phase test network is operational. If they can successfully implement this solution, it will send a strong signal to institutional capital—because compliance issues have always been the key obstacle to institutional entry. At that point, the gates for institutions might really just crack open a little.