On January 18, 2026, DuskEVM mainnet has been live for over a week. As someone who has been observing privacy public chains and RWA tracks for a long time, I have been pondering—there is a very difficult paradox in the crypto space: privacy and compliance are fundamentally incompatible.

One extreme is completely transparent on-chain, but institutional investors won't really put large sums of money in. The other extreme is total privacy, which can cause regulators to throw up their hands.

Dusk's Hedger mechanism is different. It uses a set of original cryptographic mixing schemes, truly finding a third way—that is, within a standard EVM-compatible framework, to implement privacy-first but auditable, compliance-optional smart contracts and transactions. This is not simply attaching ZK or FHE plugins, but something specifically designed for regulated financial scenarios.

The core technical approach is also quite clear. Hedger employs both homomorphic encryption and zero-knowledge proofs, heavily optimizing the EVM account model.

First, let's talk about homomorphic encryption. Based on ElGamal implemented on elliptic curves, its advantage is—values can be added and multiplied in a fully encrypted state, without even decrypting. In the context of tokenized securities, bonds, and equity transactions, position sizes, transfer amounts, and order intents remain encrypted throughout. Yet, smart contracts can still verify critical logic like "the transferred amount does not exceed the encrypted balance," and "total circulation constraints" can also be maintained.