Privacy public chains are often misunderstood. Many people in the market equate privacy with complete anonymity, but what financial institutions actually need is not that. They truly care about protecting their business secrets within a compliant framework—such as holdings data, transaction volumes, order intentions, and information related to counterparty risk exposure.

In the past six months of iterations, Dusk has increasingly clarified this distinction. Through the Hedger engine, combined with the integration solutions of Chainlink and NPEX, privacy has evolved from a purely theoretical concept into a product module that financial institutions can actually procure. In other words, Dusk's competitiveness is shifting from cryptographic theoretical research toward a product-oriented approach that can be practically adopted by institutions. This transformation means that DUSK, as the ecosystem's fuel token, will enjoy more stable and sustained demand support.

Let's look at the design logic of Hedger. It is not an independent privacy chain nor an external privacy module, but rather the privacy engine built into DuskEVM itself. The key innovation lies in combining homomorphic encryption with zero-knowledge proofs, while also adopting a hybrid scheme of UTXO and account models. This ensures a smooth EVM development experience while meeting regulatory and audit compliance requirements.

Currently, many privacy solutions on the market focus solely on zero-knowledge proofs. However, when developing financial applications, relying solely on zero-knowledge proofs can easily hit performance and system complexity ceilings. Hedger's advantage is using homomorphic encryption to handle encrypted numerical computations, then employing zero-knowledge proofs to verify the correctness of these calculations. This "division of labor" makes privacy transactions more scalable by default, rather than requiring additional processing each time.

Another particularly important point is that it incorporates auditability as an intrinsic feature, rather than an afterthought. This represents a significant improvement in financial compliance, opening up a new dimension of capability.