Dusk aligns with the concept of "regulated DeFi," which sounds quite abstract. But looking closer, private equity and bonds are where its technology can really be implemented.

The issues in the private equity market are well-known—opaque transaction information, tedious processes (a bunch of legal documents), chaotic shareholder management, and extremely poor liquidity. How does Dusk plan to break through? By using privacy smart contracts to tokenize equity shares and directly distribute them to qualified investors, eliminating many intermediaries. Shareholders wanting to transfer equity can settle point-to-point after a quick discussion, without waiting for lengthy manual approval processes. Transfer records can also be traced and verified on-chain. There’s even the possibility of creating a private secondary trading market accessible only to authorized parties, giving these tokenized equities real liquidity. Improved efficiency and liquidity—two birds with one stone.

The bond market follows a similar logic. Especially for private bonds issued by small and medium-sized enterprises, the entire process—from issuance, interest payments (which can be automated with privacy transactions), to maturity redemption—can be programmed. Confidentiality of bondholder information is a major selling point for institutional investors.

Regulation and auditing are also manageable. Authorized parties can obtain specific keys to verify whether the total issuance amount and the number of holders are within limits when needed, without examining each individual holding. This satisfies regulatory requirements while protecting privacy.

The DuskTrade platform targets these kinds of private securities. Frankly, the challenge is that these markets are extremely conservative and demand high legal certainty. Dusk needs to work closely with legal teams and professional service providers to ensure processes comply with specific regulations like MiFID II. Every successful case requires a coordinated effort across technology, legal, and business aspects. Once fully operational, it will form a deep moat.