June 11, 2019
Tokenization of securities is often viewed as one of the most interesting aspects of the blockchain industry. And today, we are going to find out more about Dusk, the blockchain technology for securities. Mels Dees, a member of the founding team of Dusk, will help us.
What is Dusk, and what problem it solves?
Dusk Network is a permissionless blockchain engineered for a wide range of applications requiring high standards of security, efficiency, and privacy. These span from issuance, management, and trading of digital assets in regulated financial contexts (i.e., securities and commodities), to consumer and enterprise propositions operating on a network with strong privacy foundations. DUSK can be used seamlessly to purchase securities, deploy autonomous and decentralized dApps, pay for gas fees, simplify access to governance operations (e.g., voting, dividend payouts to shareholders), securely externalize sensitive-data infrastructures (digital identity management, KYC lists), and more.
Could you elaborate more on the background of your project? For example, how the idea of Dusk appeared?
We conceived the Dusk Network to solve blockchain’s unanswered challenges: scalability, privacy, and compliance.
During the inception of the Dusk Network, it’s been our priority to create an ecosystem that is accessible by anyone, truly lowering the barrier to enter the financial industry and replace intermediaries effectively with technology. We are creating a blockchain that will become the backbone of a fairer financial industry, by allowing anyone to participate in the consensus, no matter their size. Where monopolistic power structures are disincentivized, forks are prevented, and trades are settled instantaneously.
Regulatory compliance is essential for everything related to securities. Could you tell us a little about the legal side of Dusk?
Dusk Network is used to register, issue, and trade digital securities. Thereby the Dusk Network needs to serve as a financial market infrastructure (FMI) and cater to the many demands of the highly-regulated securities market. Issuers and investors alike must be protected, and the ability to comply with a diverse choice of legislative and regulatory requirements needs to come naturally. Our goal is to provide a layer 1 blockchain that has none of the friction we see in current general purpose blockchains (such as lack of privacy, unclear settlement finality, forks, unclear governance policies). Naturally, we have validated our approach with various legal teams.
Dusk whitepaper highlights the importance of privacy. How is privacy achieved?
Dusk is built upon the so-called zero-knowledge (ZK) cryptography, which allows for individuals to prove a wide range of statements in a non-interactive way, without sharing any information on the input of these statements. ZK is used extensively within Dusk to allow network participants to transact confidentially (i.e., without revealing neither the sender, recipient nor payload) and simultaneously prove compliance to an arbitrary set of rules encoded on smart contracts adhering to Dusk’s Confidential Securities Contract standard (XSC). The foundational technology used to implement a ZK empowered ecosystem exploits many algorithms and techniques, from Bulletproofs transactions, to Stealth Address, Blind Bidding, zero-knowledge set inclusion proofs and more. Read more via our article on privacy-preserving technology.
What kind of partnerships, now or in the future, do you consider the most important for Dusk ecosystem?
We are very excited about the fact that we are almost releasing our full testnet, and are really looking forward to the feedback of our community & welcoming new members to our growing pool of contributors!
We are very happy to have been able to partner up with actors active in newly established markets as well as traditional financial institutions, with whom we are in close touch in order to keep refining the specifications and functionalities of Dusk Network. All documentation and standards are being developed for the public domain and are published according to the highest open source standards. Deliverables thus include concise documentation that allows any party to immediately use Dusk Network.
Additionally, we are actively building partner channels planning to issue security tokens on Dusk Networks, attracted by our tokenization standard and smart contract interface. Typical partner profiles are legal studios, large consultancy firms, or large venture capital firms.
Last but not least, with our partner iFinex we have some very special news coming up!
Do you see any blockchain projects as your competitors?
At the risk of sounding a bit pretentious, we have to be honest and answer no. Nowadays, pure layer 1 blockchains either focus on payment related USPs (Bitcoin, Monero, Zcash, etc.) or on generic purpose smart-contract VM. There is indeed a number of layer 2 applications trying to enter the security market, but they all struggle to work around the limitations of the technology they are based upon. No matter the jurisdiction, regulatory frameworks for securities demand satisfaction of strict requirements of privacy, reliability, accountability, and auditability. No open ledger or forkable blockchain based on traditional consensus methodology (PoW or PoS) is capable of simultaneously satisfying these points. This is the reason why we developed Dusk Network from the ground up, to be the first real alternative to central security depository, and let the regulated financial market leap forward to the age of global security token depository.
What milestones are there for Dusk in 2019?
At present we are rolling out our TestNet to the public so they can experiment with the tech and “break it until we make it”, which is our motto for the TestNet phase. Thereafter, we are very excited to release our mainnet. Part of the mainnet will be a browser add-on through which users can partake in the network’s safekeeping by verifying zero-knowledge proofs. We are planning a lot more for that add-on, but cannot disclose that at present.
What are your thoughts on the future of Security Tokens and STOs?
Security Tokens (also known as ‘digital shares’) are already a well-known asset in the digital and financial world, and its potential is huge. Digital shares jump right into the gap between traditional financial markets and the digital tokenized world via DLT. It has the power to disintermediate the current financial asset market and create liquidity in markets that were illiquid before. However, we have yet to see this promise come true. We believe tokenized securities will be a lot bigger than security tokens and bring this much-needed liquidity. In brief, Tokenized Securities are ‘the wrapping of a traditional and usually ‘tradable’ financial products into a token.’ Whereas a security token is a token with equity characteristics born on the blockchain.
How cool would it be to tokenize highly illiquid shares of companies such as SpaceX, AirBNB, or WeWork. That is what we believe is the future of "Security Tokens", or better: Tokenized Securities.
One more question. Is Dusk listed on any exchange/ is there some information about the future listings?
DUSK will be available via Ethfinex and Bitfinex.
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Thanks to Mels, we had a wonderful interview to stay updated with Dusk Network news.
Here are some useful links to learn more about Dusk:
More crypto interviews are coming soon. Stay tuned to www.undervalued.top!
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Update: Dusk Network token is now available! We recommend to buy DUSK at Binance Exchange.