How @Dusk Confidential Execution Can Be done without violating compliance requirements.
The concept of confidential execution is usually confused with the trade-off. It is assumed that as soon as the information about transactions is concealed, it becomes more difficult or impossible to enforce or supervise it. This is based on the assumption of systems in which privacy has been overlaying an execution model that was not originally developed to handle privacy.
Confidential execution and compliance are to be done in Dusk Foundation; however, they are not opposing to each other.
@Dusk makes a distinction between verification and visibility. Transactions are executed in a secure environment where the input of actions and contract resolution are confidential, yet the network is able to verify its accuracy. Meanwhile, the compliance rules are imposed as a subset of the validity of the transactions. When the eligibility requirements, transfer limitations or even jurisdiction requirements are not fulfilled, the execution is not made.
It implies that compliance is not based on off-chain verification or the intermediaries that can be trusted. It is imposed by the protocol itself and does not necessitate the public disclosure. In the case of regulated assets, it eliminates a long-standing privacy/enforcement conflict.
@Dusk demonstrates that when confidentiality and compliance are both considered as first-class protocol properties, the compliance is not compromised.
