Why Public Blockchains Have a Hard Time with Regulated Assets -And How @Dusk Attacks the Problem.
Openness was the concept on which public blockchains were built. All the transactions, all the state changes, and all the execution logic are default visible. This free and fair system is suitable to open financial systems, but causes instant conflict at the point of being regulated with assets.
Controlled assets have limitations which native chains are not established to honor. The restriction of transfers, eligibility regulations, jurisdictional boundaries, as well as confidential settlements are frequently implemented off-chain or via mediators. The blockchain can contain the records of the transaction, yet the rules are provided in another place. This division brings about operational risk and legal ambiguity.
@Dusk Foundation deals with the issue in the reverse way. Dusk makes the execution model conform to a transparency-first model, rather than enforcing regulated assets to change their form. Unnecessary exposure is avoided by confidential execution, and the rules of compliance are not imposed as a secondary check, but as part of transaction validity.
This enables regulated assets to be fully on-chain without being remodeled to align with assumptions of public visibility. @Dusk does not shroud over the drawbacks of the public blockchain - it eliminates them on the protocol level.
