The Blockchain Revolution of Real-World Assets

Real-world assets ( RWA ), as an emerging asset class in the cryptocurrency industry, are gradually coming to prominence. As of May 2024, the RWA market size has exceeded 6.6 billion USD, reflecting strong interest and increasing demand from investors for this innovative financial product. The rise of RWA is closely linked to the widespread application of Blockchain technology. Through tokenization, physical assets such as real estate, commodities, and intellectual property can be represented digitally on the blockchain. This process brings several key advantages:

1. Asset Segmentation: Previously difficult-to-divide assets can now be split into smaller units of tokens, allowing more investors to participate.

2. Liquidity Enhancement: Tokenization simplifies the asset trading process and is expected to enhance the liquidity of traditional illiquid markets.

3. Transparency and Security: Blockchain technology ensures the security and transparency of transactions, reducing counterparty risk.

RWA, after being tokenized and put on the blockchain, can serve as a source of income for decentralized finance ( DeFi ). It is expected that by 2030, the market size for asset tokenization will reach an astonishing $10 trillion.

As investor interest continues to rise, some projects are expected to gain a favorable position in this growth process. RWA is gradually becoming the core of the DeFi market based on equity, physical assets, and fixed income, with related projects continuously emerging.

This article will delve into Dusk Network, an infrastructure project focused on compliance in the Web3 RWA space. After a long development period, the Dusk mainnet is scheduled to launch in the second quarter of 2024, marking an important milestone for the project.

Dusk Network Overview

Dusk Network is a blockchain platform designed for regulatory and decentralized finance. It focuses on issuing digital securities, aiming to achieve compliance automation and auditability while protecting user data privacy. By integrating privacy and compliance, Dusk Network facilitates the secure on-chain trading of RWAs.

Dusk Network employs a unique consensus mechanism that combines Proof of Stake ( PoS ) and zero-knowledge encryption technology to ensure confidentiality and compliance. The platform aims to simplify the regulatory market by eliminating high-cost intermediaries, while still adhering to regulatory standards.

Main Features of Dusk Network

1. Regulatory-compliant blockchain solutions: Dusk Network aims to meet the regulatory needs of institutions. It is an open-source, public, permissionless blockchain that allows companies of all sizes to use it.

2. Integrated Privacy Protection: Dusk provides a privacy-focused system for the tokenization, clearing, and settlement of financial instruments. They developed the Citadel protocol, integrating a self-sovereign identity system into the Dusk Blockchain, and created an off-chain version called Shelter for private KYC for institutions. Users can selectively disclose information and protect their data.

3. Confidential Smart Contracts: Dusk is one of the first blockchains to have native confidential smart contracts, allowing for the creation and issuance of privacy-enabled tokenized securities. This simplifies business operations by automating audits, reducing administrative and legal costs, and enhancing overall efficiency. Institutions can also leverage these contracts to utilize the advantages of public networks for financial applications while ensuring compliance.

4. Zero-Knowledge Proof Technology: Dusk uses Zero-Knowledge Proof ( ZKP ) technology, allowing verification without revealing underlying data. By integrating PLONK — an advanced zero-knowledge encryption technology, Dusk ensures robust privacy protection.

Competitive Landscape

Dusk Network is a unique participant in the RWA space, focusing on regulatory compliance and privacy protection. Its main competitors include Mantra, Nexera, Securitize, Oasis Network, Secret Network, and Ondo Finance.

The advantages of Dusk lie in its privacy-supporting blockchain, confidential smart contracts, and regulatory compliance, making it an ideal choice for financial dApps and institutions that require privacy and compliance. However, Dusk also faces some challenges, such as lower visibility, smaller market capitalization, and still being in the early stages. Additionally, its focus on privacy and regulatory compliance may limit its appeal to a broader range of blockchain and DeFi projects.

Token Economics

The DUSK token is at the core of the Dusk Network and has the following characteristics:

• Market Cap: $220.72 million ( based on circulating supply and price )
• Rank:#271
• Fully Diluted Valuation ( FDV ): $237.65 million ( based on total supply and price )
• Rank:#350
• Circulating Supply: 46.96% of the maximum supply of 469.62 million DUSK( )
• Total Supply: 500 million DUSK
• Maximum Supply: 1 billion DUSK

The use of tokens includes staking and rewards, trading and Gas fees, payments and collateral, etc.

Team, Fundraising and Ecosystem

The Dusk Network team is led by founders Emanuele Francioni, Fulvio Venturelli, and Jelle Pol, who bring extensive experience from top institutions and companies. The team is supported by 17 technical staff and 9 advisory board members.

In terms of fundraising, Dusk Network has raised a substantial amount of funds, including $1 million raised during the 2020 ICO, $8.08 million raised from private sales supported by a certain trading platform in 2018, and $1 million raised from BlockVenture's seed fund.

Through collaboration with NPEX, Dusk Network is pioneering Europe’s first blockchain-driven securities exchange. This initiative positions Dusk favorably in the context of the increasing popularity of digital tokenization in Europe, with the market expected to reach $3.7 billion by 2032.

According to the latest roadmap released on September 7, 2023, Dusk Network plans to launch its mainnet in 2024. Key milestones include the incentivized testnet (ITN) and a comprehensive auditing process.

Investment Outlook Analysis

Bullish Factors:

• The RWA market has a broad prospect.
• Huge opportunities in the private market
• The status of Europe's first Blockchain stock exchange
• Diverse programming language support
• Dusk Grant Program to Promote Ecosystem Development
• The mainnet is set to launch in the second quarter of 2024.

Bearish factors:

• Intense competition from other projects
• Lack of attention to smart funds
• Strategic risks focused on the tokenization infrastructure of real assets
• The complex regulatory environment poses challenges.

Overall, Dusk Network has unique advantages in the RWA and privacy protection fields, but still faces intense market competition and regulatory challenges. Investors need to weigh its innovative technology and market potential against its current development stage and competitive landscape to make informed investment decisions.