Market Opportunities

Real World Assets (RWA) as an important emerging asset class in the cryptocurrency industry are gradually gaining prominence. As of May 2024, the RWA market has exceeded $6.6 billion, demonstrating strong investor interest and growing demand for this innovative financial product. The rise of RWA is closely related to the widespread application of blockchain technology. Through tokenization, real-world assets such as real estate, commodities, and intellectual property can be represented in digital token form on the blockchain. This process brings several key advantages:

Fractional Ownership: Previously indivisible assets can now be divided into smaller tokens, allowing a broader range of investors to participate.

Increased Liquidity: Tokenization simplifies asset trading and has the potential to increase liquidity in traditionally illiquid markets.

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

By tokenizing and putting RWA on the chain, it can serve as a source of income in decentralized finance (DeFi). It is expected that by 2030, the asset tokenization market will surge to $10 trillion.

Source: Roland Berger

With its national treasury tokenization product, Ondo Finance is poised to take advantage of this growth as investor interest continues to rise. RWA is gradually becoming the core of the DeFi market based on equity, real assets, and fixed income, with more and more projects emerging.

In today's article, we will delve into Dusk Network, a "infrastructure" project within the Web3 RWA field that emphasizes compliance. After extensive development, Dusk's mainnet is set to launch in the second quarter of 2024, marking a significant milestone for the project.

Network

Dusk Network is a blockchain platform designed for regulation and decentralized finance. It focuses on issuing digital securities, aiming to automate compliance while keeping user data private and auditable. By integrating privacy and compliance, Dusk Network facilitates secure on-chain transactions for RWA.

Source: Dusk Network

Using a unique consensus mechanism that combines PoS and zero-knowledge encryption elements, Dusk Network ensures confidentiality and compliance. The platform aims to simplify regulated markets by eliminating high-cost intermediaries while still adhering to regulatory standards.

Features

Regulation-Compliant Blockchain Solution Dusk Network aims to meet institutional regulatory requirements. It is an open-source, public, permissionless blockchain, accessible to companies of all sizes.

Integrated Privacy on Dusk Network Dusk provides a privacy-focused system for tokenization, clearing, and settling financial instruments. They have developed the Citadel protocol, integrating a self-sovereign identity system into the Dusk blockchain, and have also developed an off-chain version called Shelter for institutional private KYC. Users can selectively disclose their information and protect data.

Confidential Smart Contracts Dusk is one of the first blockchains with native confidential smart contracts, enabling the creation and issuance of privacy-enabled tokenized securities. This simplifies business operations, automates audit trails, reduces administrative and legal costs, and improves overall efficiency. Institutions can also leverage these contracts to utilize the advantages of public networks while complying with regulations.

Source: Dusk Network

Zero-Knowledge Practical Tokens

Dusk utilizes Zero-Knowledge Proof (ZKP) technology, which allows verification without revealing underlying data. By integrating PLONK – a cutting-edge zero-knowledge encryption technology, Dusk ensures strong privacy protection.

Competitors

Dusk Network is a unique participant in the Real World Assets (RWA) field, focusing on regulatory compliance and emphasizing privacy protection. Below is a comparative overview of its main competitors:

Competitor

Key Features

Differentiation from Dusk

Dusk's Competitive Advantage

Mantra

• Built on Cosmos SDK

• Layer 1

• Tokenization of RWA

• Decentralized Identity System (DID)

• Compliance-focused exchange

• Broader application scope

• Higher market value

• Privacy-supporting blockchain

• Confidential smart contracts

Nexera

• Tokenization solution

• Operates across multiple blockchains

• Collaboration with Chainlink and Peaq

• Not a Layer 1

• Focuses on multi-chain

• Emphasis on privacy

• Progress towards obtaining EU license

Securitize

• Digital securities platform

• Blockchain tokenization

• Collaboration with BlackRock

• Strong Web2 integration

• High-profile partnerships

• High-yield bonds with BWRE

• Emphasis on privacy

Oasis Network

• Offers customizable privacy services for dApps

• Independent consensus and computation layer

• Achieves privacy through different layers

• Inherent privacy

• Confidential smart contracts

Secret Network

• Privacy-protecting smart contracts

• Built on Cosmos SDK

• Different privacy enforcement measures

• Inherent privacy

• Regulatory compliance

Ondo Finance

• DeFi and institutional-grade products

• Tokenization of RWA

• Structured financial products

• Mainly focused on DeFi

• Structured products

• Privacy-supporting blockchain

• Provides confidential smart contracts

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 several challenges: it has lower visibility, a smaller market value, and is still in the early stages. Additionally, its focus on privacy and regulatory compliance may limit its attractiveness to a broader range of blockchain and DeFi projects.

Tokenomics

The DUSK token is at the core of the Dusk Network, with the following details:

Market Metrics

• 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: 469.62 million DUSK (46.96% of the maximum supply). Tokens held by the team or controlled by Dusk deployers are not considered part of the circulating supply.
• Total Supply: 500 million DUSK
• Maximum Supply: 1 billion DUSK, with 500 million issued before the mainnet and 500 million distributed to holders over 18 to 36 months during the mainnet.
• Next Unlock: Fully unlocked as of April 11, 2022

Token Utility

• Staking and Rewards: Lock DUSK tokens to earn rewards and enhance network security.
• Trading and Gas Fees: Pay transaction fees and gas costs for network interactions.
• Payments and Collateral: Use DUSK for payments within the network and as collateral for issuing digital assets.

Token Distribution

The vesting period runs from May 2019 to April 2022.

Source: Dusk Network

Team, Funding, and Ecosystem

The Dusk Network team combines technical and business expertise, led by founders Emanuele Francioni, Fulvio Venturelli, and Jelle Pol. They bring experience from top institutions and companies. Their innovative work is supported by 17 technical team members and a 9-member advisory board.

Source: Dusk Network

Dusk Network has raised significant funds: a $1 million ICO in 2020, an $8.08 million private sale supported by Binance Labs in 2018, and a $1 million seed fund from BlockVenture.

Through a partnership with NPEX, Dusk Network is pioneering the first blockchain-driven securities exchange in Europe. This positions Dusk for growth as digital tokenization becomes more prevalent in Europe, with an expected reach of $3.7 billion by 2032.

The latest Dusk roadmap announced on September 7, 2023, outlines the path to the mainnet launch in 2024. Key milestones include the incentivized testnet (ITN) and extensive audit processes.

Source: Dusk Network

Bullish Fundamentals

• Strong RWA Narrative: Interest from major companies like BlackRock in real-world assets highlights their potential.
• Opportunities in Private Markets: Digital assets in private markets offer significant opportunities, and Dusk enables secure on-chain RWA transactions by combining privacy and compliance.
• First Blockchain Stock Exchange in Europe: Dusk holds the title of the first blockchain-based stock exchange in Europe.
• Diverse Programming Support: Dusk blockchain supports multiple programming languages, including Rust, C, C++, and Go, running on Piecrust, Dusk's ZK-friendly virtual machine, optimizing privacy and efficiency.
• Dusk Grants Program: The Thesan program promises to provide 15 million DUSK to support developers building on the Dusk network, fostering innovation and growth.
• Mainnet Launch: Dusk Network's roadmap is progressing towards the mainnet launch in the second quarter of 2024.

Bearish Fundamentals

• Competitive Pressure: ONDO is leading the RWA narrative and may continue to attract the majority of attention and market share, especially with close ties to BlackRock.
• Lack of Smart Money Interest: Our internal team has not observed significant interest from smart money in purchasing and accumulating DUSK tokens, although any changes will continue to be monitored.
• Strategic Risk: Dusk's focus on infrastructure for tokenizing real-world assets may bring strategic risks due to its narrow focus.
• Regulatory Challenges: Navigating complex legal frameworks for tokenization in different jurisdictions is challenging. Dusk's use of confidential smart contracts exposes it to regulatory barriers related to smart contract executability and asset classification.

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