Recently, I saw a Layer-1 project that is specifically balancing privacy and compliance, which is quite interesting. Basically, it uses the SBA consensus mechanism combined with PlonK zero-knowledge proof circuits, allowing smart contracts to run directly on encrypted data without exposing any information.

This solution seems particularly suitable for the financial sector. Imagine tokenized securities, automated compliance checks, private transactions... These are conflicting needs on traditional blockchains, but this project has managed to incorporate privacy into the protocol layer. It protects user data privacy while maintaining auditability of operation records, allowing regulators to verify.

The challenge lies in—how to find a balance between decentralization and regulatory requirements. From a technical architecture perspective, their approach is quite clear.