Hello everyone. Today I want to discuss an interesting phenomenon — something that seems very straightforward but often works the opposite way.

For example, on-chain transparency. Retail investors like transparency, thinking it gives them a sense of security. But if you've actually conducted large on-chain transactions, especially those involving institutional scale, you'll find that transparency is a double-edged sword.

Where's the problem? Transparency isn't just "everyone can see," but more seriously, "everyone can read what you're trying to do." Your position intentions, risk control settings, next steps — all are preemptively seen through by the market. Market makers will be watched closely, institutional orders may be sniped, and every on-chain action is anticipated in advance. In the end, you realize you're not really trading; you're just helping your opponents write the script.

So, a bunch of "privacy solutions" have emerged, each touted as a lifeline. But there's an awkward point — real-world financial regulation doesn't buy into this. Mention privacy, and regulators will simply pass. Especially in scenarios involving RWA and regulated securities, compliance and audits are not optional; they are the bottom line.

How to break through? I've always believed that the real solution isn't a one-size-fits-all "nobody can see," but rather "default confidentiality + auditable authorization."

You can think of this state as similar to common practices in traditional finance: transactions are opaque externally, but once compliance, audit, or regulatory needs arise, you can immediately produce evidence proving that the transaction is real, traceable, and transparent at every step.

Recently, I saw in an official analysis that Hedger, as a privacy engine targeting the EVM execution layer, uses this very approach. It combines homomorphic encryption and zero-knowledge proofs to bring confidential transaction capabilities into DuskEVM, while always maintaining the "compliance-ready" privacy feature. Essentially, this means: your transactions can be private, but this privacy is within a compliant framework.

This perspective is quite interesting. It satisfies institutional needs for privacy protection (preventing opponents from reading my cards) and also meets regulatory requirements for auditability (being able to prove everything when needed). Rather than viewing privacy and compliance as a compromise, it's more about truly understanding each side's demands and finding a middle ground acceptable to both.

This might be the direction future financial infrastructure should take — not hiding from regulation, but using smarter technology to deliver what participants genuinely need, all while adhering to the rules.