The Rise of Real World Assets in the Crypto Assets Industry

Real World Assets (RWA) are emerging as a new asset class in the Crypto Assets industry and are rapidly evolving. As of May 2024, the RWA market size has surpassed $6.6 billion, demonstrating strong investor interest in this type of 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, bringing several advantages:

• Asset ownership can be tokenized: previously indivisible assets can now be divided into smaller parts, allowing more investors to participate.
• Increased Liquidity: Tokenization simplifies the asset trading process and is expected to enhance liquidity in traditional illiquid markets.
• Enhance transparency and security: Blockchain technology ensures that transactions are secure and transparent, reducing counterparty risk.

RWA can serve as a source of yield for decentralized finance (DeFi) through tokenization and on-chain processes. The asset tokenization market is expected to reach a size of $10 trillion by 2030.

As investor interest continues to grow, RWA is gradually becoming the core of the DeFi market based on equity, physical assets, and fixed income, with related projects emerging continuously.

This article will delve into Dusk Network, an infrastructure project focused on compliance in the Web3 RWA space. After long-term development, Dusk's 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 specifically designed for regulatory and decentralized finance. It focuses on the issuance of digital securities and aims to achieve automated compliance while protecting user data privacy. By integrating privacy and compliance, Dusk Network facilitates the secure on-chain trading of RWA.

Dusk Network adopts a unique consensus mechanism that combines PoS and zero-knowledge encryption technology, ensuring confidentiality and compliance. The platform aims to simplify the regulatory market by reducing high-cost intermediaries while still adhering to regulatory standards.

Main Features

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 utilize it.

2. Integrated Privacy: Dusk provides a privacy-focused system for the tokenization, clearing, and settlement of financial instruments. They developed the Citadel protocol, which integrates a self-sovereign identity system into the Dusk blockchain, and they also 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 with native confidential smart contracts, capable of creating and issuing privacy-enabled tokenized securities. This simplifies business operations by automating audit trails, reducing administrative and legal costs, and improving overall efficiency. Institutions can also leverage these contracts to utilize the advantages of public networks for financial applications while complying with regulations.

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

Competitive Landscape

Dusk Network is a unique player in the RWA space, focusing on regulatory compliance and privacy protection. Below is a comparison of its main competitors:

1. Mantra: Built on the Cosmos SDK, it is a Layer 1 blockchain that offers RWA tokenization and a decentralized identity system. Compared to Dusk, Mantra has a broader application scope and a higher market capitalization.

2. Nexera: Provides tokenization solutions, operating across multiple blockchains. Unlike Dusk, Nexera is not a Layer 1 blockchain and focuses on multi-chain operations.

3. Securitize: A digital securities platform that provides blockchain tokenization services in collaboration with well-known institutions like BlackRock. In contrast, Dusk places more emphasis on privacy and compliance.

4. Oasis Network: Provides customizable privacy services for dApps, with independent consensus and computation layers. Dusk's advantage lies in its built-in privacy and confidential smart contracts.

5. Secret Network: Provides privacy-protecting smart contracts built on the Cosmos SDK. Dusk may have advantages in regulatory compliance.

6. Ondo Finance: Focused on DeFi and institutional-grade products, offering RWA tokenization and structured financial products. The advantage of Dusk lies in its privacy-supported blockchain and the confidential smart contracts provided for RWA.

The main advantages of Dusk lie in its privacy-supported 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 its early stages. Moreover, 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 the core of the Dusk Network, with the following key indicators:

• Market Cap: 220.72 million USD
• Rank: #271
• Fully Diluted Valuation (FDV): $237.65 million
• Rank: #350
• Circulating Supply: 469.62 million DUSK (46.96% of maximum supply)
• Total Supply: 500 Million DUSK
• Maximum supply: 1 billion DUSK

The use of tokens includes staking and rewards, paying transaction fees and Gas costs, as well as making payments within the network and serving as collateral for issuing digital assets.

Team and Ecosystem

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

In terms of fundraising, Dusk Network has raised considerable funds: the 2020 ICO raised $1 million, the private sale supported by a well-known investment institution in 2018 raised $8.08 million, and the seed round raised $1 million.

Dusk Network is collaborating with NPEX to develop the first blockchain-driven securities exchange in Europe, positioning Dusk favorably in the European digital tokenization market.

The latest roadmap released in September 2023 outlines the plan for the mainnet launch in 2024, including the Incentivized Testnet (ITN) and a comprehensive audit process.

Investment Outlook

Bullish Factors:

• Strong growth in the RWA market
• The huge opportunities of digital assets in private markets
• Development 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 RWA projects
• Has not yet attracted significant attention from institutional investors.
• Focus on the strategic risks of the infrastructure for the tokenization of real assets
• A complex regulatory environment presents challenges.

Overall, Dusk Network has unique advantages in the RWA and privacy protection fields, but still faces challenges such as market competition and regulation. With the mainnet about to launch, investors should closely monitor its development trends and market reactions.