Coin Watch – Dusk Network – The Smart Contract, Privacy, STO Platform The Market Needs

But first… The Problem.

Before we get on to the project itself, I first want to talk about privacy. This is a very important subject and a somewhat controversial topic in cryptocurrency. There has been back and forth in the crypto space over the past couple years on this subject. You may notice some content creators are for privacy coins and some against. Most of this back and forth is due to regulation and the anticipation of more regulation. Some of it may stem from core values when it comes to how they believe people should interact and transact.

What you have to remember is that lack of privacy is one of the reasons why STOs are under such scrutiny in the crypto space. For STOs to be fully adopted onchain we NEED privacy layers to protect not only investors, but also projects and the market at large. There is a lot of misinformation in the market on this front when it comes to privacy and privacy chains. There are also other factors that I will write a future post on when it comes to privacy.

One of the reasons we need privacy to protect the market itself is possibly one of the most important ones and we can see it in the crypto markets every day. At this very moment many of us use bots that report when large sums of crypto are moved. This in and of it self manipulates the market. To have a more stable and regulated sector of crypto we would need to mitigate this and to do that, there would need to be privacy. There have been plenty accounts of the SEC stating this.

Onto the project… The solution.

Enter, The Dusk network. The layer 1, built from the ground up blockchain solution that houses many features that makes it a powerhouse, targeting the STO market. This is one of the reasons I like this project so much. STOs will have room in the crypto market along side many other sectors. I have stated many times that the cryptocurrency market is NOT a 0 sum game. What it is, is the next step in evolution in regards to how humans interact and transact. This means there is plenty room and plenty market share for multiple projects to thrive and this is one of them.

As dusk targets the security token offering market we must keep in mind the leg work that the team has done to be compliant and bridge the gap between the crypto world and the traditional finance world. The Dusk Network is built by design to comply with regulations. This allows for STOs and the permissionless onboarding of businesses from traditional markets to the blockchain, if they are looking to offer security tokens. This gives both the project and the cryptocurrency market as a whole an advantage, as it will act as an onramp for more entities to join in on cryptocurrency in general.

With that said, it also gives investors an advantage and a place to invest in securities with out having to worry if their project will come under regulatory scrutiny and THIS is very important. If you were around back in 2018, you will remember that project prices would sometimes take nose dives because a rumour or article would surface that the SEC was calling it a security. In Dusk’s ecosystem this would not happen.

Both sides can interact and transact with privacy in mind (as entities have the right and need to) and initiate smart contracts to automate their business.

A project like this can be a game changer to help bring in mass adoption. It can help onboard companies that are yet to enter into the blockchain space because as it stands now they may not have the clearance to enter the market. There are a slew of companies and corporations out there that simply cannot enter the blockchain and crypto space because of the sheer lack of acceptable regulated environment to do so. Until now.

The Tech

Let’s imagine a much more scalable, quicker Ethereum aimed at STO’s. Let’s also imagine the ICO bubble of 2017 but more sustainable because anything that would be considered an STO would already be compliant. The dusk network removes middle men from regulated markets while maintaining regulatory compliance.

The Dusk Network is a permissionless, zero knowledge proof, private, smart contract platform. The regulatory framework is woven into the fabric of the platform itself. There is a lot that goes into this because securities and the regulation thereof can be tricky to navigate. There are factors that may come into play such as local laws which can change from place to place.

We also have to look at what security tokens are. Where coins like ETH simply give users the access to use the blockchain and send data by using ETH as gas, a security token is different. It grants the user access to profits by way of dividends. It can also grant access to voting rights and ownership of something.

The Dusk Network uses a new consensus algorithm called Segregated Byzantine Agreement (SBA) which adds data to the blockchain. Each block has 3 rounds it must go through before it can be finalized onto the chain.

1. It starts with block generation. Multiple participants have the option to propose a block for this round.
2. Afterwards, the blocks are reduced to a single potentially winning block.
3. If this block is honest and created fairly, a block agreement adds this block to the chain.

The Dusk Network consists of three layers:

1 — DUSK Anonymous Network Layer

A gossip oriented communication tier inspired by I2P.

What is I2P and the inspiration behind the gossip oriented layer? I2P is the Invisible Internet Project. It is an encrypted private network that protects internet activity and locations of its users.

2 — Segregated Byzantine Agreement

A novel privacy-oriented consensus algorithm vastly more efficient than PoW or PoS. Powered by Proof of Blind Bid.

3 — Secure Tunnel Switching

A protocol allowing cryptocurrency payments for time-unbound and fast data transmission.

DUSK tokens can be used as utility tokens too transact. They can also be used for swaps, to deploy smart contracts and for staking. The team also has plans to add the ability to use DUSK tokens for governance.

Analysis

At the time of writing, the Dusk Network is sitting at #407 in the list of all cryptocurrencies. This gives it a ton of room to grow. Taking a look at the charts we can see, it is still very early.

Taking a look below we can see that DUSK may be in a good place to accumulate as it looks to be forming a symmetric triangle. The white line above will act as a resistance point, but where the market is now with Bitcoin on the rise and what is looking like a new ALT cycle that is getting ready to make more upwards moves, if this breaks out to the upside we will see it move up, smashing through resistances fairly quickly and retest what would become new support. After which it would have a continuation upwards and onwards.

Conclusion

All in all, I like DUSK and from a fundamental standpoint, the logic behind this project is sound. The crypto space needs an environment where the STO sector can be onboarded and this chain is the place to do it. In particular I believe the focus on STOs with this project can possibly be a catalyst to a new boom similar to the 2017 ICO explosion. With the project onboarding STOs instead of ICOs I believe if it does lead to a boom cycle, it would be much more sustainable. As far as the project’s team goes, they are full of great talent with work history at big companies, firms and universities. For the sake of keeping this article brief. Please see more here.

ICOs paved the way to new, faster and more scalable chains that can allow for a higher amount of world wide transactions onchain, which allows the entire cryptocurrency market cap to get higher. STOs could be the thing that paves the way for more business models to get onchain, which would lead to an even higher market cap in all of crypto. This makes DUSK a project to keep a close eye on.

Categorised in: Cryptocurrency Markets, Fundamental Analysis

This post was written by BlockAdvisor