Author: 0xGreythorn

Market opportunities

Real World Assets (RWA) are gradually emerging as an important emerging asset class in the cryptocurrency industry. As of May 2024, the RWA market has exceeded US$6.6 billion, showing investors' strong 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 the form of digital tokens on the blockchain. This process brings several key advantages:

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

Greater liquidity: Tokenization simplifies asset trading, potentially increasing liquidity in traditionally illiquid markets.

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

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

Source: Roland Berger

Ondo Finance, with its treasury tokenization product, is well positioned to take advantage of this growth as investor interest continues to rise. RWAs are gradually becoming the core of the equity-based, real-asset-based and fixed-income-based DeFi market, with more and more projects emerging.

In today's article, we will take a deep dive into Dusk Network, a compliance-focused "infrastructure" project within the Web3 RWA space. After extensive development, Dusk's mainnet will be launched in Q2 2024, marking a major milestone for the project.

network

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

Source: Dust Network

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

Features

Dusk Network is a regulatory compliant blockchain solution designed to meet the regulatory needs of institutions. It is an open source, public, permissionless blockchain that is accessible to companies of all sizes.

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

Confidential Smart Contracts Dusk is one of the first blockchains with native confidential smart contracts, which can create and issue privacy-enabled tokenized securities. This simplifies business operations by automating audit trails, reducing administrative and legal costs, and improving overall efficiency. Institutions can also use these contracts to leverage the benefits of public networks for financial applications while maintaining compliance.

Source: Dusk Network

Zero-knowledge utility tokens

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

Competitors

Dusk Network is a unique player in the real world asset (RWA) space, focusing on regulatory compliance and emphasizing privacy protection. Here is a comparative overview of its main competitors:

Dusk's strengths lie in its privacy-supported blockchain, confidential smart contracts, and regulatory compliance, which makes it an ideal choice for financial dApps and institutions that require privacy and compliance. However, Dusk also faces several disadvantages: it is less well-known, has a smaller market capitalization, and is still in its early stages. In addition, its focus on privacy and regulatory compliance may limit its appeal to a wider range of blockchain and DeFi projects.

Token Economics

The DUSK token is the core of the Dusk Network and is described as follows:

Market Indicators

● 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 max 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, of which 500 million are issued before the mainnet, and 500 million are distributed to holders during the 18 to 36 months of the mainnet.

● Next unlock: Fully unlocked as of April 11, 2022

Token Usage

● Staking & Rewards: Lock DUSK tokens to earn rewards and enhance network security.

● Transaction and Gas Fees: Pay transaction fees and gas costs for network interactions.

● Payment and collateral: Use DUSK for payments within the network and as collateral for issuing digital assets.

Token Allocation

The vesting period starts in May 2019 and ends in April 2022.

Source: Dusk Network

Team, Fundraising, and Ecosystem

Dusk Network's team combines technical and business expertise and is 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 9 advisory board members.

Source: Duck Network

Dusk Network has raised a ton of money: $1 million in a 2020 ICO, $8.08 million in a private sale backed by Binance Labs in 2018, and $1 million in seed funding from BlockVenture.

Through its partnership with NPEX, Dusk Network is pioneering Europe’s first blockchain-powered securities exchange. This move positions Dusk for growth as digital tokenization in Europe grows in popularity, projected to reach $3.7 billion by 2032.

The latest Dusk roadmap, published on September 7, 2023, outlines a path to a mainnet launch in 2024. Key milestones include the Incentivized Testnet (ITN) and an extensive audit process.

Source: Dusk Network

Bullish fundamentals

● Strong RWA narrative: Large firms like BlackRock have shown interest in physical RWAs, highlighting their potential.

● Private Market Opportunities: Digital assets in private markets offer significant opportunities, and Dusk enables secure on-chain RWA transactions by combining privacy and compliance.

● Europe’s first blockchain stock exchange: Dusk holds the title of Europe’s first blockchain-based stock exchange.

● Diverse programming support: The Dusk blockchain supports multiple programming languages, including Rust, C, C++, and Go, and runs on Piecrust, Dusk’s ZK-friendly virtual machine that optimizes privacy and efficiency.

● Dusk Grant Program: Called Thesan, this program commits 15 million DUSK to support developers building on the Dusk network, fostering innovation and growth.

● Mainnet Launch: Dusk Network’s roadmap is progressing towards a mainnet launch in Q2 2024.

Bearish fundamentals

● Competitive Pressure: ONDO is in the lead in the RWA narrative and is likely to continue to attract the majority of attention and market share, especially given its close ties with BlackRock.

● Lack of Smart Fund Interest: Our internal team has not yet identified smart funds showing significant interest in purchasing and accumulating DUSK tokens, although any changes will continue to be monitored.

● Strategic Risks: Dusk focuses on the infrastructure for tokenizing physical assets, and this narrow focus may pose strategic risks.

● Regulatory challenges: Navigating complex legal frameworks for tokenization in different jurisdictions is challenging. The confidential smart contracts used by Dusk expose it to regulatory hurdles related to smart contract enforceability and asset classification.

Disclaimer

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