Someone once said that in traditional finance, there is no such thing as the false dilemma of "privacy vs compliance." The rules are actually simple: what needs to be hidden should be hidden, but at critical moments, it must be possible to verify and explain. In contrast, privacy solutions in the crypto space tend to go to extremes—either privacy means "no one can see," which results in outright bans by regulators; or to pass audits, everything is made transparent—transaction ideas, position changes, fund flows—all exposed, turning institutions into easy targets.

This is why Dusk's Hedger solution has attracted attention. It doesn't treat privacy and compliance as slogans but instead turns the contradiction into a product requirement, providing a realistic and feasible technical solution.

Hedger's positioning is very clear—it is the privacy engine for DuskEVM, but don't think of it as a "concealment tool." It should be called a "cryptographically secure and verifiable" transaction layer. The official description is a combination of homomorphic encryption and zero-knowledge proofs, embedding privacy into the EVM execution layer while leaving interfaces for real-world financial auditing and compliance channels. Industry terminology calls this "compliance-ready privacy."

It sounds a bit abstract, but when applied to actual scenarios involving regulated assets like "securities, funds, RWA," it becomes an essential requirement: without privacy, institutions can't participate; without audits and regulation, access is blocked. Both conditions must be met to enter the market.

On the technical side, it's not just a collection of concepts. Homomorphic encryption allows computations on encrypted transaction data, while zero-knowledge proofs ensure all calculations can be verified without revealing the original information—this combination protects traders' privacy while providing regulators with a legal basis for auditing. For institutional users and compliance scenarios, this is almost a must-have.