A recap of the Binance Community AMA on April 16th
In the wake of DuskCon, our inaugural Dusk Conference, it was decided to give the community an additional opportunity to ask their most pressing questions regarding recent developments.
On Friday April 16, 2021 10:00AM UTC, Dusk Network’s project & tech lead Emanuele Francioni and business lead Jelle Pol joined the English Binance chat for an Ask-Me-Anything with 200.000 community members.
For those who were unable to attend the event, we've created a recap of the Binance AMA here.
For your convenience, we’ve gathered all questions and answers given during this event below. Minor edits were made for clarity.
Segment 1: Binance host questions
[Binance host] Hello chat and welcome to a special AMA with the DUSK Network team! It is my pleasure to introduce to you Emanuele Francioni, Dusk Network’s Project & Tech Lead, as well as Jelle Pol, Dusk Network’s Business Lead.
Hi Emanuele and Jelle, could you both please introduce yourselves to the chat, and Emanuele could you please also share a quick overview about Dusk Network?
[Emanuele Francioni] Hi everyone! It’s a pleasure to be here, and happy to take the time to answer any questions the Binance Community might have about Dusk Network. My name is Emanuele Francioni and I’m the founder and tech director of the company.
My career spans almost 20 years leading R&D teams in distributed computing, scalability and networking for aerospace, finance, and automotive industries. I founded successful startups and I am the co-author of several inventions and patents, among them a new consensus algorithm we use in the Dusk blockchain that solves the inefficiencies and lack of privacy of proof-of-work and proof-of-stake algorithms
[Jelle Pol] Hello! I’m Jelle Pol, founder and business director at Dusk Network. Together, Emanuele and I started Dusk Network almost 3 years ago. At that time we already noticed how important privacy was going to become in blockchain, especially when it touches upon mainstream adoption of financial applications. For that to happen, blockchain needs to comply with all of the legal requirements for security tokens and other financial use cases. And Dusk Network does just that! I’m very happy to be here to answer your questions.
[Emanuele Francioni] About the project, as Jelle already briefly mentioned, Dusk Network is an open source blockchain for financial applications.
Data protection and privacy-preservation play a major role in Dusk Network, as well as its design for regulatory compliance. The blockchain is eco-friendly, thanks to its privacy-preserving Proof-of-Stake consensus mechanism; a novel and efficient method of reaching agreement on the current state of the global ledger. Notably, the blockchain supports privacy-preserving and confidential smart contracts.
Companies can use the Dusk Network to power financial applications, issue tokens, trade and collaborate on a global scale.
[Binance host] Thank you both for that quick introduction! Chat, to learn more about Dusk Network, check out their links below. Follow them on Twitter for regular updates and join in on daily discussions via their Telegram channel.
Alright let’s jump right into the first segment of today’s AMA session. Our very first question for you Emanuele.
Q1: Can you tell us what are the main advantages of Dusk Network?
[Emanuele Francioni] Privacy is the focus of Dusk Network. Privacy is very important for large-scale adoption by the financial sector. Financial use cases like CBDC and Security Tokens need privacy smart contracts. Dusk Network supports privacy both in transactions and smart contracts, and is optimized for this use case.
[Binance host] Privacy is indeed important! Thank you Emanuele. The next question is for you Jelle.
Q2. What is Dusk Network’s target market?
[Jelle Pol] Good question, on it! Dusk Network bridges the gap between crypto and traditional finance. The target market is almost as big as the entire blockchain market. Real businesses want to adopt blockchain and create financial applications. To do this they will need the privacy that only Dusk brings. It is really a multi trillion dollar industry.
To give a good example: We created the first ever compliant security tokens called XSC and we will be using them with NPEX, the european digital stock exchange that we invested in back in 2020. This way we can make financial applications that can be used by institutions that operate under a license. This means that they need to work under the highest standards of regulations and security. We think bringing the benefits of DeFi together with the traditional industry is the future of the market. This is something we call Regulated Decentralize Finance - RegDeFi.
[Binance host] Thanks for sharing Jelle. Our next question is for you Emanuele.
Q3. What makes Dusk different from other blockchains like Ethereum?
[Emanuele Francioni] I get this a lot. Lemme try and summarize. In 2018 we already realised how important privacy would be for large companies to adopt blockchain. We were the very first one to design a privacy-compliant Security Token standard. And now all Security Token players are rushing to add confidentiality after ignoring it as a requirement due to the high complexity. However, it is very important to realize that privacy is something you have to design for. You cannot just patch it onto your blockchain. Even if somehow someone manages to, such a blockchain will become incredibly bloated, slow and super expensive to use.
Dusk Network is going to be the first privacy blockchain that is optimized to power privacy-friendly smart contracts, and is capable of hosting both confidential tokens AND Security Tokens, completely on-chain.
This would mean no Robinhood scenarios, no centralization of power, but instead an inclusive ecosystem that respects people’s financial positions
[Binance host] Amazing, we’re certainly looking forward to that! Q4 for Jelle.
Q4. I can imagine many parties showing interest in such a blockchain? Can you summarize some of your best partnerships to date?
[Jelle Pol] Yes of course, I'll try to highlight a few. First of all, we are happy with all of our partners of course. Last friday we held the first annual duskcon, which was a large conference that featured almost twenty talks, some of which were given by our partners. I think it's quite amazing to see the support we can give each other in the blockchain ecosystem. I already mentioned stock exchange NPEX, which has huge strategic potential for Dusk. The same goes for LTO Network and InvestorReady, a business accelerator that brings the benefits of Dusk Network to hundreds of companies for their entire lifetime.
More recently we announced we are collaborating with Harmony on the creation of Ultra Light Clients, which is a direct result of our team leading the space in zero knowledge technology. Ultra Light Clients will help to make blockchain accessible for all users around the world. You will also be seeing more of ANKR in the coming months, who are supporting our incentivized testnet. They will ensure that everybody who wants to run a Dusk node can easily do so. This helps people to earn rewards on the test net.
Finally, we have a new partnership coming up next week with a media partner that you haven't heard from us before that will be very big and useful.
[Binance host] Awesome so we need to look forward to next week. On to the last question for this segment! This one’s for you Emanuele.
Q5. Why are you going for an Incentivized TestNet? What can people expect?
[Emanuele Francioni] Yeah, it is a very exciting milestone right before our mainnet. We have a very good relationship with Elrond, our partner, and others. We asked them about it as they all did it and their advice was unanimously for Dusk to organize one too. Mainly for two reasons.
1) It is among the best live testing methods an engineer can ask for.
2) It is used to quickly gather a very large node-running community behind the project.
We are looking to expand the node running community significantly during this period, and test Dusk technology on core aspects. It is the perfect way to drastically shorten the time for releasing Mainnet while simultaneously gaining absolute confidence about our technology when we release it.
[Binance host] Thank you Emanuele and Jelle for sharing your answers with us.
Segment 2: Dusk’s multiple choice questions for the Binance Community
In this segment, the 200.000 Binance community members present in the English group got to test their knowledge of Dusk Network. Willing to give it a try? Answers can be found at the bottom!
Q1: What can you do with DUSK on the Binance Smart Chain today?
- Buy Dusk NFT art.
- Invest in digital assets.
- Trade and stake DUSK on PancakeSwap.
- All of the above.
Q2: Why did Dusk Network become a shareholder of Dutch Stock Exchange NPEX?
- For Dusk Network it is a strategic move; joining forces with NPEX perfectly fits the ambition to innovate the financial sector.
- Dusk Network can benefit from direct access to a stock exchange, its operating licence, and its institutional partners.
- There is a lot of potential to enrich the deal funnel and we can grow our user base.
- All of the above.
Q3: Why is the Dusk Network blockchain a perfect solution for financial applications?
- Because the network supports sharding and is capable of processing many transactions simultaneously.
- Because the network is purposefully designed to meet all regulatory requirements, such as instant settlement, transaction privacy, and auditability.
- Because the team has a lot of meaningful connections in the traditional financial market.
- Because the latest team survey showed that the Dusk team wants it the most.
Q4: At the first annual DuskCon event, the team announced their $5,000,000 Grants Program. What is (are) the main goal(s) of the Grant Program?
- Kickstarting the development of tooling and infrastructure.
- Funding new research that keeps the network future proof.
- Funding the development of high potential applications that increase the mainstream adoption of the Dusk Network.
- All of the above.
Q5: When can developers and projects apply for the Dusk Grants Program?
- Next week.
- June 1st, 2021.
- September 1st, 2021.
- April 1st, 2022.
Segment 3: Community Questions Answered
Q1. Many new projects make a good impression at first, but are suddenly abandoned. How can I be sure that DUSK will be around for the long term?
[Jelle Pol] I like this question a lot, it shows your diligence. I believe everybody is allowed to be very critical of everything that happens in the space, and we should all aim to hold each other to very high standards. To answer it to the best of my ability:
- Dusk started as an R&D project as early as 2017, we took our time to ensure that our idea was very well thought out, and did not rush into the bull market, this gave us a lot of trust with our investors and early community.
- We ended up raising our private sale in the end of 2018, which was a horrible bear market, we spent a lot of time flying around the world to make sure we had the best of the best strategic investors onboard to make Dusk a success. We wanted to raise a fair amount and are very happy with this route.
- Since Nov 2018 we have been diligently building and giving you updates every day, week, and month. You can check our website, blog, maillist and see hundreds of pieces of content with many being added every day. Despite market conditions we have been building every single day.
- Everybody in the team is known, we hide behind nothing and are doing things like this AMA regularly to continue to build trust.
- We have a very well thought out roadmap for the coming years, many milestones to be excited about, and enough capital to deliver all of these milestones and more.
Dusk is here to stay for the long run, we will continue our climb to the top projects, and hopefully this explanation gives you enough trust to join our incentivized testnet or other great initiatives.
Q2. There are many who believe that Blockchain will change the world. On the other hand, a new blockchain project is born every day. Too much is promised by projects and only a few of them actually execute. What does Dusk Network add to the blockchain ecosystem that is different from other projects to change the world?
[Emanuele Francioni] You are right that as of late there has been an explosion of new projects. However, for a project to have the best chances, you need groundbreaking technology, originality and a great business value proposition. Dusk has them all. It equips a novel consensus mechanism (SBA) that is among the first to implement privacy proof-of-stake, we developed the rust reference-implementation of the fastest zero-knowledge proof system at the moment (PLONK), and are the first to do privacy-friendly smart contracts. As for the originality part, we were the first to combine privacy with compliance. Business-wise we are the only project in crypto that OWNs shares in a regulated security exchange: NPEX
Q3. Nowadays, everyone is interested in their own benefits from many different projects but they rarely care about the benefits of the project for the user. So what benefits does the project bring to users? What are the plans for reaching new investors and new users in other countries?
[Jelle Pol] Great question. I think Dusk is actually one of the more user-oriented blockchain projects in the market right now. A lot of the challenges we are solving will make the financial sector a fairer and more efficient place. The middlemen that are in there today are the people that are managing your investments, pensions, etc. and basically you are paying for that.
By making the sector a better place it becomes cheaper and better for you, and by doing it on dusk network you also get direct access to manage your own security tokens, access regulated DeFi, etcetera.
You can do all of this without surrendering your own data to parties you do not want to give it to. We have a video coming out that explains all of this, make sure to check it out.
Q4. The goal of the DeFi app is to create a new financial system that eliminates subjectivity, bias, and inefficiency by relying on programmable terms. Does the DUSK network support this vision and how does it participate in the DEFI space?
[Emanuele Francioni] We absolutely support this vision. See, apart from our securitization plans, we also provide many projects with the privacy they need, especially in the DeFi space. Harmony and Elrond are good examples of that. With privacy, DeFi propositions can solve once and for all the problems that they face everyday, like frontrunning, which is responsible for the high gas fees that curb profits in all popular swaps. We are also working on our own suite of Confidential DeFi services. Stay tuned for more about this.
Q5. What is the new token standard that the Dusk Network is developing on its network that is different from the ERC-20 standard?
[Emanuele Francioni] We have been creating two main standards that apply to utility tokens and security tokens: the Confidential Token and the Confidential Security Contract (XSC) standards. Since we are among the few that provide confidential smart contracts, we created the Confidential Token standard to provide ERC20-like capabilities but with the additional benefit of privacy. The XSC standard is the first in the world that provides full compliance to security tokens, thanks also to the confidentiality as well as the auditability aspect. The latter makes it possible for security issuers and investors to operate securities directly on chain, saving hundreds of thousands of dollars in fees from the intermediation of security exchange, lawyers, compliance officers
Q6. Binance recently announced tokenized stocks such as COIN, TSLA, etc. Are Dusk and NPEX planning to do something similar with dawn and set up trading for tokenized shares or index funds for example?
[Jelle Pol] This is a great question! I want to make a few points here:
Firstly - yes the dusk ecosystem will support the trading of tokenized large cap stocks just as well as other sizes. You can think of all the examples that you just mentioned, FAANG shares, others.
Secondly, I think there is a huge segment next to the list of shares that is already listed on the nasdaqs of the world that is much more interesting. Private equity is basically the place where traditional finance makes their x100-10,000 returns. By the time a share is listed on the nasdaq much of this return has already been made. What tokenization on dusk brings is the ability for everyday investors to get access to these opportunities much sooner, so they can enjoy the ride towards the IPO's, etc.
Finally, the listing of tokenized stocks you mention are typically derivative products that basically mean someone in the world somewhere owns these shares and they are issuing you tokens, what we want to achieve is digitally native securities, i.e. so that the tokens are the actual securities themselves.
Q7. Do the token holders have the right to participate in the governance of the project? On what kind of decisions can they vote on about the project??
[Jelle Pol] Yes, we deploy programmable governance enabling the stakers to vote for protocol upgrades. Specifically, each time a user stakes DUSK, he/she is required to specify the protocol version he/she is running. If enough stakers specify the version above the currently recorded one, the protocol will be upgraded. Additionally, as we have announced not so long ago, we are researching and developing a DAO-like governance model, enabling DUSK holders to decide on the allocation of funds from the Development Fund.
Q8. Could you please tell me just a little more about the team and some of their backgrounds? I have personally seen many projects launch with inexperienced team members, and some of those didn’t go so well due to easily avoidable mistakes.
[Emanuele Francioni] The team at Dusk is nothing short than awesome! Apart from the 5 founders that cover Tech/Marketing/Finance/Business-Development/Infrastructure, we have among the brightest mind in cryptography (Dmitry Khovratovich, the inventor of Argon, Poseidon and ZCash mining hashing algorithms) is our lead cryptographer), virtualization (if you use Firefox, you use a lot of code that Matteo Ferretti, our lead VM architect, has been crafting when he used to work at Mozilla) and devops Fulvio Venturelli was in charge of the deployment system at Amazon back in the early 2000, and created the massive map infrastructure of TomTom and TeleAtlas). Everyone from our 20+ developers is incredibly clever. Apart from that we are assisted by amazing strategic advisors and many other who support our efforts on a daily basis.
Q9. Why does Dusk utilize two transaction models: Phoenix and Zedger?
[Jelle Pol] Good question! Simply put:
Phoenix is used for normal transactions such as utility tokens. It is a UTXO-based transaction model similar to bitcoin for example. What this means is that I can send you bitcoin without you needing to approve it.
For security tokens this does not work. Because they are regulated financial instruments they often come with all kinds of privileges and obligations, and you cannot simply send these from person A to person B, without person B agreeing to all the rights and obligations that come from ownership of a security token.
That is where Zedger comes in, basically it's the transaction model that is used when you transfer security tokens on top of the Dusk Network, and it ensures that both parties (sender AND receiver) agree to the trade and fully understand what is happening.
Q10. Can you list 1-3 killer features of Dusk network that makes it ahead of its competitors? What is the competitive advantage your platform has that you feel most confident about?
[Emanuele Francioni] 1. SBA, our consensus protocol, which is a permissionless Proof-of-Stake based protocol with statistical finality guarantees and a privacy-preserving leader extraction mechanism, enabling Dusk Network to preserve the preserve the privacy of block proposers, while simultaneously being permissionless and boasting a transactional finality of roughly 10 seconds.
2. Rusk VM, our virtual machine, which natively supports zero-knowledge friendly structures and zero-knowledge proof verification, enabling Dusk Network to host smart contracts with privacy baked in while preserving relatively affordable transaction fees in comparison to Ethereum.
3. Our transaction models: Phoenix, which enables users to spend non-obfuscated outputs confidentially, allowing us to have refundable gas fees common amongst smart contract platforms and Zedger, a hybrid transaction model which enables us to tokenize and manage the lifecycle of securities on-chain in a compliant manner.
MC answers segment 2
Answers from Q1 to Q5: 3-4-2-4-2
Dusk Network is the privacy blockchain for financial applications. Dusk Network envisions a financial industry that embraces innovation and provides equal opportunity for any organization to secure capital, trade assets, and access a full spectrum of financial services. Dusk Network executes on this vision by creating a global digital infrastructure, designed for regulatory compliance and auditability, that ensures that personal and transactional data remains confidential. Companies use the Dusk Network blockchain to issue tokens, trade and collaborate via smart contracts. Dusk Network recently became a shareholder of the Dutch Stock Exchange: NPEX.