Hedger: Confidential Transactions on DuskEVM

As Dusk evolves into a modular architecture, it introduces Hedger, a new privacy engine purpose-built for the EVM execution layer.

Hedger brings confidential transactions to DuskEVM using a novel combination of homomorphic encryption and zero‑knowledge proofs, enabling compliance‑ready privacy for real‑world financial applications. 

Unlike Zedger, which was built for UTXO‑based layers, Hedger is built for full EVM compatibility. It integrates directly with standard Ethereum tooling, making it scalable, auditable, and easy to adopt from day one.

Cryptographic Design

Most DeFi privacy systems rely solely on zero-knowledge proofs. Hedger takes a different approach. It combines multiple cryptographic techniques to balance privacy, performance, and compliance:

• Homomorphic Encryption (HE): Based on ElGamal over ECC, it enables computation on encrypted values without revealing them.
• Zero-Knowledge Proofs (ZKPs): Prove correctness of computations without disclosing the underlying inputs.
• Hybrid UTXO/Account Model: Supports cross-layer composability and seamless integration with real-world financial systems.

This layered cryptographic design allows Hedger to support regulated securities with confidentiality and auditability at its foundation.

Key Capabilities

Hedger unlocks a set of features purpose-built for regulated markets:

• Support For Obfuscated Order Books: Hedger lays the ground for the upcoming deployment of obfuscated order books,, a critical feature for institutional trading that prevents market manipulation and protects participants from revealing intent or exposure.
• Regulated Auditability: Transactions are fully auditable by design, ensuring compliance when required.
• Confidential Asset Ownership & Transfers: Holdings, amounts, and balances remain fully encrypted end-to-end, preserving privacy while ensuring transactions stay auditable.
• Fast In-Browser Proving: Lightweight circuits allow client-side proof generation in under 2 seconds, enabling a seamless user experience at scale.

These features make Hedger a core pillar of DuskEVM, bridging institutional privacy with real-world usability.

Strategic Value

Hedger is a first-of-its-kind privacy engine that doesn’t trade off compliance, performance, or usability.

While the EVM’s account‑based model prevents full anonymity - a capability Zedger still offers - Hedger nonetheless delivers complete transactional privacy, providing seamless compatibility with the wider tooling ecosystem and significant gains in performance and architectural simplicity for DuskEVM.

Developed in-house, Hedger combines years of applied cryptography research with practical performance, regulatory alignment, and developer accessibility.

It’s a foundational component enabling real-world financial applications to operate privately, compliantly, and at scale.