We are excited to announce the release of the Phoenix 2.0 specifications. Phoenix 2.0 represents a significant evolution in Dusk’s privacy-preserving transaction model, introducing key updates aimed at improving functionality as well as maintaining compliance with institutional requirements.

As a privacy-preserving protocol, Phoenix 2.0 upholds the confidentiality of transaction data while enabling important functionality typically not found in anonymity-based protocols. While most protocols prioritize anonymity, leading to the sender not being known to the receiver, Phoenix 2.0 enables privacy without sacrificing the ability to provably identify the sender of a transaction to the receiver. This is a critical feature for regulatory compliance and institutional use cases.

Key Updates in Phoenix 2.0

The latest version brings important changes compared to Phoenix 1.0:

• Phoenix 2.0 simplifies how DUSK tokens are sent to smart contracts. This makes it easier for developers to handle the native token in their contracts, between contracts and for users to send it to contracts.
• Phoenix 2.0 modifies the transaction data to allow receivers to identify the sender of a transaction. This feature not only makes privacy-preserving interactions possible between users, but it also helps in complying to stricter security regulations (e.g. TRS-22), by introducing both certainty of tx origin and encryption of personal data. 
• Phoenix 2.0 enables recipients to refund the originator of a transaction by sending assets back without breaking confidentiality requirements. This is an industry first that eliminates all AML risks for the recipients.

Why Phoenix 2.0 Matters

Phoenix 2.0 stands out from traditional privacy protocols by offering controlled privacy, where transaction details remain hidden from the public, but sender and receiver details are accessible when required by the transacting parties. This is a crucial feature for organizations operating in regulated environments, where compliance with legal and financial oversight is mandatory.

This updated model makes Phoenix 2.0 an ideal solution for institutional transactions that require a fine balance between privacy and transparency.

You can find the Phoenix 2.0 specifications here.