1. What is Dusk Network?
Dusk Network is a privacy-oriented blockchain protocol, that anyone can use to create zero-knowledge dApps. By allowing Dusk Network to be openly accessible, Dusk Network aims to become the privacy infrastructure of choice for an entire ecosystem of solutions.
2. How did Dusk Network start?
In 2017, we conceived Dusk Network to solve blockchain’s unanswered challenges: scalability, privacy and compliance. During the inception of Dusk Network, it’s been our priority to create an ecosystem that is accessible by anyone, truly lowering the barrier to enter the financial industry, and replace intermediaries effectively with technology. We are creating a blockchain that will become the backbone of a fairer financial industry by allowing anyone to participate in the consensus, no matter their size. Where monopolistic power structures are disincentivised, forks are prevented, and trades are settled instantaneously.
3. How does Dusk Network work?
Dusk Network combines the versatility of smart contracts that can be found on Ethereum, the privacy of ZCash and a consensus algorithm developed in-house known as Segregated Byzantine Agreement to create a platform that supports transactions and privacy-oriented applications. An innovation that opens up entirely new use cases to millions of users.
4. Who is your target market/audience?
Rather than just a payment network, Dusk Network was created to provide a technological solution that is capable of much more. The first example is our Confidential Security Contract (XSC), that issuers of securities can use to provide their shareholders with secure and private security tokens, while enabling them to follow regulations set by governing bodies.
Due to the lengthy and expensive procedures of taking a company public, Dusk Network stands out as an efficient and inexpensive alternative.
We have the rather ambitious goal of becoming the privacy infrastructure of choice to revolutionize finance, governance and cyber-security industries. In order to achieve this, Dusk Network is made available completely open source, allowing all developers to contribute and build upon our work.
5. Which consensus mechanism do you use and could you explain why you chose this mechanism?
Currently, the two most used consensus algorithms face severe drawbacks. Proof of Work wastes a vast amount of energy and leads to miner centralization, Proof of Stake moves toward centralization with those having access to resources gaining further advantage. For these reasons, we deemed them both inappropriate for our purposes and created an alternative: Segregated Byzantine Agreement.
6. What is SBA★?
Segregated Byzantine Agreement improves upon Proof of Stake by combining existing ideas like cryptographic sortition (lottery), stealth time-locked transactions (hidden stake amounts) and a reputation module to increase the chances of selecting honest nodes and further promote decentralization.
The algorithm makes use of several types of nodes, both intensive and light in computational power to encourage participation in the network. This further increases the security of the network and promotes decentralization.
Using SBA, transaction finality can be achieved as soon as a new block reaches agreement so there is no real chance that an unintended fork happens. This also means no conflicts between parties for control of the chain.
For more details on SBA, please see our set of articles which go over the topic in depth.
7. What kind of Nodes does Dusk utilize?
Dusk Network is compromised of two types of nodes, block generators and provisioners.
Block generators are light in computation and serve to compete for block generation. Staking a minimal amount of Dusk ensures a fair chance to win the lottery, promoting decentralization. Due to it's non-intensive computational nature, it is intended that even normal mobile devices will be able to run a node on the network. The winning block generator node is rewarded with DUSK.
Provisioner nodes are more heavy in computation where they take on roles like block selection, reduction and agreement in order to keep the network running and preventing fraud. These nodes earn a steady supply of DUSK for their participation.
8. What are the requirements to run a node?
We plan to even enable mobile phones to run light nodes. We have also released a Dusk Browser Node extension for the Chrome Browser which will allow you to verify transactions while your browser is idle. You can find this in the Chrome web store. Nodes will be required to have some DUSK tokens, details will be solidified during the Testnet phase.
9. Will Dusk Network facilitate smart contracts?
One of the main features of Dusk Network is the provisioning of a (full privacy) smart contract layer that can be used to build applications to fulfill all sorts of needs for consumer and enterprise use cases.
We provide open source code enabling all users to not only create XSCs, the confidential security contract of Dusk Network, but extend and expand on the features if so required.
10. What is ECC (Elliptic Curve Cryptography)?
Elliptical curve cryptography is a public key encryption technique that generates more efficient, faster and smaller keys which are very easy to perform but very difficult to reverse engineer. This is why Bitcoin, Ethereum and many other cryptocurrencies use a curve known as secp256k1 to generate private and public keys.
Dusk Network protocol uses a Ristretto implementation which has Curve25519 defined over the Ristretto scalar field. Curve25519 is birationally equivalent to an ed25519, a Twisted Edwards curve. This allows Dusk Network to utilize the power of the Ristretto scalar field, while not indulging in the complex and bulletproof-unfriendly abstractions that are associated with Ristretto. In other words, allows us to safely extend to zero-knowledge protocols in order to achieve privacy.
11. How is privacy achieved?
Dusk Network combines the use of stealth addresses (a random address created for each transaction), blind bidding (staking amounts hidden), bulletproof transactions (a type of zero knowledge proof to reduce transaction sizes), and more to ensure that privacy remains at the forefront of our priorities.
12. What are ZK-snarks and how do they work?
The core principle behind privacy is how to prove the validity of a statement without revealing information about the statement. This is where Zero-Knowledge cryptography comes into play.
In the case of Dusk Network, Zero-Knowledge, specifically bulletproofs, are used to provide privacy in the transaction but allow the transactor to validate the transaction against the set of smart contract rules written to Dusk Network's XSC to everyone on the network.
For more details on the use of Zero-Knowledge Cryptography, please read our set of articles that take a deeper dive into our technology.
Part 1, Part 2 and Part 3
13. What about network fees?
DUSK is used to pay transaction and gas fees in order to initiate transactions of both DUSK and XSC based tokens, atomic swaps (smart contract technology to exchange tokens trustlessly), as well as deploying a smart contract.
DUSK will also be used for voting on Dusk Enhancement Recommendations and on-chain governance in the future.
14. What are the benefits of using Dusk/why would somebody develop on Dusk?
Dusk Network is open source, meaning anyone can use it and even extend it with new features. The standards created by Dusk Network can be leveraged by third parties who wish to automate processes through the Dusk Network blockchain that would otherwise require the involvement of middlemen, which quickly increases costs.
Dusk Network was also built from the ground up in order to satisfy the strict requirements of regulators in both privacy and auditability. This means you can be sure that your security token offering will meet the standards required by governing bodies.
15. What are the incentives to participate in the Dusk Network?
Nodes are able to stake DUSK to become eligible to participate in the consensus. In exchange for assisting in the running and securing of the network, participants that were part of the block formation are automatically rewarded with DUSK tokens upon finalization of a block in proportion to the amount staked.
The greater the balance, the better the chance to be selected for block generation.
16. Why do you think you can build a better protocol than ETH when they have a ton of institutional partnerships?
Ethereum, was an absolute game changer in the industry. However, it is sadly limited by the lack of ledger privacy aside from off-chain solutions which comes with many drawbacks including being very expensive, slower in performance, limits automation and also strays away from the concept of decentralization. This limits scalability of any dApp or STO that requires privacy to leverage the potential of blockchain. At the same time, any on-chain privacy modules created for Ethereum are limited in functionality, incredibly inefficient and expensive to run. Third party platforms like Polymath and Habor, which in turn, have no control at the protocol level, must conform to the development schedules of their parent platform.
This is not the case for Dusk Network which is purpose-built for this specific use-case.
17. What is the potential user base and market opportunity?
As Dusk Network serves as a privacy ecosystem, its use is available for all who are concerned with privacy. As a whole suite of applications can be developed on the platform to take advantage of the zero knowledge technology, privacy and ownership of data will be returned to the people it belongs to. Users are able to take advantage of the ability of being able to verify their identity without exposing sensitive information to the network.
This makes Dusk Network perfect for the security token ecosystem use case. Businesses that are interested in security token issuance and management to open up liquidity and financing, will eventually make up part of Dusk Network's user base, of which, just by capturing a small percentage will propel the security token ecosystem to become a multi-trillion dollar market. But the use cases of the network extends much further than that, think social networks where fake accounts run amok, governments and their elections that require ID verification and privacy, not to mention the broader financial market.
18. How will Dusk comply with regulators?
Dusk Network is an open source platform that can be used by companies and developers to create new businesses, or migrate existing business processes. These new businesses can automate their compliance on-chain, by using various tools. Businesses can use whitelists, that are part of the open standard, to make sure only accepted participants can acquire their (security) token. And perform certain compliance and auditability related actions to give insights into (only) their token holders transaction details.
19. Why did Dusk choose to build a privacy-oriented blockchain?
Privacy is all about context. In the context of security tokens its paramount that trades are market neutral, and do not affect the wider market. Furthermore, by offering privacy business can adhere to data protection regulations.
Having all transactions in the open also opens up the ability for market manipulation (think people monitoring large wallets for transactions), as well as breaking confidentiality agreements that are part of the arrangements made by institutional parties, deterring them from using the blockchain for such purposes.
20. Last year there was an update that the EU would ban private coins, any updates?
We stay well informed on ongoing developments as the released implementation details of the FATF are a concern to the wider blockchain community. However, at present time this does not seem to impact Dusk Network's vision for a fully global and open privacy-oriented blockchain economy.
Security Token Offerings
21. How do companies start an STO using Dusk technology?
Tech savvy companies can use the open-source standards, such as XSC, to automate the processes required for security token issuance. There are specialist service providers, such as legal and consultancy boutiques, security token platforms, and more that could help set it up for business that lack the technical know-how. By being an open-standard, anyone can use it, which is part of our strategy to quickly scale the usage of the network.
22. Will STOs have to pay a fee?
Similar to Ethereum, issuers will pay for the features on Dusk Network directly through gas fees and smart contract deployment fees. In order to perform corporate governance such as voting, DUSK is also charged as a gas fee. Dusk Network itself is open source for developers to make use of and does not in any way require steep fees to access it.
23. What are the specifications of the XSC-token contract?
Our confidential smart contract was developed in order to serve as a security token issuance, trading and management mechanism. As such, it will allow the functionality of controlling the supply of tokens, token ownership, whitelists, transfers and dividends of the securities under its governance. It will also offer extra functions such as on-chain governance mechanism, voting, alerts and messaging, view only permissions and buyback options.
Read more on XSC here.
24. How much money has been raised?
During the private sale we sold 50% of the total token supply for $8,075,557 dollar. Thanks to our early private sale participants, Dusk Network has a multi-year funding runway.
25. What is the total supply?
500,000,000 DUSK tokens
26. What is the circulating supply?
As all tokens are subjected to our second by second vesting contract, please see our vested schedule for an approximated figure amount.
27. What was the initial token price?
During the private sale tokens were offered at $0.0404. Same price for everyone.
28. Is there a vesting period?
Yes, private sale participants are subject to a second by second vesting contract which unlocks their tokens in real time over the course of 5 months.
The wallets in control of the team, such as the marketing, technical development fund, and more are subject to multi-year vesting.
29. How does the SBS vesting contract work?
The smart contract will vest allocations second by second. What this means in practice is that, at any point a token investor wanted to release their tokens, they can make a call on the smart contract and then will have access to the total number of tokens that will have vested at that second. For example. After the lockup, tokens will be vested over (365 days x 24 hours x 60 minutes x 60 seconds) 31,536,000 seconds. If someone wanted their tokens at the 1,234 second of the 12 month period, and they had purchased 31,536,000 tokens, they would receive 1,234 tokens at that point. If they did it at 6 months, they would receive half. If they did it at 1 day, 10 days, 57 days, and then every 3 weeks; they would receive the relevant whole tokens (rounded down) at each specific second.
30. Where can I buy DUSK?
Dusk Network is listed by leading cryptocurrency exchanges. You can find more details on www.coinmarketcap.com.
31. Privacy and anonymity while complying with regulations sound contradicting, could you elaborate?
Rather than contradictory, privacy and regulations often times go hand in hand. Governing bodies require that personally identifiable information (PII) be protected from malicious actors through legislation like the GDPR.
While Dusk Network focuses on privacy in order to protect PII and prevent manipulation, it also enables the possibility of audits to be done by regulators through the introduction of read only keys, which allows auditors to see the transactions (of the wallets of which the user has given them the view-key), but not touch the assets stored inside.
32. What is the business model of Dusk Network?
Dusk Network is intended as a protocol layer, that due to its decentralized nature can be used as infrastructure by anyone. This means that Dusk’s business goal is self-sustainability. We have a funding runway of multiple years and in parallel we expect the self-funding mechanism to be ready within a year. Within that year we will build out traction to support development going forward, which over time will likely increasingly decentralize via community governance and enhancement proposals.
Having stated all of the above it is prudent to say that the infrastructure is extremely well suited for commercial enterprises to be deployed on top of. When looking at only the immediate security token use case the value is apparent, not only can propositions deploy their security token (offering) on top of the network, but this adoption will lead to a suite of ‘pick and shovel’ applications to be built for this ecosystem. Applications for corporate actions, life-cycle management, or zero-knowledge authentication spring to mind immediately.
33. When will you launch mainnet?
Given that we are constantly pushing the boundaries of current technology in several fields, we run into unexpected hurdles all the time. Although the roadmap items are merely estimations, we do indeed strive our best to achieve the given targets and timelines. Thus, at the moment we can say we are definitely on target for a Q4 mainnet launch.
34. What are you working on right now?
We're always working! For a general idea, take a look at our medium and roadmap which we endeavor to update as often as there are updates.
35. Will you run a bounty program?
There is no intention at moment, however we are open to suggestions. We do intend to run a marketing campaign related to the Dusk Browser Nodes.
36. How does Dusk deal with scaling?
Dusk Network is highly-scalable and permissionless. Users can join the open network and submit a bid to become a block generator or provisioner. Due to the way the consensus committee is formed each round, randomly and independently of earlier participants in the consensus algorithm, any scaling issues that arise with other Proof-of-Stake versions are eliminated.