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Dusk Network (DUSK)
A Blockchain Platform For Programmable And Confidential Securities.
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Dusk Network brands itself as a privacy blockchain for financial applications. It is a layer-1 blockchain that powers the Confidential Security Contract (XSC) standard, and supports confidential smart contracts. Dusk Network aims to address the requirements and needs of financial markets. Central to its design are thus a scalable public infrastructure, directsettlement finality of transactions, and strict data privacy.
Through the use of a novel transactional model called Phoenix, Dusk Network focuses to bring privacy and anonymity to transactions, as well as smart-contracts. Additionally, tokens deployed on Dusk Network can build on top of Zedger, a hybrid privacy-preserving model based on Phoenix, developed specifically for security tokens.
The ‘Segregated Byzantine Agreement’ (SBA) consensus mechanism secures the network. According to the team from Dusk Network, SBA is an improvement over the underlying Proof-of-Stake (PoS) mechanism as it combines 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".
DUSK tokens can be used as a utility token to initiate transactions, atomic swaps or deploy smart contracts. DUSK can also be staked to participate in consensus and serves as a means of exchanging DUSK-denominated value. In the future, the team intends to expand the use-cases of DUSK by adding it to an on-chain governance system.
1. What is Dusk Network (DUSK)?
Dusk Network is a privacy-oriented blockchain protocol featuring Segregated Byzantine Agreement to provide privacy, programmability, and contract auditability.
Dusk is built by a team of entrepreneurs, engineers and researchers with technical experience at Amazon, TomTom, Mozilla, Reaktor, and blockchain backgrounds (Zcash, City of Zion, NEO Research, etc).
Dusk Network is currently in testnet phase and aims to be a blockchain protocol designed for easy deployment of programmable Zero Knowledge dApps, thus becoming the backbone of an open, permissionless and global privacy-oriented dApp ecosystem.
The Project aims to remove technical barriers that have hindered mainstream issuance and trading of products such as security tokens. Compliance, auditability and privacy are built into the open, permissionless Confidential Security Token Standard ("XSC").
Some of its key elements include:
Raised ~$8.08MM via private token sales from August to November 2018.
Private Proof-of-Stake implementation which enables Block Generators to stake anonymously.
Utilizes ZeroCaf to achieve fast, efficient and Bulletproof-friendly Elliptic Curve operations.
Built by a team of entrepreneurs, engineers, and researchers from a wide variety of backgrounds (Amazon, TomTom, Mozilla, ZCash, City of Zion, Neo Research, etc.).
At its core, it features:
Dusk Network aims to achieve on-chain privacy and programmability while maintaining high-throughput and instant transaction finality. Dusk Network is built upon these key innovations:
Some of its key features include:
Private-Proof-of-Stake: Dusk Network's consensus protocol, Segregated Byzantine Agreement ("SBA"), is powered by "Proof of Blind Bid" that enables Block Generators to stake anonymously.
Decentralization: by disincentivizing resource centralization from staking pools, smaller participants are encouraged to partake in the consensus.
Replaceability: consensus participants are chosen pseudo-randomly and independent of earlier outcomes.
To do so, Dusk relies on a few core characteristics:
Consensus in three phases: Block Generation, Block Reduction and Block Agreement.
ZeroCaf for fast, efficient and Bulletproof-friendly Elliptic Curve operations. ZeroCaf is an Elliptic Curve developed on the Ristretto scalar field.
Implementation of Poseidon, a Zero-Knowledge friendly hashing algorithm.
Browser Nodes for Zero-Knowledge verification and Zero-Knowledge Virtual Machine architecture.
Instant Transaction Finality: Due to the properties of the Dusk Network consensus protocol transactions are final immediately after the completion of a block, aside from a negligible probability of a fork.
1.2 Mission and value proposition
By allowing Dusk to be openly accessible, Dusk Networks's mission is to become "the privacy infrastructure of choice for an entire ecosystem of solutions, whether in finance, governance, cybersecurity, or something completely new".
With a combination of privacy and compliance, Dusk is designed for the financial industry use, and as such, Dusk's adoption strategy focuses on the security token market, which is in need of a purpose-built blockchain.
Its core value business proposition is centered arounnd:
Privacy: Dusk Network provides speed and full user privacy, while enabling decentralized application issuers and third-parties to create meaningful Zero Knowledge proofs to fulfill checks and balances, and audit & reporting requirements.
Permissionless: anybody can join the network as a consensus participant without a need for approval from a central entity.
Public: users do not need approval of a trusted authority to use the Dusk Network blockchain. The Dusk Network blockchain also requires minimal processing power and modest IT resources to join. All users who possess the DUSK token can participate in the consensus.
Compliance: through zero-Knowledge proofs, companies and projects are able to create real world applications that can adhere to strict compliance requirements whilst still offering data privacy. This increases the ability to perform business processes on-chain, leading to significant cost reduction.
Dusk Network uses zero-knowledge cryptography to allow network participants to prove the correct outcome of a wide range of operations (i.e., transacting a lawful amount of tokens, participate to a blind bidding auction, prove right-to-access to a service, etc) without revealing identities or any transaction details while provide proof of correct computation in a trustless manner. The browser nodes are used to provide these different types of verification.
Dusk nodes compete in the block selection process by anonymously committing (i.e., staking) an undisclosed amount of Dusk tokens and thus prove compliance to the process by generating a Zero Knowledge proof of such transaction. By delegating to the browser the workload of verifying (or even generate) Zero Knowledge proofs, they can leverage game theoretic principles to let the community help with the computation power required to verify Zero Knowledge proofs multiple times and bring Dusk Network one step closer to a fully browser based blockchain experience.
1.3 DUSK token overview and use-cases
The DUSK token is used to stake and participate in the consensus.
In addition, the DUSK token is used to pay for transactions, deploying dApps, and as gas. The token also serves as rewards for the consensus participants.
DUSK can be traded for XSC-based tokens, both one-way and through atomic swaps.
The DUSK token will be used for on-chain governance within XSC once it is released.
In Dusk Network, block rewards are paid through an emission of DUSK defined in the protocol. The majority of all newly issued DUSK will be rewarded to consensus participants, while a minor portion will go to a technical development fund, creating an autonomous funding mechanism for the long term research and development.
2. Key products and features
2.1 Segregated Byzantine Agreement
The roles in the protocol are split between two different node types: Block Generators and Provisioners.
Block Generators compete in a recurring lottery for the right to submit block candidates, while Provisioners run consensus over the selection of the lottery winners and acceptance of their proposed block.
In order to become Block Generators, full nodes submit a confidential transaction called Blind Bid. Provisioners, instead, are required to stake their DUSK publicly, while participating in the consensus.
2.2 A unique consensus mechanism
Blind Bid Phase
During the Blind Bid phase, aspiring Block Generators stake an amount of DUSK for the right to participate in the block generation lottery. The stake transaction is called a Blind Bid, because the amount of DUSK staked and the identity of the Block Generator are kept confidential. The Blind Bid also carries a secret number 'k' chosen arbitrarily by the Block Generator. This way she can claim ownership of her own transaction at any time, despite its confidentiality and without disclosing her identity. All valid Blind Bids are kept in a Merkle Tree saved on the blockchain.
Consensus Phase - Block Generation and Selection
During each round, Block Generators use their Blind Bid to run a non-interactive lottery and obtain a score.
The amount of DUSK in the Blind Bid positively affects this score.
Thus, Block Generators anonymously transmit their proposed block to the Provisioners alongside the obtained score and the Zero Knowledge proof of Blind Bid; therefore proving knowledge of the embedded secret 'k' and the correctness of the score computation. Due to the reliance upon Zero Knowledge proof of correctness, proof of Blind Bid provides a significantly higher level of security if compared to public Proof-of-Stake systems while showing an equal resilience to Sybil attacks.
A committee of Provisioners validates all submissions and select the candidate block with the highest score.
Consensus Phase - Block Reduction
After the Selection phase, a small committee of Provisioners perform Block Reduction: a two step routine to gather Provisioners' signatures and assure convergence over a single block. If more signatures than a threshold of 75% of committee participants are collected, the candidate block is then established. The committee chosen for Block Reduction is always a small subset of the entire provisioner population, deterministically extracted through a non-interactive algorithm called "deterministic sortition". The non-interactive deterministic extraction algorithm additionally enables every node in the network to calculate who is in the committee from public parameters. This can be used to single out compromised participating Provisioners and decrease their reputation.
Consensus Phase - Block Agreement
The Block Agreement is an additional phase designed to guarantee immediate finality to the selected block and provide protection against the "timeout fork" attack. During this phase, an additional committee gathers and verifies the signatures collected at the Reduction phase. This phase provides a statistical guarantee that at least one honest node has received a set of votes exceeding the minimum threshold required to successfully terminate the respective phase of the protocol.
If the candidate block does not reach sufficient signatures, or agreement votes, the candidate block is omitted from the pool of candidate blocks and the process loops back to the selection stage. This time another candidate block with the highest score is selected and the process repeats until a favorable outcome is reached.
3. Economics and supply
3.1 Key metrics
ERC-20 and BEP-2
Private Sale Allocation (inc. BEP-2 issuance)
250,000,000 (50% of supply)
Private Sale Date
Aug to Nov 2018
Private Sale Price
Amount Raised in Private Sale
3.2 Token supply distribution
Private Sale (including BEP-2 issuance) comprise 50% of total supply. Dusk Network's private sale was conducted from August 2018 until November 2018 for 0.0404 USD per DUSK, raising ETH at a price of 176.45 USD / ETH, selling 200,000,000 DUSK and raising a total of 8,075,557 USD. A final 50,000,000 DUSK was reserved to offer to the Binance community via BEP-2.
Partnerships tokens comprise 11.81% of total supply.
Technical Development Fund comprise 18.06% of total supply.
Marketing & Events tokens comprise 7.29% of total supply.
Team tokens comprise 6.42% of total supply.
Advisors tokens comprise 6.42% of total supply.
DUSK token allocation (%)
3.3 Token governance and use of funds
As of July 2019, Dusk Network has used approximately 17.6% of TGE funds according to the allocations below:
11% Marketing & PR.
18% Business Development.
9% Legal & Audit.
Dusk Network holds funds primarily in fiat bank accounts to fund operational costs. Any crypto holdings are kept in cold storage via multi-signature wallets.
The following chart represents the number and breakdown of all DUSK tokens that are to be released into circulation on a monthly basis.
Release of Voucher Seeder, Block Explorer, and Alternative Transactional Model.
Release of Zero Knowledge Virtual Machine Architecture.
Deployment of Confidential Security Digitization.
Q4 2019: Public Launch
Release of Zero knowledge Virtual Machine integration.
Release of GUI wallet.
Release of Regulator API.
Q4 2019: Adoption
Integration with Security Trading Venues.
Issuance on XSC.
Implement space efficiency - block compression.
Q1 2020: Scale
Research Horizontal Scalability - Network partitioning.
Implement P2P ZK channel engine.
4.3 Commercial partnerships and business development progress
Co-developed the requirements for the XSC standard with legal and commercial partners that want to adopt the mainnet to issue and manage security tokens.
Business relationships with cryptocurrency ecosystem providers for further usability towards mainnet. (e.g., exchanges, staking websites, hardware integrations)
Onboarded advisory board with strong Finance & Web backgrounds (such as Gary Quin (BlackRock / CreditSuisse) and Patrick de Laive (TNW / TheNextWeb).
Expand protocol usage into both primary and secondary security token market, capturing deal flow for tokenized asset issuance, management, and trading.
CipherBlade: CipherBlade is a cybersecurity firm that deals with on-chain analytics and secure company infrastructure. CipherBlade advises Dusk on their digital infrastructure and key security considerations for tech design.
BlockVenture Coalition: BlockVenture Coalition is the world's largest blockchain university network. The BVC allows for Dusk to effectively tap into the cutting edge blockchain research coming out of the university scene. Dusk's partnership with the BVC will allow for the exploration of a PhD program, expansion of strategic hiring, and referral of top developers to the Dusk ecosystem.
Watson Law: Watson Law is a blockchain legal studio. Dusk and Watson have created legal frameworks for security token issuance and trading. Watson also is featured as a crucial design partner for creating Dusk's compliance frameworks. Characteristics like fork resistance, settlement finality, and digital signatures were defined and developed together.
The Reserve: The Reserve is a boutique investment bank and strategy consulting firm specialized in structuring the financing of emerging technologies. The Reserve is leveraging Dusk for the tokenization of securities and to facilitate private and compliant asset issuance and trading.
5. Project team
Project and Tech Lead
Former Executive Director at Web 3 Ventures, Founder of GoSparc BV and Beestar, R&D lead at TomTom.
Project and Business Lead
Co-founder of Informance Group, former Blockchain projects manager at Shell.
Lead Researcher & DevOps
Former Executive Director at Web 3 Ventures, Tech Advisor at UNL, co-founder of Beestar.
Marketing & Operations
Co-founder of Informance Capital and Informance Consulting, former Project Consultant at Rabobank, MsC Business Economics.
Process & Finance
Co-founder of Informance Consulting, former Project Manager at PostNL and consultant at ABN AMRO.
Communication & Operations
Former Business and Marketing at Web 3 Ventures, Innovation Coach at 2SQRS.
VM Researcher and XSC Author. Former NEO Research, City of Zion.
PhD in Computer Science, Founder and Security Lead of ABDK, co-creator of equihash (Zcash), Argon2, Guru and Poseidon.
Lead VM Architect
Former Software Engineer at Mozilla, TomTom, and Reaktor.
Former Engineer at NEO Research and City of Zion, focusing on Bulletproofs and arithmetic circuits.
Jules de Smit
Former Freelance Dev and Lead Solidity Engineer at Terawatt.
Senior Full-Stack Developer
Former Full-Stack Developer at durdn.com, Senior Developer Advocate at Atlassian.
Carlos Perez Baro
Former Rust Core Dev at Caelum Labs, Full Stack Dev at Atos.
Fomer C++ Dev at RDF and Concurrent Systems, Web Dev at Shippit.
Fomer C++ Dev at RDF and Concurrent Systems, Web Dev at Shippit.
6. Dusk Network's activity and community overview
6.1 Development activity
Dusk Network has a total of 6 public repos (c.f. below charts) and 13 additional private repositories. Other public repositories are migrations from private repositories, where the main development activities take place. Since the testnet release, all of Dusk's private repositories are gradually moved to the public domain, where everyone can inspect and make use of the code. Additionally, Dusk will use selected repositories to start accepting community developer input.
4.2 On-chain activity
4.3 Social and community data
Dusk Network aims to build the developer and end user communities by providing the proper documentation on code, academic research papers, package managers, tools and campaigns to drive adoption of the chain.
The core adoption strategy is based on three pillars:
Technology focus: Dusk Network is driven by innovations in various fields, most notably Zero Knowledge. Dusk Network provides speed and full user privacy, while enabling decentralized application issuers and third-parties to create meaningful Zero Knowledge proofs to fulfill checks and balances, and audit & reporting requirements. An innovation that opens up entirely new use cases to millions of users.
Community/developer enablement: Dusk Network promotes various initiatives and technology driven campaigns on the subject of Zero Knowledge cryptography. Technical team members are regular speakers on the topic of Zero Knowledge, and the project also interacts with users online. Examples are live coding sessions, and research walkthroughs of recent releases on live streaming platforms such as Twitch. On the end user side, Dusk sees their strongest communities in the EMEA and APAC regions. They organize meetups and online events to interact on business use cases and protocol adoption. Increased engagement is planned for the regions, starting with an EMEA meetups. Together with their marketing advisors they are planning a large European conference where Dusk plays a central role.
Paving the way: Dusk Network's business team is paving the way for security token issuance and trading using its XSC smart contract standard by integrating with multiple security token venues to offer XSC as their standard of choice. This community is more B2B oriented and focuses on physical presence. Dusk organizes events in the EMEA region to capture and guide promising traction.
To date, the developer enablement programs have released multiple research documents and code documentation including a ZeroCaf Package, with additional SDKs forthcoming to promote a seamless developer experience both for current blockchain developers and cryptographers.
Finally, a combination of traditional media outlets is utilized, such as Twitter, Telegram, LinkedIn, monthly newsletters and blogs. These media are used to build general awareness around protocol development and provide key updates to the community. New channels are always added, such as Discord in Q2 2019.