To truly bring real-world finance onto the chain, privacy issues cannot be avoided. Recently, I came across a concept that uses homomorphic encryption combined with zero-knowledge proofs. By default, transaction amounts, account balances, and ownership statuses are encrypted and stored, but when auditors or regulators need them, quick verifiable proofs can be generated. In simple terms, it’s about giving privacy a "switch"—only turning it on in front of the right people.

This solution is built on an EVM-compatible environment, allowing developers to continue using Solidity and existing tools without relearning a new set. This is very important for institutions—they need to protect their trading strategies from exposure while also meeting compliance requirements.

What practical applications can this enable? For example, encrypted order books so market participants cannot see who wants to buy or sell (preventing front-running); confidentiality of ownership information during transfers; verification processes that can be completed on the client side in seconds, providing a good user experience. This isn’t about achieving complete anonymity but rather privacy that is auditable and controllable—privacy acceptable to institutions.

It’s especially meaningful for tokenized securities and RWA scenarios. Banks and funds want to hide their investment strategies while proving compliance—these two needs were hard to satisfy simultaneously before. Now, turning privacy into a controllable and auditable feature makes large-scale on-chain finance pilot projects feasible. If you’re considering large-scale on-chain financial applications, this privacy engineering approach is worth paying attention to.