The long-term development of blockchain finance has been plagued by a paradox: either transactions are completely transparent, causing institutions to stay away, or they are immersed in anonymity, leaving no room for regulation. The existence of this divide has made it difficult for many promising technological solutions to be implemented smoothly.

As early as 2018, some people recognized the essence of this problem — the real financial world does not choose absolute transparency or complete concealment. What it needs is a capability: to hide when necessary and reveal when appropriate, finding a balance between the two extremes. This is precisely the bridge that needs to be built between traditional financial systems and decentralized applications.

From an architectural perspective, modular design is the key to the solution. Breaking down different functions into independent components — compliance modules, privacy components, auditing tools, etc. — allows users to assemble them as needed. This approach is especially attractive to teams planning to issue security tokens or build compliant DeFi platforms, because it enables projects to maintain on-chain advantages without sacrificing the legal validity of the real world.

Even more clever is that zero-knowledge proof technology has been ingeniously transformed into a compliance tool. Transaction details can be kept confidential, but as long as regulators or auditors have the corresponding keys, they can fully verify the legality of the transactions — this is true "selective disclosure," neither a black box operation nor an escape route, but a language that institutional investors can understand and accept.

Currently, the RWA tokenization wave is surging, with many blockchain platforms focusing on asset access but ignoring compliance frameworks. This bottom-up approach to considering compliance is the correct posture to truly prepare for bringing real assets onto the chain.