Centralized financial systems rely on multiple intermediaries, resulting in low efficiency and high costs. This long-standing issue has persisted for a long time. With the emergence of blockchain, the features of decentralization and transparency have offered hope, but they also bring new challenges: complete transparency means all transaction details and participant information are exposed, which is a nightmare for financial institutions that need to protect trade secrets.

On one hand, transparency is required; on the other hand, privacy is essential—this contradiction is the main reason many large institutions are hesitant to adopt blockchain at scale. A team has keenly identified this pain point. Instead of patching existing blockchains, they have redesigned the underlying architecture from scratch.

Their solution centers on using cryptographic tools like zero-knowledge proofs to achieve a clever state: **Data on-chain, but invisible to you**. How is this done? Through confidential smart contracts, sensitive information such as counterparty details, specific amounts, and contract terms remain encrypted during execution, visible only to the involved parties. Meanwhile, the system automatically generates cryptographic proofs, allowing regulators and auditors to verify whether transactions comply with anti-money laundering regulations and securities laws—without accessing the original data.

This effectively breaks an impossible choice. Financial institutions can now protect trade secrets while leveraging blockchain for cross-border settlements, asset tokenization, and automated derivatives trading—improving efficiency and reducing costs. Privacy and compliance have shifted from being opposites to being complementary.