#dusk $DUSK
There are two main standards for tokenized securities right now and comparing them tells you more about the design philosophy behind each one than anything else does.
ERC-3643, also called T-REX, is the Ethereum approach. It is built on a transparent chain, so all token transfers are visible by default. The compliance layer sits on top as a wrapper contract. That contract checks whether a transfer is allowed before letting it through, using an identity system called ONCHAINID where investors register their credentials on-chain. The compliance rules and the identity links are inspectable by anyone who looks.
XSC, Dusk's Confidential Security Contract standard, starts from the opposite premise. The chain is private by default. Transaction amounts and holder identities are not exposed. Compliance is not enforced by a visible rule that anyone can inspect. Instead, a transfer proves with a zero-knowledge proof that the rules were followed, what the rules checked or who the parties are.
The comparison is not really about which has better rules. It is about what "compliance" means architecturally. ERC-3643 complies by letting auditors and regulators inspect the chain and see everything. XSC complies by proving mathematically that the rules were followed, without exposing the underlying data.
Both approaches have honest tradeoffs. The ERC-3643 model is familiar to regulators who are # records. It is harder to argue with "here it is, look at. The XSC model requires regulators to trust that a zero-knowledge proof is actually proving what it claims, which is a higher technical bar.
On the other hand, ERC-3643's visibility means investor holdings, transaction histories, and identity links are permanently on a public chain. For institutional investors, that is a real concern that transparent compliance doesnt resolve.
the question im sitting with: which model do regulators actually prefer when you put it to them directly, the one they can inspect themselves, or the one that proves compliance without showing them anything? @Dusk
$DUSK #dusk
There are two main standards for tokenized securities right now and comparing them tells you more about the design philosophy behind each one than anything else does.
ERC-3643, also called T-REX, is the Ethereum approach. It is built on a transparent chain, so all token transfers are visible by default. The compliance layer sits on top as a wrapper contract. That contract checks whether a transfer is allowed before letting it through, using an identity system called ONCHAINID where investors register their credentials on-chain. The compliance rules and the identity links are inspectable by anyone who looks.
XSC, Dusk's Confidential Security Contract standard, starts from the opposite premise. The chain is private by default. Transaction amounts and holder identities are not exposed. Compliance is not enforced by a visible rule that anyone can inspect. Instead, a transfer proves with a zero-knowledge proof that the rules were followed, what the rules checked or who the parties are.
The comparison is not really about which has better rules. It is about what "compliance" means architecturally. ERC-3643 complies by letting auditors and regulators inspect the chain and see everything. XSC complies by proving mathematically that the rules were followed, without exposing the underlying data.
Both approaches have honest tradeoffs. The ERC-3643 model is familiar to regulators who are # records. It is harder to argue with "here it is, look at. The XSC model requires regulators to trust that a zero-knowledge proof is actually proving what it claims, which is a higher technical bar.
On the other hand, ERC-3643's visibility means investor holdings, transaction histories, and identity links are permanently on a public chain. For institutional investors, that is a real concern that transparent compliance doesnt resolve.
the question im sitting with: which model do regulators actually prefer when you put it to them directly, the one they can inspect themselves, or the one that proves compliance without showing them anything? @Dusk
$DUSK #dusk
