Zero-knowledge proof technology is transforming the way traditional finance is brought on-chain. More and more institutions are focusing on a question: how to ensure transaction privacy while also complying with regulatory requirements? This is the core challenge that privacy-first Layer 1 networks need to address.

The uniqueness of these networks lies in their built-in confidential smart contracts and programmable privacy mechanisms. Simply put, they enable transaction parties to protect sensitive business information within a fully transparent and compliant framework. From digital bonds to security tokens, the demand for on-chain traditional assets is becoming increasingly urgent, but privacy and compliance are often seen as conflicting.

The real breakthrough is that, through the underlying design of zero-knowledge proofs, institutions can achieve end-to-end privacy protection without exposing transaction details. What does this mean? It means the barriers between DeFi and traditional finance are being broken down. RWA products like digital bonds and compliant security tokens have finally found a technical route that meets institutional needs and adapts to regulatory frameworks.

The market is waiting for such innovations to be implemented.