Here is a summary of this week’s Team Hangout with Emanuele Francioni (CEO):
Modular Architecture & L1/L2 Strategy
Instead of trying to do everything (data availability, consensus, and execution) within one compact or “monolithic” protocol, Dusk is evolving into a system where each layer does one thing well:
- Layer 1 (L1) will handle consensus and data availability only.
- Layer 2s (L2s) will handle execution, meaning smart contracts and applications.
In the current version of Dusk, everything is bundled together, but in the new model, We split these responsibilities across dedicated, purpose-built networks:
- The EVM execution layer will run account-based apps (like DeFi).
- The Phoenix execution layer will run privacy-preserving apps using output-based transactions.
- Both are considered native to Dusk, not external rollups like in Ethereum.
Think of it like this:
| Layer | Role |
|---|---|
| L1 | Finality, staking, consensus, DA |
| EVM (L2) | Public smart contracts, app layer (account model) |
| Phoenix (L2) | Confidential execution (output model) |
This setup enables Dusk to provide performance, maintainability, and privacy, without compromises.
EVM L2, Bottlenecks & Interoperability
Dusk is launching an EVM-compatible execution layer to enable faster deployment, broader adoption, and simpler integration with third-party tools and ecosystems.
EVM-based integrations take ~2 weeks, while custom L1 integrations can take 6+ months and are 50x more expensive.
- The EVM is fast, proven, and can scale far beyond current usage.
- If/when it becomes too saturated, we can instantiate multiple EVMs.
EVM L2 gives developers a familiar stack such as Solidity, Hardhat/Foundry, OpenZeppelin contracts, Standard RPC interfaces.
This means builders can deploy to Dusk without learning a new language or dealing with unfamiliar infra. It’s plug-and-play.
This will allow us to connect regulated, privacy-preserving finance to DeFi and broader Web3.
Hedger & Confidential Securities
Hedger is the successor to Zedger:
Unlike privacy solutions in DeFi that rely only on ZK (like zkSNARKs), Hedger uses fully homomorphic encryption, a much more advanced cryptographic model that allows computations on encrypted data without decrypting it.
That combination is what enables:
- Obfuscated order books (traders don’t leak intent)
- Private ownership of assets
- Fully auditable transactions (regulators can decrypt when needed)
- Identity-preserving transfers between known parties
Hedger is also fast. Proving happens in-browser, in ~2 seconds. That’s a huge leap from legacy ZK systems, which often required backend proving or minutes-long delays
It is not a general-purpose DeFi privacy tool, it’s built specifically for regulated securities.
It combines academic breakthroughs, Years of R&D, and real-world feedback from institutional partners, all while keeping performance and UX in mind.
Hedger is also composable. Assets created in the EVM or account layer can interact with Hedger without needing to duplicate the asset or bridge it across systems. And because it’s built into Dusk’s modular stack, integration is seamless.
Partner Differentiation
Emanuele clarified the distinction between strategic partners and collaborations. We may:
- Work with an issuer
- Collaborate with a venue
- Provide infrastructure for pilots or experiments
But this doesn’t mean the other party is necessarily "building on Dusk” in the way people typically interpret that in crypto.
We intentionally avoid the Web3 marketing norm of vague partnership announcements.
Instead, our approach is:
- Build quietly
- Launch fully working infrastructure
- Announce only once live or integrated
This is especially important in regulated finance, where credibility and delivery matter more than hype.
Integration Support, EVM Development & Moonlight
EVM L2 integration efforts are being done by both internal engineers and external help.
Multiple external engineering teams are helping Dusk launch its new execution layer. This includes:
- Building core runtime infrastructure
- Bridging components between L1 and EVM
- Deploying standard modules (staking, DEXs, etc.)
These are deep, protocol-level contributions that help accelerate rollout, ensure compatibility, and scale development beyond the core team.
Regarding Moonlight (account model on L1), Emanuele explained that staking & governance run smoothly on it, so no forced migration.
One of the core drivers for launching EVM L2 is to solve integration pain with centralized exchanges (CEXs) and infrastructure providers.
- Current stack (Moonlight or native Dusk) lacks standard RPCs and wallet support.
- This creates friction for listing, custody, and bridging.
- EVM support removes all of that: standardized interfaces, MetaMask-compatible, and exchange-friendly.
This is part of the go-to-market readiness strategy: build infra that doesn’t just work technically, but also fits into the systems exchanges and custodians already use.
Token Model & Exchange Strategy
Despite major changes in architecture (like modular L2s), there will be no new token.
DUSK remains the single native asset across all layers, with each layer assigning it different roles.
- L1 DUSK → staking, consensus, governance.
- L2 DUSK → gas for dApps and user interaction.
The plan:
- ERC20 and BEP20 tokens will be migrated into EVM L2.
- DUSK on EVM will become the main version used by exchanges and users.
- The bridge will allow seamless transfers between EVM and L1.
This solves multiple problems at once:
- Easier listings (standard tooling)
- Better custody support
- Uniform gas model
And since the bridge is native and trustless, there’s no need to rely on external custodians or wrapped assets.
Community Role & Validator Involvement
While execution moves to L2, validator incentives and responsibilities remain relevant, especially as decentralization expands.
- Our Layer 1 remains under Dusk Foundation control for the time being.
- This is by design: governance decentralization will follow once the infrastructure is stable, scalable, and in use.
So validators help secure the network and provide consensus, but not yet influence execution-layer decisions or protocol upgrades.
The upcoming EVM L2 will initially be fully centralized.
Why?
- It allows faster deployment.
- It ensures compatibility with partners.
- It reduces early coordination overhead.
The plan is to eventually delegate governance and sequencing to the validator or community layer.
L1 & EVM L2 Compatibility
The upgrade will happen at the binary level, validators and full nodes will simply run a new version of the software that includes:
- Support for the EVM L2 bridge contract
- Enhanced cross-layer messaging
- Compatibility with new execution layers
This means:
- No action required from stakers
- Validators will upgrade just like a regular software patch
- Existing balances and on-chain data remain valid and intact
A key addition is the native bridge contract that connects L1 and EVM L2.
- Users will be able to move DUSK between L1 and the EVM layer.
- The bridge will be part of the L1 upgrade, not a third-party integration.
- This ensures trustless, transparent movement of tokens and data.
Market Cap, Perception & the Path to Product Market Fit
Emanuele acknowledged the low market cap and limited visibility, but emphasized that Dusk is focused on building real infrastructure, not chasing hype.
“We won’t do announcements unless there’s something real to show.”
Dusk’s priority is achieving product-market fit as soon as possible and marketing will ramp up after these are live.
We avoid premature hype. Instead, we’re focused on:
- Building architecture that can last
- Testing with real partners (NPEX, 21X & others)
- Avoiding crypto-native hype cycles in favor of real-world applications
That’s why you don’t see constant updates or flashy partnerships, but when something is shipped, it’s production-grade.
Everything we are doing, EVM L2, Hedger, modular design, is aimed at enabling actual financial products to go live. Once these products are out, marketing spend will follow.
Final Word
Our plan is simple:
- Launch EVM L2 + native bridge.
- Ship Hedger for confidential transfers.
- Onboard first regulated assets & venues.
- Grow liquidity, builder ecosystem, and decentralised sequencing.
When real-world securities trade 24/7 on Dusk with privacy and compliance baked-in, the rest will follow.
Thank you for your continued support and great questions. We’ll keep building, shipping, and sharing transparent updates along the way.
You can listen to the full conversation here 
https://youtu.be/d5-lbVv4rdU?feature=shared
It dives even deeper into each subject and might clarify things further.
If you have further questions, feel free to drop them below or ask in our Discord.