This week’s team hangout covered a wide range of topics, from Nocturne testnet usage and DuskEVM to more questions around regulation, and the evolving roles of Hedger and Zedger.
Emanuele also shared some behind-the-scenes context on how institutions are approaching Dusk and what the team is prioritizing as we move toward more public-facing infrastructure.
You can find a breakdown of the key questions and answers below 
Nocturne Usage
Q: Is there any information on external usage of Nocturne besides Sozu? We noticed that the team is not using the public testnet.
A: The public testnet is mainly for the community and other external projects, the team itself doesn’t use it much right now. That’s because the application layer is moving to DuskEVM, so there’s less reason to build directly on Nocturne unless you’re working on something specifically related to DuskDS (formerly L1). So far, the only project close to that is Sozu, which is why they’re actively using Nocturne.
The core team prefers testing on private, internal environments because the goal right now is speed, fast iteration, fast feedback. Public testnets (even decentralized ones) can slow things down: resetting, auditing, or deploying fixes is more cumbersome. So to keep momentum, the devs chose to work in setups that are easier to control and faster to adjust.
Bridge & Regulation Risk
Q: In a permissionless system, I could build a bridge to move a security token elsewhere, where the wrapped version is no longer a security. How do regulators view this? Do they care? Does it need to be controlled with whitelists?
A: Great question to highlight how regulation actually works.
Regulators don’t act on assets or blockchains directly. Under MiCA, they regulate CASPs (centralized service providers like exchanges), not the protocols. So something like USDT isn’t banned, it just can’t be listed by regulated entities.
When it comes to securities, the key point is that legal rights (like dividends or governance) are only recognized within a licensed environment. Dusk is the first network where those rights are valid on-chain by default, because NPEX’s licenses are extended directly to the protocol.
If you bridge a security off Dusk, the wrapped version isn’t the same thing, it’s a synthetic representation, not a legally backed asset. Regulators don’t stop it, but they don’t recognize it either.
It only becomes a legal issue if someone falsely claims the wrapped version is the real security. That’s misrepresentation, and that’s where liability comes in.
Hedger vs Zedger - Privacy Capabilities
Q: If Hedger provides transactional privacy and encrypts balances and amounts, but doesn’t offer the same anonymity as Zedger, what’s the actual difference in privacy between them?
A: When it comes to payload privacy, meaning amounts, balances, and what’s inside a transaction, Zedger and Hedger offer similar guarantees.
The real difference is anonymity.
- Zedger uses the Phoenix transaction model, which is output-based, like using banknotes. You don’t know who left the note or who will pick it up. That’s true anonymity.
- Hedger, being EVM-compatible, uses an account-based model. This is more like a bank transfer: the system must know who holds the account and how much is in it to validate the transaction.
In Hedger, you can use pseudonyms (like ENS names or random addresses), but pseudonymity is not anonymity. If someone links your address to your identity, the privacy is gone.
So while both systems hide the contents of transactions, only Zedger + Phoenix fully hide who is transacting.
Endgame Preference: Zedger vs Hedger
Q: Is Zedger still the endgame, considering account-based models like Hedger (even with HE) have limitations?
A: Yes and no.
- No, because right now regulators are mostly focused on whether the system is secure, compliant, and beneficial to users, not on which privacy model it uses. Dusk is still small and doesn’t pose systemic risk, which makes regulators more open to collaboration. So Hedger is good enough for now to get us into production.
- Yes, because as Dusk grows and holds more value, regulators will pay closer attention, especially around privacy and GDPR compliance. There’s already debate on whether pseudonymous wallets are personal data. That may get clearer later, but we’ll need stronger tools ready just in case.
That’s where Zedger comes back in. If true anonymity and compliance are both needed, Zedger + Phoenix can deliver that. Hedger is a stepping stone, but Zedger remains a key part of the long-term vision.
NPEX Liability & Bridged Assets
Q: If assets on Dusk benefit from the NPEX license, can NPEX be held accountable for bridged assets outside their control?
A: No. If assets are bridged outside of Dusk, to Ethereum, Solana, or elsewhere, they’re no longer under NPEX’s control and no longer considered regulated securities. They become wrapped representations, not the original licensed assets.
NPEX is only responsible for what happens within Dusk, because that’s the network covered by their license. If something goes wrong on Dusk, like the network fails, then NPEX could be held accountable and risk losing its license.
But for anything outside Dusk? That’s out of scope. NPEX isn’t liable for what third parties do with bridged versions of those assets.
Institutional Interest in Dusk/NPEX
Q: Are there institutions waiting to see how the NPEX app works before adopting Dusk? Are they bigger than NPEX?
A: Yes, but it depends on the type of institution.
- Big regulated venues (like MTFs) are cautious. They see DLT as disruptive and prefer to watch how new players perform before getting involved. Their usual strategy is: let startups prove it works, then acquire them later.
- But asset managers are a different story. Some, and yes, some are larger than NPEX, are very interested in cutting costs now and are actively exploring tokenization. They’re watching closely and want to see the first assets live on Dusk before committing.
That said, these asset managers usually don’t deal directly with tech providers. They prefer working through other institutions, like 21X, which already has strong ties to big players like UBS and Apex. That’s why Dusk’s strategy is to work with regulated intermediaries like NPEX or 21X, and reach the larger ecosystem through them.
DuskEVM Public Testnet & Auditing
Q: Is DuskEVM already integrated into internal testnets or audited in production-like conditions? Will there be a public testnet before launch?
A: DuskEVM is built on a well-tested stack from Optimism, so there’s already strong stability.
There will be a testnet, but its purpose is to support application development, not to do a community-wide “pre-launch trial.”
So yes, a public testnet will come, but not because it’s required before launch. It’s more about giving builders the tools they need.
Watch the full recording of the conversation here: https://youtu.be/v80v4X9cewI
If you have more questions drop them below and we’ll make sure they’re added to next week’s session.
Join the team hangout weekly on Tuesdays at 4:00 PM CEST here: Dusk Community
See you there!