【Introduction: The Invisible Compliance Tax】

Everyone, today we’re not looking at the market charts but discussing something deeper—why is financial innovation always so expensive?

In traditional finance, why can’t retail investors access the primary market? Why is corporate financing so difficult? Honestly, it’s not a lack of money, but the intermediary processes are too costly. Issuing stocks requires lawyers, auditors, bank custody, broker underwriting… each step takes a cut. This invisible "compliance maintenance cost" flows to intermediaries worldwide at hundreds of billions of dollars annually.

Current public blockchains can’t truly solve this problem. Ethereum can’t distinguish whether you’re a compliant investor or a hacker, nor can it restrict the flow of transactions.

It wasn’t until I delved into Dusk’s technical solution that I understood what it aims to do—replace expensive legal teams with smart contracts. This underlying standard called XSC essentially embeds legal rules into code.

【The Root Cause】

We use ERC-20, which is essentially a blank sheet of paper. Anyone can write on it and issue tokens, and anyone can transfer freely. It has no "judgment" capability and cannot impose restrictions on transactions.

If a sanctioned address takes your tokens, there’s nothing you can do. Legal restrictions like limiting shareholders to no more than 500? ERC-20 can’t enforce such constraints. Token standards are tools without opinions; all interactions are in a free market state—sounds very Web3, but it also means compliance issues become a post-hoc challenge.

This is what Dusk aims to break. XSC is not just a token standard; it’s a contract framework embedded with a rules engine.