The contradiction between privacy and performance has been discussed for too long in the blockchain world. The common perception is: you can either choose privacy or speed, but not both.

However, some teams are taking this issue seriously. Layer 2 protocols focused on privacy compliance, through deep optimization of zero-knowledge proof (ZK) technology, are trying to offer an alternative answer.

The core idea of these solutions is straightforward: since financial institutions need to handle large-scale transactions, protect data privacy, and meet regulatory requirements simultaneously, they start redesigning from the underlying virtual machine. Their self-developed VM architecture is based on ZK technology, with the key innovation being a significant reduction in the computational cost of proof generation. What does this mean? It means that ordinary hardware devices can smoothly run privacy verification without the need for mining-level computing power.

This "pragmatism" approach differs from general-purpose privacy protocols in that it does not pursue absolute theoretical optimization but ensures that the system can truly run and be used while maintaining mathematical-level security.

Even more interesting is ecosystem design. The protocol’s governance token serves two roles: first, as fuel for network consensus; second, as an incentive factor for driving privacy computing services. This dual identity makes the economic model more three-dimensional.

Why talk about this now? Because a clear trend in the crypto market by 2026 is the rise of compliance as a central issue. Institutional capital requires compliant channels to enter, and on-chain real-world assets (RWA) need a compliant framework. From the digitization of private equity to cross-border payment clearing, infrastructure that can both protect privacy and pass audits is essential.

These underlying protocols play a crucial role in this process—they become the bridge connecting traditional finance with the on-chain world. Privacy compliance frameworks are not just technical options but also market options.