DeFi is often joked about as the "Wild West of Digital"—full of opportunities but with fuzzy rules, and traditional capital can't get in. Since 2018, a team has been serious about this issue: how to build reliable "compliance channels" for this new frontier? The goal isn't to use rules to stifle innovation, but rather—through clever technical design—to turn compliance from external shackles into an internal competitive advantage.

This idea might sound radical: directly turning regulatory requirements into products. Imagine a plug-and-play toolkit that includes on-chain identity verifiers, transaction monitoring, and automatic tax reporting—developers can integrate these modules as easily as calling regular APIs, without having to decipher legal documents.

Here's a practical example. A lending protocol wants to go live. It can require participants to verify via on-chain credentials (users control their private keys, so privacy isn't compromised), and each fund flow automatically generates anti-money laundering audit records. On the surface, the details aren’t visible, but when regulators need to verify authenticity—this is selective, verifiable information disclosure.

This actually hits the core challenge of DeFi: how to protect user privacy while meeting transparency requirements for regulation? A lending pool built with privacy technology demonstrates this possibility—borrower identities and loan details are encrypted, so trading counterparts can't pinpoint your positions to attack, yet regulators can verify compliance through zero-knowledge proofs.

In plain terms, this is a redefinition at the technical level of "who can see what"—no longer a binary choice, but a fine-grained permission system. This is crucial for the entire DeFi ecosystem to move toward mainstream adoption.