Most blockchains pick one transaction model and commit to it forever. Dusk does something more practical: it runs two models side by side, because privacy and usability do not always want the same architecture.
On Dusk, transactions are handled by the Transfer Contract, which supports both a transparent account-based flow (Moonlight) and a confidential UTXO-based flow (Phoenix). That dual setup is not marketing. It is an engineering decision to balance “easy payments + smart contract UX” with “strong privacy for sensitive finance.”
Moonlight: the “normal” account-based lane
Moonlight is the side of Dusk that feels familiar to most users. Account-based systems behave like bank balances: you have an account, it has a number, and that number goes up or down as you send and receive.
This model is usually simpler for everyday activity. Wallets can show balances clearly, gas payments are straightforward, and building apps often feels more direct because state lives in accounts. For most Web3 users, this is the mental model they already understand.
Moonlight exists so Dusk can support smoother experiences where full privacy is not the priority, such as regular transfers, public actions, or workflows where being transparent is fine.
Phoenix: the private UTXO lane
Phoenix is where Dusk gets serious about privacy. Phoenix uses a UTXO-style architecture, which is closer to Bitcoin’s model: instead of “balances,” you spend discrete outputs like digital cash notes.
Why does that matter? Because UTXO models can be better for privacy and parallel spending design, especially when paired with cryptography. Phoenix is designed for obfuscated/confidential transactions and even confidential smart contract activity in a way that does not leak the same kind of obvious account trails.
Dusk explains Phoenix outputs as being stored in a Merkle tree, and users spend them by proving knowledge of the path and commitment opening, rather than exposing everything in plain sight. This is the foundation that enables confidential movement without turning the chain into a black box that institutions cannot touch.
And importantly, Phoenix is not just “privacy vibes.” Dusk published updates showing Phoenix has formal security proofs, positioning it as a serious transaction model rather than an experimental privacy add-on.
Why Dusk keeps both instead of choosing one
The simple answer: finance has multiple modes.
Some actions need to be transparent and easy. Others need to be private because the cost of leaking data is real. In trading, settlement, and issuance workflows, information leakage can become a direct disadvantage. Many institutions will not touch on-chain systems if every action exposes positions, counterparties, or execution details.
Dusk’s dual design lets builders choose the right lane:
Moonlight for speed, UX, and normal contract interaction.
Phoenix for confidentiality where it actually matters.
This is why the docs frame Dusk transactions as both “transparent and obfuscated,” managed under one protocol-level transfer system.
The compliance angle: private by default, but not unusable
A lot of privacy chains fail because they treat privacy like total invisibility. That creates problems for regulated markets, because regulated markets do not just want secrecy, they want controlled disclosure and accountable settlement.
Dusk’s approach is closer to real-world finance: keep sensitive details private, while still building a system that can support rules and enforcement where required. The network is explicitly designed for fast, deterministic final settlement, which is a requirement in financial workflows.
Phoenix handles confidentiality. Moonlight supports usability. And the chain’s settlement layer focuses on finality that markets can rely on.
The real takeaway for builders and investors
Moonlight vs Phoenix is not “two features.” It is a statement about what Dusk is trying to become.
Dusk is building a chain where privacy is not a loophole, it is a core market primitive. At the same time, it avoids the trap of making everything private, slow, or hard to use.
In practice, this dual-transaction model is what makes Dusk more than just another L1. It is trying to be a place where you can run financial activity that is confidential when needed, transparent when it should be, and final when it must be.
That is the kind of system institutions can actually plug into, and builders can actually ship on.
