Midnight

Midnight (NIGHT): A Privacy-First Layer-1 Blockchain Built on Zero-Knowledge Cryptography

Midnight (NIGHT) is a fourth-generation blockchain designed to bring programmable privacy to decentralized applications through zero-knowledge proofs and selective disclosure mechanisms. The network, developed by Input Output Group as a Cardano partner chain, launched its native token in December 2025 through one of the largest community distributions in blockchain history.

The project attempts to solve what its architects call the "privacy trilemma"—the challenge of delivering privacy, programmability, and regulatory compliance simultaneously. Unlike privacy coins that obscure all transaction data, Midnight enables users and applications to control precisely what information they share, with whom, and under what conditions.

The Data Protection Question Nobody Solved

Public blockchains created a fundamental tension that persists across the industry.

Transparency enables trustless verification but exposes sensitive user data, transaction histories, and business information to permanent public scrutiny.

This architectural choice forces enterprises, institutions, and privacy-conscious individuals into an uncomfortable binary. Either accept full exposure of operational details on transparent chains, or retreat to traditional systems that sacrifice blockchain's verification benefits.

Existing privacy solutions have not bridged this gap effectively. Monero offers full transaction obfuscation but lacks programmable logic and selective disclosure required for regulated enterprise use. Zcash provides optional shielded addresses but does not deliver an expressive platform for private computation and complex contracts.

Midnight answers the question: What if privacy was not an on/off switch but a programmable policy?

Currently, NIGHT trades around $0.05 with a market capitalization near $850 million. Circulating supply stands at approximately 16.6 billion tokens against a fixed maximum of 24 billion. The token reached an all-time high exceeding $1.80 shortly after launch before experiencing severe correction.

From Cardano's Vision to Midnight's Launch

Input Output Group, the blockchain research and engineering company founded by Charles Hoskinson and Jeremy Wood in 2015, developed Midnight as its fourth-generation blockchain project. Hoskinson, who co-founded Ethereum before creating IOG and Cardano, has described Midnight as the most sophisticated product the company has ever worked on.

The project emerged from IOG's research into privacy-enhancing technologies.

Hoskinson unveiled Midnight at IOG's ScotFest event at the University of Edinburgh, where he outlined a vision for systems that provide freedom to work, collaborate, and interact while maintaining control and autonomy over data.

The Midnight Foundation, a separate organization dedicated to advancing the network, manages marketing efforts and ecosystem development. Fahmi Syed serves as President of the Midnight Foundation and has articulated the project's philosophy of "rational privacy"—selective, programmable privacy that protects sensitive data by default while enabling compliance when required.

The network's official X account launched in July 2023, marking its initial public presence. In November 2025, the Midnight Foundation hosted its inaugural summit at the Old Royal Naval College in Greenwich, bringing together 450+ builders, developers, and privacy advocates for hackathons and technical demonstrations.

Midnight's design philosophy reflects a broader recognition within the industry that pure transparency creates long-term exposure risks—from behavioral patterning to competitive intelligence to regulatory compliance challenges.

As blockchain use cases matured beyond simple transfers into finance, identity, healthcare, and enterprise data coordination, the assumed virtue of absolute transparency revealed growing contradictions.

Zero-Knowledge Cryptography and Dual-State Architecture

Midnight operates through a hybrid dual-state architecture that separates public and private computation. The public layer handles governance, global assets, and unencrypted stake, while the private layer processes sensitive contracts and executions under encryption.

At the core of this system sits the Kachina Protocol, a framework that enables users to process private state transitions off-chain and submit only zero-knowledge proofs to the public ledger.

The protocol uses recursive zk-SNARKs—zero-knowledge succinct non-interactive arguments of knowledge—to prove transactions are valid without exposing underlying data.

In a major 2025 technical milestone, Midnight transitioned its proving system to the BLS12-381 cryptographic curve. This move reduced verification times by 50% from 12 milliseconds to 6 milliseconds and shrank transaction sizes, enabling the network to target 1,000+ transactions per second with sub-second finality.

Developers write smart contracts in Compact, a domain-specific language based on TypeScript that abstracts away the complexities of zero-knowledge proofs. The language provides a simple and intuitive syntax for a minimal learning curve while enabling seamless integration with other on-chain features.

Unlike traditional smart contract platforms where logic executes directly on-chain, Midnight contracts run off-chain and generate zero-knowledge proofs that the logic was followed. The contract logic remains public, the data used during execution stays private, and the outcome—that rules were followed—becomes publicly verifiable using a proof.

The Midnight SDK provides all necessary tools to build and run software, including the compiler and runtime, a mocked node, CLI wallet, and example projects. A plug-in for Microsoft VS Code allows developers to seamlessly work with the blockchain.

OpenZeppelin has brought its trusted smart contract libraries to Compact, offering audited standards for building secure, privacy-preserving applications across DeFi, NFTs, identity, and real-world asset tokenization.

The NIGHT-DUST Dual-Token Economy

Midnight employs a dual-component tokenomics system that separates governance and capital from operational costs. This distinguishes it from most Layer 1 blockchains where a single token serves all functions.

NIGHT functions as the network's native governance token. It remains completely transparent and unshielded, tradeable, and serves as the capital asset of the ecosystem. Holding NIGHT generates DUST automatically over time.

DUST operates as a shielded, non-transferable, decaying resource used to pay transaction fees and execute smart contracts. The resource functions like a battery: once consumed for a transaction, it regenerates based on NIGHT holdings.

This separation creates several operational advantages. Enterprises and frequent users gain cost predictability since DUST continuously replenishes. Apps can sponsor user fees by directing their generated DUST to others. Third-party gateways can abstract the process entirely, letting users pay in other tokens or fiat.

The total supply of NIGHT stands at 24 billion tokens, with one unit dividing into one million subunits called STAR. Block rewards come exclusively from a pre-minted Reserve, not from newly minted tokens or NIGHT-denominated fees.

The tokenomics provide disinflationary mechanics over the long term, with new tokens entering circulation from the network reserve at a gradually decelerating rate with each new block. The whitepaper suggests the Reserve can last for a very long time, in the order of hundreds of years.

The "Glacier Drop" distribution distributed 100% of NIGHT tokens to users rather than through token sales or venture capital allocations.

The first phase targeted self-custodying holders of Cardano (ADA), Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP (XRP), Binance Coin (BNB), Avalanche (AVAX), and Basic Attention Token (BAT) based on a June 11, 2025 snapshot.

Over 3.5 billion NIGHT tokens were claimed through the Glacier Drop phase by 170,000+ eligible wallet addresses. The subsequent Scavenger Mine phase distributed 1 billion tokens to over 8 million unique wallet addresses, setting an industry record for distribution volume.

Claimed tokens unlock in four equal installments of 25% each over a 360-day thawing period. Each destination address receives a randomized start date between December 10, 2025 and early March 2026, with remaining installments unlocking every 90 days thereafter.

Institutional Partnerships and Enterprise Applications

Midnight has established partnerships with several institutional custody and infrastructure providers. Fireblocks, an enterprise platform for secure digital asset custody serving over 2,400 institutions, provides institutional custody of NIGHT tokens.

The Midnight Foundation has also partnered with Creditcoin to research infrastructure that verifies human identity through financial history. The collaboration focuses on validating humanity based on genuine economic relationships without exposing sensitive personal data.

Real-world application development has begun in healthcare specifically. A healthcare company in Turkey with three million patients works with Midnight to explore generating proofs of patients' medical histories. A large hospital in California examines using Midnight for cross-clinical trials with external partners, seeking to protect sensitive patient data while bringing together different silos of medical history.

The network has achieved a partnership with Google Cloud for infrastructure, security, and validator operations.

Copper provides institutional digital asset infrastructure with a focus on custody and collateral management.

Exchange support includes listings on OKX, KuCoin, Bitrue, HTX, Kraken, Bybit, Gate, Binance Alpha, Bitpanda, and MEXC. On decentralized exchanges within the Cardano ecosystem, NIGHT trades on Minswap, SundaeSwap, and Splash.

The selective disclosure model targets several enterprise use cases that transparent blockchains struggle to serve: confidential bids and private order books in finance, policy-gated disclosure for audits and KYC procedures, and private stablecoin protocols with shielded liquidations.

Token Volatility, Unlock Pressure, and Centralization Risks

NIGHT has experienced severe price volatility since launch. The token crashed approximately 83% from its initial peak above $0.45 to around $0.07 within its first month of trading. Heavy selling from airdrop recipients drove much of this decline as early participants monetized their allocations immediately.

The circulating supply structure contributed to price instability.

Nearly 16.6 billion tokens were available at launch from a total supply of 24 billion—a substantially larger floating supply than most projects introduce during early trading. This left the token vulnerable to sharp corrections when selling began.

The ongoing quarterly unlock schedule creates persistent sell pressure that acts as a cap on price rallies. Analysts have cited this unlock schedule as a key reason for NIGHT's underperformance versus other privacy tokens. Price stability likely requires demand to outpace this scheduled selling.

A phishing campaign targeted Midnight users in early January 2026, briefly impacting investor confidence during a period when the token was attempting to find a price floor.

The federated nature of the current network raises centralization concerns. IOG and selected partners currently operate the network's validators, with plans for progressive decentralization through 2026.

The DUST generation mechanism, while innovative, has not yet launched on mainnet—full details await the mainnet deployment scheduled for 2026.

Regulatory exposure remains uncertain. While Midnight's selective disclosure model targets regulatory compliance, privacy coins and privacy-focused chains have faced exchange delistings and regulatory scrutiny in multiple jurisdictions. Whether Midnight's "compliance-ready" positioning translates to actual regulatory acceptance remains untested.

Competition exists from established privacy-focused projects including Monero (XMR), Zcash (ZEC), and newer zero-knowledge platforms. The absence of concrete enterprise case studies in production indicates that Midnight's institutional adoption is still in early stages.

The reliance on IOG and the Hoskinson-led ecosystem introduces concentration risk. Hoskinson has faced criticism over private jet usage, early voucher programs, and treasury-related allegations, though he has rejected claims of misconduct and pointed to on-chain transparency.

Phased Roadmap Toward Decentralized Privacy Infrastructure

Midnight operates through a four-phase roadmap named with Hawaiian terms: Hilo, Kūkolu, Mōhalu, and Hua.

The Hilo phase launched December 8, 2025, marking NIGHT's debut as a Cardano Native Asset with exchange listings and liquidity provision. This phase establishes liquidity, community access, and enables future governance while the Midnight mainnet development continues.

Kūkolu targets Q1 2026 with the launch of a federated mainnet and the first privacy-enhancing decentralized applications on a stable network. The network has entered this phase with stable mainnet conditions and real dApp deployments now possible.

Mōhalu, scheduled for Q2 2026, begins the decentralization process.

Stake pool operators and nodes come online, and the DUST Capacity Exchange activates. The phase starts fully federated and transitions toward community-driven block production. Cardano stake pool operators will earn both ADA and NIGHT rewards for producing blocks without affecting their ADA operations.

The final Hua phase targets late 2026 and beyond, focusing on full interoperability through cross-chain bridges enabling privacy features for ecosystems like Ethereum and Solana.

The roadmap includes integration with the Polkadot SDK (Substrate) for modular deployment of hybrid dApps.

Hoskinson has framed the endpoint as a "crypto triumvirate": Bitcoin as the trust and value layer, Cardano as the computation layer, and Midnight as the privacy and identity layer.

Whether Midnight can execute this vision depends on several factors: successful mainnet deployment, meaningful developer and enterprise adoption, regulatory clarity around privacy-preserving compliance, and sustained demand that can absorb ongoing token unlocks. The project's technology remains untested at scale, and the competitive landscape for privacy-focused blockchain infrastructure continues to evolve.