Midnight

Privacy-focused Layer 1 blockchain operating as Cardano's first Partner Chain, enabling SPO block production and cross-chain privacy infrastructure

Project Overview

Basic Classification: Cardano Partner Chain implementing programmable data protection, core function as independent Layer 1 blockchain leveraging Cardano's security infrastructure, primary use case enabling selective disclosure for enterprise applications requiring regulatory compliance while maintaining interoperability across blockchain ecosystems

Ecosystem Layer: Partner Chain (independent blockchain with own ledger and consensus, not dependent on Cardano to exist but leveraging Cardano SPO infrastructure for block production through the Partner Chains Framework)¹

Technical Maturity: Beta (testnet-02 operational with Partner Chains v1.5.0 framework, approaching federated mainnet phase)

Innovation Level: Experimental (pioneering multi-resource consensus through Minotaur protocol, novel dual-token economics with NIGHT/DUST separation, first implementation of Kachina private smart contract protocol)

Market Position: First Cardano Partner Chain implementation, positioned as "Layer 2 to everyone" enabling hybrid DApps across Ethereum, Bitcoin, Solana, and other ecosystems², TypeScript-based Compact language lowering barrier for Web2 developers, enterprise compliance focus through "rational privacy" framework enabling selective disclosure

Partner Chain Identity: Midnight is explicitly categorized as a Partner Chain rather than sidechain¹. Partner Chains are independent chains with their own ledger and consensus that leverage Cardano's security infrastructure through voluntary SPO participation, distinguishing them from Layer 2 solutions that depend on the base chain for existence.

Team & Notable Experience

Leadership & Core Team: CEO Eran Barak leads Shielded Technologies (the core development entity), bringing 20+ years of leadership scaling businesses with highly sensitive data, including COO of Symphony (acquired for $1.2B+) and background as Chief Data Officer handling data governance across healthcare and financial services³. Founder Charles Hoskinson co-founded Ethereum and Cardano, leads Input Output Global with vision for Midnight as the "most sophisticated and advanced team" in terms of thinking and technology stack². Principal Architect Kevin Millikin brings nearly 20 years of programming language design experience from Google and DeepMind, working on JavaScript, Dart, and Python implementations⁴. Head of Products Mauricio Magaldi has 10 years in blockchain with background in data governance and GDPR implementation⁵.

Organizational Structure: Three distinct entities govern Midnight's development and operations⁶:

• Shielded Technologies: Core engineering company building the Midnight network, led by CEO Eran Barak
• Midnight Foundation: Launched May 2025 at Consensus Toronto, led by President Fahmi Syed (former CFO at Parity Technologies), guides long-term network direction and ecosystem development
• Input Output Global: Original developer of Midnight concept through IOG's research division, with 210+ published cryptography papers informing the protocol²

Key Architects: Thomas Kerber authored the Kachina protocol paper enabling private smart contracts⁷. Jonathan Sobel serves as Consulting Architect with traditional software architecture background. Stan Lohan leads Developer Relations Engineering.

Linux Foundation Contribution: Shielded Technologies became a premier member of Linux Foundation Decentralized Trust, contributing the Compact language as open-source infrastructure⁸.

Notable Achievements & Timeline

2016-2020: Research phase began at Input Output Global, culminating in the 88-page Kachina paper published in 2020 defining private smart contract architecture². Minotaur multi-resource consensus paper developed with University of Edinburgh research team.

November 2022: Midnight officially announced at Cardano Summit as privacy-focused Partner Chain with dual-token economics (NIGHT/DUST), representing advancement in Basho era scaling vision.

March 2023: Eran Barak appointed as inaugural CEO of Shielded Technologies, joining from Symphony COO position to lead privacy blockchain development.

Q4 2023: Technical specifications released including Substrate framework foundation with TypeScript-based Compact language. Initial devnet launched November 2023 onboarding 600+ development teams.

October 2024: Public testnet launched enabling developers to build privacy-preserving applications with zero-knowledge proofs.

April 2025: Major testnet-02 upgrade introducing Partner Chains v1.5.0 framework, transition to BLS12-381 proving system, release of Midnight.js 1.0.0 SDK and Rust-based Indexer.

May 2025: Midnight Foundation and Shielded Technologies introduced at Consensus Toronto establishing governance framework. Strategic partnerships announced with Balance (institutional custody) and Keyring (compliance solutions).

August 2025: Glacier Drop Phase 1 launched across 8 blockchain ecosystems (Cardano, Bitcoin, Ethereum, Solana, XRPL, BNB Chain, Avalanche, BAT). OpenZeppelin partnership announced for Compact smart contract library development.

September 2025: Google Cloud collaboration announced with validator operation, Mandiant threat monitoring, and up to $200,000 in cloud credits for ecosystem startups⁹.

October-November 2025: Glacier Drop Phase 1 completed with 3.5+ billion NIGHT tokens claimed by 170,000+ addresses. Scavenger Mine (Phase 2) distributed 1 billion NIGHT to 8+ million participants, setting industry record for distribution by wallet count¹⁰.

November 2025: Midnight Summit held in Greenwich, London with 450+ builders. Charles Hoskinson confirmed December 2025 token launch and four-phase mainnet roadmap (Hilo, Kukolu, Mohalu, Hua)¹¹.

Tech Stack & Development

Development Status: Active (public repositories on GitHub, Apache 2.0 licensing, continuous testnet upgrades with v0.26.0 Compact compiler featuring indexable bytes values, hexadecimal/octal/binary literals, and spread operators)

Partner Chains Framework Architecture: Midnight harnesses the innovative Partner Chains Framework to operate as a Cardano Partner Chain¹². This Substrate-based framework enables blockchains like Midnight to leverage Cardano's robust security powered by Cardano stake pool operators. SPO participation is voluntary - operators must register with the Midnight Block Producer Committee, a smart contract residing on the Cardano blockchain that manages candidate rotation and selects SPOs to produce blocks each epoch.

Core Protocol Technologies:

• Kachina Protocol: 88-page paper from 2020 enabling private smart contracts with dual-state architecture - public state onchain, private state offchain². Smart contracts interact with on and offchain data while user data never leaves their machine⁵.

• Minotaur Multi-Resource Consensus: Enables combining proof of work, proof of stake, and arbitrary consensus algorithms together². Creates blockchain security from multiple proof types simultaneously, providing diversity in decentralization and resilience. Published by IOG with University of Edinburgh research team.

• Compact Language: TypeScript-based domain-specific language designed so developers switching between Compact and TypeScript experience no jarring transition⁴. Code runs three times: locally on user's device with private data access, proof server constructs ZK proof, onchain in Impact VM. Produces JavaScript executable plus ZKIR (Zero Knowledge Intermediate Representation) for proving.

• BLS12-381 Proving System: ZK-SNARK framework using Halo 2 with plonkish arithmetization enabling ZK recursion - ability to wrap proofs in other proofs for lighter state footprint¹³.

• Impact VM: Onchain virtual machine executing public transcript operations on high-level data structures (sets, maps, lists) with commutative operations for handling public state contention¹³.

Block Production Requirements: SPOs must connect Midnight node to PostgreSQL instance running Cardano DB-sync. Block production eligibility activates approximately 2 Cardano epochs after registration with the Block Producer Committee smart contract¹².

SDK & Tooling: Midnight.js 1.0.0 TypeScript SDK, Rust-based modular Indexer (v2.1.1) with chain indexer, wallet indexer, and GraphQL API supporting PostgreSQL and SQLite databases. Indexer open-sourced on GitHub¹⁴.

Cross-Chain Architecture: Designed as "Layer 2 to everyone" - not replacing ecosystems but providing rational privacy capabilities across all chains². Hybrid DApp model enables applications on Ethereum, Solana, or other chains to call Midnight for private operations, with cross-chain smart contract state transfers planned shortly after launch¹⁵.

Smart Contracts & Security

Security Overview Summary:

• Audit Status: No public security audits identified during testnet phase; formal audits planned before mainnet
• Formal Verification: ZK-SNARK proving system with upgradeable cryptographic proofs without smart contract redeployment
• Bug Bounty: None publicly announced during testnet phase
• Security Incidents: Clean record - no reported security incidents since testnet launch
• Security Initiatives: OpenZeppelin partnership for Compact smart contract library development, Blockdaemon operating 5 observational nodes for fair/democratized launch¹⁶

Smart Contract Discovery & Documentation

Compact Smart Contract Architecture:

• Programming Language: Compact (TypeScript-based) enabling developers to write privacy-preserving smart contracts with automatic ZK proof generation⁴
• Circuit Types: Exported circuits callable from DApps, non-exported helper circuits for internal logic. Circuits classified as impure (access public state/invoke witnesses) or pure (no state access)¹⁷
• Witness Functions: Off-chain functions with access to private data, implemented in TypeScript/JavaScript
• Source Code: Open source development with Apache 2.0 licensing, Compact contributed to Linux Foundation Decentralized Trust

Security Audits & Assessments

Overall Security Status: Unaudited (testnet phase with planned audits before mainnet launch)

Partnership with OpenZeppelin (Announced February 2025)¹⁸

• Scope: Development of dedicated Compact smart contract library and security standards
• Security Standards: Implementation of ERC20, ERC721, ERC1155, and ERC3643 equivalents for Compact language
• Starter Applications: DeFi, Identity, NFT, and RWA tokenization templates
• Track Record: OpenZeppelin libraries have secured over $21 trillion in value across blockchain ecosystems

Launch Security Measures:

• Blockdaemon Observational Nodes: Five independent observational nodes ensuring fair, democratized launch¹⁶
• Google Cloud/Mandiant: Advanced threat monitoring and incident response through Google Cloud collaboration⁹

Regulatory & Compliance

Compliance Architecture: Programmable selective disclosure enabling organizations to meet regulatory requirements while maintaining privacy. "Rational privacy" model enables nuanced decisions about transparency versus confidentiality tailored to specific industries and use cases¹⁹.

DUST Compliance Innovation: Non-transferable DUST token eliminates traditional privacy coin compliance concerns - regulators "were very happy because finally we can deliver privacy with compliance"²⁰.

Enterprise Use Cases: KYC transformation enabling banks to share affirmations without underlying data, RWA tokenization with embedded compliance (ERC-7518), healthcare records with HIPAA compliance, AI training on private data without exposure²¹.

Token Economics & Governance

Dual Token Model: Separates security/governance (NIGHT) from transaction fees (DUST), solving volatility prediction problem through "buffet pricing" - buy NIGHT once, consume DUST as needed²⁰.

NIGHT Token (Utility):

• Total Supply: 24 billion tokens, 100% distributed to community²²
• Functions: Resource generation (generates DUST), block production rewards, decentralized governance, ecosystem incentives
• Nature: Unshielded native token existing natively on both Cardano (as native asset) and Midnight mainnet
• Unique Property: Unlike most native tokens, NIGHT is not expended to execute transactions - holders with sufficient NIGHT can potentially execute transactions indefinitely at no cost²²

DUST Resource (Transaction Fuel):

• Nature: Shielded, renewable, non-transferable resource powering transactions
• Mechanics: Perpetually generated by holding NIGHT, decays within approximately one week (like battery charge)²⁰
• Privacy: Cannot be transferred between users, enabling privacy without compliance concerns
• Secondary Market: DUST Capacity Exchange planned for peer-to-peer marketplace of unused DUST generation capacity²³

Glacier Drop Distribution:

• Phase 1 (Glacier Drop): 60-day claim period across 8 ecosystems with minimum $100 USD equivalent eligibility
  • Cardano: 50% allocation (12 billion NIGHT)
  • Bitcoin: 20% allocation (4.8 billion NIGHT)
  • Remaining 30% across Ethereum, XRPL, Solana, BNB Chain, Avalanche, BAT
• Phase 2 (Scavenger Mine): 21-day browser-based cryptographic challenges, open to everyone
• Phase 3 (Lost-and-Found): 4-year claim window for eligible participants who missed Phase 1

Results: 4.5+ billion NIGHT distributed to 8+ million participants, with Scavenger Mine setting industry record for wallet participation¹⁰.

Governance Structure: NIGHT enables decentralized on-chain governance. Midnight Foundation established May 2025 guides long-term network direction. On-chain Treasury planned for ecosystem funding via governance mechanics.

Metrics & Adoption

Glacier Drop Participation:

• 3.5+ billion NIGHT claimed in Phase 1 by 170,000+ addresses (14%+ of total supply)¹⁰
• 1 billion NIGHT distributed in Scavenger Mine to 8+ million wallets
• 34 million eligible addresses across 8 blockchain ecosystems

Testnet Growth (as of October 2025):

• 19% increase in block producers
• 29% increase in smart contracts deployed
• 8% increase in unique wallet addresses
• 21% increase in faucet requests²⁴

Developer Ecosystem: 600+ development teams participated in initial devnet. Compact compiler reaching v0.26.0 with continuous feature additions. OpenZeppelin Compact Contracts library enabling standardized development patterns.

Enterprise Partnerships: Institutional infrastructure through Fireblocks custody, Blockdaemon node operations, Google Cloud validator deployment, Balance qualified custody, Keyring compliance solutions.

Funding & Revenue

Business Model: Enterprise blockchain infrastructure platform targeting regulated industries requiring privacy-preserving applications with selective disclosure, revenue through network transaction fees (DUST consumption) and enterprise partnership services.

Funding Structure: Privately funded through Input Output Global resources with no external venture capital rounds disclosed. Leverages IOG's established funding base from Cardano ecosystem development.

Strategic Backing:

• Input Output Global as primary strategic investor and research partner (210+ cryptography papers)
• Linux Foundation Decentralized Trust premier membership
• Institutional infrastructure partnerships with enterprise-grade providers

Foundation Resources: Midnight Foundation established May 2025 with mission to support ecosystem development, engage NIGHT community, and build relationships for innovation and growth.

Market Position

Partner Chain Differentiation: First implementation of Cardano Partner Chains Framework, demonstrating model for independent chains leveraging Cardano SPO security infrastructure. Distinguished from sidechains by independent consensus and ledger not dependent on Cardano for existence¹.

Competitive Positioning vs Privacy Chains:

Fourth Generation Blockchain Vision: Charles Hoskinson positions Midnight as fourth generation blockchain: "Satoshi gave us good money; Ethereum gave us programmability; Cardano brought the third generation of interoperability, scale and good governance. Midnight gives us our identity and privacy back."¹¹

Strategic Partnerships:

• SundaeSwap / Sundae Labs: Building Capacity Exchange for cross-chain payments (ADA, ETH, Bitcoin for DUST), native Cardano-Midnight bridge, contributing to mainnet core node development¹⁵
• VIA Labs: Cross-chain interoperability connecting 138 chains (EVM and non-EVM), supporting Glacier Drop bridge between cNIGHT and mNIGHT²⁵
• Zoniqx: Enterprise-grade RWA tokenization with ERC-7518 compliance-embedded tokens²¹
• Google Cloud: Validator operation, Mandiant security, startup credits program⁹
• Blockdaemon: 200,000+ nodes across 40 data centers, institutional infrastructure¹⁶
• Outlier Ventures: Privacy Enhancing Technologies track in accelerator program²⁶

Roadmap

Mainnet Phases (Hawaiian Moon Naming Convention)¹¹:

1. Hilo (First NIGHT): Token distribution, NIGHT minting on Cardano, exchange listings - Q4 2025
2. Kukolu (Safe Port): Genesis block, federated mainnet launch, first privacy-enhancing DApps, trusted validators - Q1 2026
3. Mohalu (Expansion): Scaled Incentivized Testnet, block producer activity, DUST Capacity Exchange activation, transition to community-driven block production - Q2 2026
4. Hua (Abundance): Hybrid DApps launch, privacy tech embedded in other chains, full decentralization - Q3 2026

Technical Development:

• Compact language ecosystem expansion through OpenZeppelin standardized libraries
• ZK recursion at contract and chain state level for optimized proofs
• Fast BFT consensus for enterprise fast finality requirements
• SNARK upgradeability for future cryptography advances

Ecosystem Expansion:

• Hybrid DApp model enabling Ethereum/Solana/Bitcoin applications to leverage Midnight privacy
• Cross-chain smart contract state transfers via Sundae Labs bridge
• Project Catalyst Fund15 dedicated Compact DApps funding category²⁷
• Enterprise compliance tooling for healthcare, finance, and identity management

Vision: Establishment as primary privacy infrastructure layer for multi-chain ecosystem, enabling programmable data protection across all blockchain networks through Partner Chain architecture while maintaining regulatory compliance through selective disclosure capabilities.

Citations