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What We Know About New Project from Cardano: Midnight Sidechain
Author: changehero
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Input Output Global (IOG), the company responsible for the Cardano blockchain, is releasing its first blockchain for privacy named Midnight. Midnight, one of several upcoming side chains in Cardano, is powered by zero-knowledge proofs. The platform will exceed previously announced privacy coin projects by providing zero-knowledge-proof-empowered smart contracts.

The Fundamental Freedoms of Midnight Blockchain

The Midnight project is an initiative by IOG, the company behind Cardano. It initially aimed to develop a secure and scalable protocol for the decentralized web. The project focuses on building a framework called Atala, which provides a suite of tools and infrastructure for organizations to build and deploy decentralized applications (dApps).

Atala attempted to address the challenges faced by traditional centralized systems, such as data privacy, security, and scalability. It was decided to leverage blockchain technology to enable transparent and auditable transactions while ensuring data privacy through cryptographic techniques.

In November 2022, the new version of the Midnight project was announced. Among the most important new information revealed in the announcement was the fact that Midnight will be leveraging zero-knowledge proofs.

how zero-knowledge proof works
Source: Circularize

Zero-knowledge proofs (ZKP) are cryptographic protocols that enable one party to prove to another party that a statement is true without revealing any additional information beyond the validity of the statement itself. In essence, they allow for the verification of information without disclosing any underlying data.

With ZKP, Midnight will be a data protection-based blockchain that safeguards sensitive commercial and personal data, protecting fundamental freedoms of association, commerce, and expression for developers, companies, and individuals.

The Midnight Network lets developers code DApps easily. It allows users to accept certain guidelines and control what sets of information regulators can access. Midnight is an attempt to promote fundamental freedom. It will be possible for networks to collaborate on open standards agreed upon by a group or consortium. Individuals also will be able to safely share their sensitive information when operating in a connected world.

midnight logo
Source: IOG

Midnight will enable developers to quickly build and deploy data protection-first DApps using many programming languages, starting with Typescript, whilst companies will be able to share mission-critical information without the fear of leaks or censorship.

Midnight is back in the news, since IOG teased that the sidechain will be hitting the DevNet soon. How will it impact its underlying network, Cardano, upon launch?

Cardano and Midnight

The link between Cardano and Midnight could not have been more direct. As the Input Output Global CEO Charles Hoskinson put it,

“Midnight is a partner chain to Cardano, and the idea is that Cardano provides security, infrastructure, decentralization, and ecosystem. (…) Midnight provides a regulated value transfer protocol and a framework for people to build confidential smart contracts.”

The Cardano-based sidechain is being constructed in trustless environments that use public and private computing. It employs zero-knowledge cryptography and operates as a side chain of the Cardano Blockchain with its decentralized characteristics. So Cardano’s functionality becomes even more useful, enabling individuals and businesses to interact by sharing or distributing information. The system creates an environment rich in data-protected connectivity that combines trust and security within Cardano’s ecosystem.

Cardano’s Privacy Coin? The Dust Token

The Midnight blockchain will have a native token — Dust. “This is a completely new way of writing and running private smart contracts and private computation. So you can have a private DEX (decentralized exchange) or go mine an anonymous data set or these types of things,” said Hoskinson.

The Dust token is the native cryptocurrency token in the Midnight blockchain. While the token doesn’t exist right now, here’s the most interesting info. Dust is expected to be an initial token on Midnight’s crypto network. The native token ADA is Cardano’s native token, and the two will coexist with one another. Midnight’s Dust tokens are part of Midnight’s network, which has a strong potential on its own. The Dust token is believed by most supporters to be first and foremost there for gas payments.

The Midnight sidechain also supports the issuance and management of custom tokens, which can be used to represent assets, currencies, or other types of value on the Cardano network.

The Backdoor Debacle — Controversy Around Midnight

As explained by Hoskinson, Midnight is a privacy framework for Cardano that will walk the line between anonymity and compliance. In a report made by CoinDesk, his quote was put in printing in the following way: “The system will walk the line between preserving privacy and allowing regulators and auditors a backdoor into the system when permission is granted, he said.

Needless to say, the word “backdoor” drew the ire of the crypto community, and not one directed at the media. Monero’s X account specifically called IOG out on building a backdoor into a “privacy” blockchain before being corrected. By now, it is clear that Midnight deserves the right to be called a privacy-focused blockchain that evolved privacy coin technology.


The Midnight project might be associated with Cardano through its makers. Nonetheless, it is dedicated to advancing the development of decentralized applications and promoting the adoption of blockchain technology for a more secure and transparent digital future.

If you found this guide insightful, check out our blog for more coverage of Cardano and other crypto projects. Subscribe to our social media for updates: Telegram, X (Twitter), Facebook, and Reddit.

Frequently Asked Questions

What is Midnight by Cardano?

Midnight is the Cardano side-chain solution with a mission to enable scalable, secure smart contracts for Cardano. This side-chain is designed primarily to protect sensitive business and personal information.

What stage is Cardano in now?

Cardano is undergoing the Basho era which is intended to improve the platform’s scalability and interoperability. Implementation of a splitter and integration of the side-chain is a key priority within the network during the current phase.

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