Cardano launches NIGHT privacy network: expanding blockchain privacy capabilities without compromising ADA

With the launch of the Midnight network and its native token NIGHT within the Cardano ecosystem, there was a discussion in the community about whether it would replace ADA. In response, Cardano founder Charles Hoskinson clarified that this understanding is a misconception. The goal of NIGHT is not to replace ADA but to serve as an essential component of the Cardano privacy network, expanding the application boundaries of the entire ecosystem without compromising ADA’s core value.

Midnight is a privacy and compliance extension layer within the Cardano system, focusing on privacy smart contracts, selective disclosure, and data protection that meets regulatory requirements. This direction has attracted market attention and also raised concerns among some investors about value transfer. Hoskinson emphasized that NIGHT exists to enhance Cardano’s overall capabilities, rather than divert or weaken ADA’s position.

In terms of functional positioning, ADA remains the settlement asset and security foundation of the Cardano main chain, playing core roles in staking, consensus, and value storage. NIGHT, on the other hand, serves internal privacy computing, incentive mechanisms, and governance within the Midnight network. The two tokens have clear divisions of labor, operating at different layers, forming a modular Cardano architecture.

Hoskinson pointed out that privacy networks require independent and finely-tuned economic models. Forcing ADA to undertake privacy computing and compliance incentives would actually reduce system efficiency. By focusing NIGHT on supporting Midnight, Cardano can introduce enterprise-grade and regulator-friendly privacy features without increasing the complexity of the mainnet.

From an application perspective, Cardano’s privacy network provides key infrastructure for industries such as finance, healthcare, and identity management. These fields have high requirements for data privacy and compliance, making it difficult to use fully transparent blockchains directly. The emergence of Midnight enables developers to build compliant and privacy-preserving applications within the Cardano ecosystem without migrating to other chains.

For ADA holders, this layout is not a threat but a long-term benefit. Enhancing privacy capabilities helps improve Cardano’s actual adoption, attracting more developers and institutions. As Cardano’s privacy network gradually comes into operation, the use cases and network value of ADA are also expected to increase in tandem.