The following is a guest post and analysis from Shane Neagle, Editor In Chief fromThe Tokenist.

On June 23rd, Midnight Foundation released its first tokenomics paper. Earlier in June, Charles Hoskinson, the co-founder of Ethereum (ETH) and founder of Cardano (ADA), pegged Midnight as “the single biggest event in the history of Cardano,” with a caveat: “if it is successful.”

Although the altcoin season had a pullback this week, and the crypto market is more diluted than ever with tens of thousands of tokens, it is worth investigating new projects. After all, the exit of the Biden administration represents the departure of a hostile force that used many underhanded tactics to debank crypto projects.

In that light, what is the merit behind Midnight?

Cardano’s Need for Midnight

It is no secret that the Cardano blockchain is generally perceived as lagging behind other networks such as Ethereum or Solana. By total value locked (TVL), Cardano ranks 20th according to DefiLlama, with $360 million in capital across ~50 dApps. For comparison, Solana has a TVL of $10 billion across ~240 dApps, which is again 8x lower than Ethereum.

This lack of significant market share is largely attributed to Cardano’s robust academic approach to smart contract development and blockchain frameworks, ensuring that the network has all its ducks in a row to avoid reputation-disabling vulnerabilities down the line.

Charles Hoskinson also noted the lack of stablecoins as a contributing factor, having floated the idea of converting around $100 million worth of ADA tokens into USDM stablecoins, which are issued by the regulated Moneta Digital LLC service.

Moreover, if scaling of Cardano goes as planned, in addition to the inflow of stablecoins post-Genius and Clarity Acts, Hoskinson boldly forecasted that the altcoin market will see trillions of value—and that Cardano is expected to play a major role in it. But what is Midnight’s role?

Midnight’s Background and Pitch

Midnight is closely tied to Cardano’s IOHK (Input Output Hong Kong), later rebranded as Input Output Global (IOG). While the Swiss-based Cardano Foundation is in charge of developing the blockchain ecosystem, such as adoption and community-building, IOG is the software engineering organization behind Cardano’s core tech and roadmap.

As the current president of the Midnight Foundation launched in May, Fahmi Syed served within IOG to push the project, in addition to contributing to Polkadot and Kusama via Parity Technologies. Prior to Syed’s crypto involvement, he was the chief operating officer (COO) at UK-based Fifthdelta, which emerged as a startup from Citadel money managers in 2021.

Midnight Foundation pitches the network as a “fourth-generation blockchain built for secure, compliant, and private decentralised applications.” What does that mean exactly?

1. TradFi has been notoriously cautious to adopt blockchain because the default one is too transparent. Both Ethereum and Bitcoin have transactions publicly visible, which doesn’t lend itself to safeguarding customer data and financial privacy.
2. Midnight aims to step into this gap by providing programmable privacy, utilizing zero-knowledge proof cryptography. This tech enables data/transaction verification without revealing identity, making it regulatory-compliant in the process.

Specifically, Midnight Network uses ZK-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge) with its own smart contract programming language, Compact. Although zero-knowledge proof is more computationally intensive off-chain, this tech reduces on-chain load without requiring a trusted setup (depending on the variant used).

Per transaction, this approach exerts higher fees due to higher computational costs, but ZK-rollups turn this around by bundling many transactions into a single cryptographic proof. Ultimately, this reduces on-chain load and transaction costs.

In short, the purpose of Midnight is to act as a bridge between private and public ledgers, eliminating the exposure of on-chain transactions. The key to furthering that goal is Midnight’s Zswap ledger, which facilitates atomic token swaps.

After all, atomicity is crucial for cross-chain transfers between multiple token types and privacy layers. Overall, this makes Midnight Network a promising project. It is worth remembering that the ideal scenario for the crypto market to thrive is to create a cohesive blockchain ecosystem in which users seamlessly transact between different parts.

Midnight’s Ecosystem Rollout

At press time, Midnight listed 52 dApps across infrastructure, DAO, DeFi, wallets, NFTs, prediction markets, gaming, AI, and other areas that benefit from programmable privacy. As with many other crypto projects, Midnight is unrolling two types of tokens:

• NIGHT – native utility token for on-chain governance and ecosystem incentives, distributed to network participants securing the network. NIGHT is native to both Cardano and Midnight.
• DUST – unlike ETH, which pays for transactions across Ethereum dApps, NIGHT doesn’t serve that function. Instead, NIGHT tokens generate DUST, a renewable resource.
• As long as Midnight participants hold NIGHT tokens, they can use the generated DUST to execute free transactions, which is itself an incentive mechanism. DUST decays after generation (designating DUST address by NIGHT token holders), which prevents it from serving as a store of value.

The decision to go that route was driven by Midnight’s privacy focus, as DUST doesn’t leave a metadata trail like other single-token ecosystems. This also includes resistance to MEV manipulation.

In the Midnight tokenomics and incentives whitepaper released in June 2025, NIGHT token supply is limited to 24 billion, minted on Cardano and mirrored on the Midnight network.

This supply is hard-capped, which means greater demand for transactions will not expand it. Under the umbrella of Midnight Foundation, the subsidiary Midnight TGE is in charge of this tokenomics model, in addition to Treasury and Reserve.

Reserve serves to issue NIGHT tokens to the network’s block producers, marking them as uncirculated supply.

Ongoing Midnight Token Airdrop

Dubbed “Glacier Drop” for phase 1 rollout, the airdrop will run from July through August, delivering 50% (12 billion NIGHT tokens) to Cardano (ADA), 20% to Bitcoin (BTC), and 30% across Ethereum (ETH), Ripple (XRP), Solana (SOL), Avalanche (AVAX), BNB Chain (BNB), and Brave (BAT).

Every three months, 25% of NIGHT token supply is unlocked, with the total unlock reached after 360 days. Initially, NIGHT tokens are locked, becoming tradable gradually to avoid supply shocks. To encourage adoption, any crypto holders with a minimum of $100 across the aforementioned chains are eligible to claim NIGHT tokens.

After the Glacier Drop, two more claim phases will follow—Scavenger Mine and Lost-and-Found. Readers interested in this project should visit the official website and follow claim instructions via the NIGHT Claim portal.

The Bottom Line

Features such as atomic swaps, privacy, and cross-chain functionality have been pillars of the crypto space since the early days. Case in point: Komodo launched open-source AtomicDEX in mid-2019. However, Midnight Network appears to be a more comprehensive project by combining all three aspects.

More importantly, Midnight is tied to Cardano, which is still well-capitalized. Likewise, the legacy blockchain network is known to form relationships with various government entities and organizations. In early 2025, asset manager Grayscale filed to turn Grayscale Cardano Trust into a publicly traded spot ETF.

Without a hostile SEC with Gary Gensler gone, this makes for a more fertile ground for Cardano and its associated projects. In turn, both ADA and NIGHT enthusiasts should proceed with cautious optimism, aware of the risks, but not blind to the opportunity—especially when paired with insights from the highly-rated investment newsletters that help decode emerging trends.

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Cardano privacy-focused sidechain Midnight Network has opened the Claim Phase of its NIGHT tokens.

Dubbed “Glacier Drop,” this phase will distribute NIGHT tokens to eligible wallets across eight blockchain ecosystems, according to an August 5 announcement. The launch follows publication of Midnight’s tokenomics paper earlier this summer, which set out the network’s distribution model and role for NIGHT. 

Midnight stated that Glacier Drop will be a multi-phase, community-focused distribution intended to broaden access while resisting manipulation. 

After the current Claim Phase, a 30-day “Scavenger Mine” will let newcomers perform on-chain work for unclaimed tokens, and a four-year “Lost-and-Found” will enable late claims from original eligible wallets following mainnet launch.

Eligibility was determined by a June 11 snapshot. Wallets holding at least $100 in native tokens on Bitcoin, Ethereum, Cardano, Solana, BNB Chain, Brave, Ripple (XRP Ledger), or Avalanche can connect to the official claim portal and redeem an allocation. 

The window to claim remains open for 60 days, according to the project’s announcement and portal guidance. 

Midnight Foundation president Fahmi Syed stated: 

“This airdrop is a rethink of how value and access can be distributed across chains, communities, and use cases and is designed to resist manipulation and encourage long-term engagement.”

Participants can access the claim process via Midnight’s official Glacier Drop portal by connecting a qualifying wallet and following the non-custodial flow.

Tokens remain locked

Claimed NIGHT does not unlock immediately. Once the mainnet is live, tokens will enter a Redemption Period that releases holdings in four random “thaw” events over 360 days, a structure designed to smooth supply and reward longer-term participation. 

Midnight TGE, the entity responsible for the initial NIGHT distribution in line with the network’s decentralization plan, will administer the rollout. The team reiterated that users should verify they are using the official URL before connecting a wallet. 

Midnight positions itself as a privacy-first network that uses zero-knowledge proofs and selective disclosure to let users share data when necessary while keeping sensitive information protected. 

The project is being developed as a sidechain within the Cardano ecosystem, providing interoperability while targeting data-protection use cases.

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Cardano’s privacy-focused sidechain, Midnight, continues to make progress according to the most recent “State of the Network” report for March 2025. The update details recent progress, community insights, and new collaborations. While the protocol’s full launch is still a work in progress, the project’s growing ecosystem is already evident through hackathons, partnership announcements, and improved documentation.

What’s Up With Cardano’s Midnight?

The team emphasizes that while a protocol defines rules, the people participating in a network shape it from day to day. Between December 2024 and January 2025, Midnight gathered survey responses illustrating the community’s breadth. Twelve percent of participants identified themselves as blockchain developers, while thirty-nine percent described themselves as “seasoned pros” in blockchain. Forty-six percent rated themselves as “somewhat experienced,” and the remaining fifteen percent are still in the learning phase.

A recent highlight of Midnight’s development was the ZK Identity Challenge, which presented real-world applications of zero-knowledge (ZK) technology. One standout submission came from Brick Towers, a team led by Sergey Kisel and Imants Firsts, who showcased how Midnight’s smart contracts can protect consumer privacy in an online wine sales scenario. When a customer places an order, the transaction request is recorded privately on the blockchain. Instead of uploading identification documents, buyers generate a ZK proof based on their ID, verifying that they meet the legal drinking age without exposing unnecessary personal details.

If verification fails, the user is notified locally without revealing any on-chain data. When the proof is valid, the transaction finalizes, confirming on the ledger that the purchase was made, payment was completed, and the buyer satisfied the age requirement through a trusted identity provider. This solution lets merchants comply with regulations for selling age-restricted products without collecting or storing sensitive personal data. The result is a user experience that securely and seamlessly handles identity verification on-chain while preserving privacy.

Moreover, OpenZeppelin, known for securing more than $21 trillion in on-chain value, is now bringing its extensive experience to Midnight. The company is developing a Compact smart contract library, along with frameworks and starter applications tailored for Midnight. This collaboration provides developers with familiar yet robust tools and is expected to accelerate the creation and deployment of privacy-oriented decentralized applications (DApps) on the network.

idnight has also partnered with Zoniqx, which is introducing its enterprise-grade DyCIST (Dynamic Compliant Interoperable Security Token) framework to the sidechain. This move allows financial institutions and enterprise developers to construct secure, compliant real-world asset (RWA) tokenization solutions without overhauling their current infrastructure. By combining built-in compliance oracles, identity management, and the privacy features of Midnight, these applications can cater to industries dealing with assets such as real estate, private equity, insurance products, and carbon credits.

Midnight’s documentation portal has been significantly updated to help developers find exactly what they need. A new release overview page consolidates all details about each component, including summaries of recent changes and direct links to Docker images and Node packages. This overview provides deeper insights into new features, bug fixes, and upgrade instructions.

A network compatibility matrix has also been introduced to prevent integration or version conflicts. The matrix allows developers to verify which components, whether they are the Node, Indexer, Wallet SDK, or DApp APIs, will work smoothly together in any given release.

Despite steady strides forward, the full launch of Cardano’s Midnight Protocol is still in development. A testnet was launched in 2024. Midnight is intended to safeguard sensitive data by offering a multi-token model in which NIGHT tokens drive governance and DUST tokens enable shielded transactions.

It aims to unify the crypto ecosystem and foster widespread enterprise adoption. According to the team, DUST tokens will be available to retail users through a relatively light “mining” process called the Glacier drop, and a proportion of NIGHT tokens will be distributed to participants across various networks, including ADA holders.

At press time, Cardano traded at $0.6786.

Featured image from iStock, chart from TradingView.com

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Midnight Society, the studio behind the game Deadrop, has confirmed its closure after facing financial difficulties and internal turmoil.

The announcement came just days after employees were given a two-day notice that the company was shutting down. This closure follows the high-profile departure of co-founder Dr. Disrespect (Guy Beahm) in mid-2024 after allegations of inappropriate conduct.

Although the studio had initially expressed confidence about continuing development and releasing Deadrop in 2025, the lack of funding and staff cuts ultimately led to its closure.

Why is Midnight Society closing down?

Midnight Society’s closure is largely attributed to a lack of funding. The studio, which employed over 50 developers at its peak, struggled to secure sufficient resources to continue operations. In a post shared on X, Level Designer Brad Boice revealed that the team was given just two days’ notice before the shutdown.

Earlier statements from co-founder Quinn Delhoyo had suggested that Deadrop was on track for a 2025 release, but staff reductions in September 2024 and the inability to secure more funding signaled deeper financial instability. Despite these challenges, the studio continued to work on the game until this recent closure announcement.

The studio’s troubles were further compounded by the departure of Dr. Disrespect, who had been a key figure in promoting Deadrop. Beahm was dismissed from Midnight Society in June 2024 after allegations surfaced that he had inappropriate conversations with a minor. Although Beahm admitted to some of the claims, he later denied other allegations and revised his statements, which fueled controversy around his exit.

The studio initially claimed that his departure was amicable, but it quickly became clear that his removal had disrupted both the studio’s internal dynamics and its public image.

What’s next to Deadrop?

Many believed that the game’s future was uncertain without Beahm’s involvement, and the subsequent closure of the studio has only reinforced these doubts.

In the wake of the closure, Dr. Disrespect expressed frustration during a livestream, claiming that the situation had been poorly handled by the studio’s leadership and that the allegations against him were mishandled.

The end of Midnight Society has left Deadrop’s future unclear, with no indications yet as to whether the game will continue under new leadership or if it will be abandoned altogether.