Charles Hoskinson, the founder of Cardano, has unveiled an ambitious vision for Midnight, Cardano’s sidechain focused on data protection, describing it as “built for stocks on the blockchain. ” During a discussion on May 1 with Midnight CEO Eran Barak, Hoskinson stressed that full privacy, programmability, and interoperability are crucial for integrating traditional equities with blockchain technology. Midnight, developed by Input Output Global (IOG), leverages zero-knowledge (ZK) cryptography to support confidential smart contracts. Initially introduced as a privacy-enhancement protocol, Midnight is now positioned as a foundational infrastructure layer for tokenizing real-world assets (RWAs), with a particular emphasis on equities. “You need a private side, full programmability, RWA standards, and trade across all blockchains and legacy exchanges, ” Hoskinson said, highlighting the essential elements for onboarding global stock markets. Privacy ensures confidentiality for institutions, programmability enables complex financial instruments, and interoperability allows smooth trading between blockchains and traditional financial platforms. Hoskinson estimates that this infrastructure grants access to a $10 trillion market today, with potential growth up to $100 trillion. Anchored by Hybrid Blockchain Technologies To realize these ambitions, Midnight integrates various technological elements from different networks. Hoskinson explained the protocol combines consensus mechanisms inspired by Aptos, development tools from the Polkadot SDK, and numerous features derived from Cardano itself. Moreover, it incorporates concepts from Zcash’s privacy architecture, embedding zero-knowledge cryptography as a fundamental component of Midnight. This enables developers to build confidential smart contracts that emphasize both user privacy and regulatory compliance. Midnight CEO Eran Barak noted that this approach addresses rising concerns about personal data sharing with artificial intelligence. Barak said the protocol is built to let AI access private data without compromising ownership rights, establishing a controlled and transparent framework for secure data handling. Meanwhile, Hoskinson identified stablecoins as a key use case for Midnight.

He pointed out that stablecoins already represent over 73% of Ethereum’s economic activity and exceed a $250 billion market cap. Midnight’s Institutional Collaborations The expansion of Midnight also involves partnerships with institutional players. Hoskinson revealed that IOG recently joined the Confidential Computing Consortium under the Linux Foundation, collaborating with companies like Microsoft and Amazon that are investigating secure hardware enclaves and GPU-based environments for private AI computation. A Multichain Network The launch of Midnight is expected to profoundly impact the Cardano ecosystem. In December 2024, Hoskinson confirmed that Midnight would transform Cardano into a multichain network by enabling interoperability with other blockchains such as Ethereum and Solana. Hoskinson also announced a partnership with Fairgate Labs to further Midnight’s cross-chain ambitions. This move attracted attention from the Cardano community, particularly given IOG’s prior engagement with BitcoinOS. Answering questions from an analyst on the Angry Crypto Show, Hoskinson clarified that Fairgate developed the foundational technology behind BitcoinOS. He also emphasized that Fairgate has no plans to issue a token, a contentious point that has sparked tension between BitcoinOS and Cardano supporters.