Is This the Project That Will Revive Cardano?

There’s no point in denying it: Cardano’s native token, ADA, has been severely underperforming this cycle.

Bitcoin is once again sitting above $100,000, XRP has consistently held $2 since November, and other altcoins are gaining momentum (SOL, SUI, AAVE, ONDO, and various memecoins).

Even Ethereum is beginning to make a comeback, having recovered to within 50% of its all-time high (ATH).

Yet, ADA has barely moved. It remains more than 70% below its all-time high (ATH) of $3.05 in September 2021, when it had far less utility than it does now.

ADA/USD and ADA/BTC historical price chart.

Source: CoinGecko. Snapshot taken on May 18, 2025, at 09:20 BST.

However, there’s one project in particular that many Cardano enthusiasts have been discussing for over a year now: Midnight.

What is Midnight?

According to Charles Hoskinson in an ask-me-anything discussion (AMA) last November:

“It’s a metachain to augment all cryptocurrencies, instead of just a blockchain. The goal is to add private smart contracts. Currently, smart contracts are done publicly…If you imagine a company, some get to see HR files, payroll, and secret projects; most people don’t. There’s a private side, and there’s a public side.”

It’s seen as a privacy-focused sidechain closely aligned with Cardano, similar to Polygon’s role as an Ethereum-based sidechain and scaling solution, which also offers privacy features.

It also addresses the challenges of balancing data protection, ownership, and usage.

Midnight uses zk-SNARK (zero-knowledge succinct non-interactive argument of knowledge) technology, one of the most discussed types of privacy features across various networks.

In simple terms, it allows one party to confirm that they have a piece of information (for example, a password) without ever revealing it or having to communicate with the other party to verify this.

Check out this Where’s Waldo/Wally analogy from ChatGPT, which provides a breakdown of the zk-SNARK ideas.

This metachain is one of several projects spearheaded by Input Output Global (IOG), formerly known as IOHK, one of the three major entities behind Cardano’s blockchain.

Besides discussing Cardano, you’ll hear Hoskinson regularly cover IOG products as he is the CEO and a co-founder.

The project utilises TypeScript, an open-source programming language, for integrating smart contracts.

In what fields and applications can Midnight be used?

Here are some that come to mind:

Digital identity

zk-SNARKS can automatically verify sensitive information, particularly personal details, without disclosing them.

This appears to be one of the most suitable solutions to the dilemma many people and centralised entities face: How can users ensure that their details are secure when they are required to complete KYC/AML, which all regulated crypto exchanges and similar institutions are mandated to do?

Following the recent news about rogue non-US Coinbase employees or contractors being bribed to disclose sensitive customer data, the need for a private digital ID will become essential in the coming years.

Asset tokenisation

A September 2022 Boston Consulting Group report forecasts that the asset tokenisation sector could reach $16 trillion by 2030. Other sources providing more conservative estimates predict $2 — $10 trillion during the same period.

This is a vast range, but there is still enormous potential and opportunities to profit from this nascent industry.

As a result, Midnight, Cardano, and other chains will seek to capitalise on the opportunity and establish adequate infrastructure to meet the growing global demand for the fractionalisation of real-world assets.

Decentralised voting

At some point, we will have a consistently secure and reliable decentralised voting system to replace an outdated and inefficient practice of paper ballots.

While electronic voting already exists in a few cases, its usage is a drop in the bucket compared to where we’d like to be in future.

Whichever blockchain or similar distributed ledger system manages to pull this off will be highly profitable, particularly given the hundreds of millions or billions of dollars needed to run major elections successfully.

Last year’s US Elections were projected to cost $15.9 billion to run, so imagine the enormous cumulative taxpayer savings that could be achieved by spending significantly less than that while maintaining an impartial ballot system.

Check its aptly named Nightpaper for more information and related social media links at the end of this for Midnight updates.

Logo courtesy of Midnight brand hub.

This ecosystem relies on two utility tokens:

NIGHT: For governance, consensus participation and for staking rewards.
DUST: A “fuel” token used to run smart contracts and on-chain transaction fees, similar to gas on Ethereum.

This dual-token system has been around for years. Some blockchains that have adopted this setup include VeChain (VET and VTHO), Neo (NEO and GAS), and Theta Network (THETA and TFUEL).

One event that has drawn many people across the Cardano community to this project is the discussion about a NIGHT and DUST dual-token airdrop for ADA holders, a.k.a. the Glacier Airdrop.

According to a CoinDesk article published earlier this week, Hoskinson will be distributing these tokens to 37 million wallets across eight blockchains, exclusively for retail clients (nothing for venture capital firms).

Sidenote: There is a common misconception that Cardano doesn’t receive venture capital (VC) funding. It still does, through Emurgo Ventures, but it’s far less support than dozens of VCs for Ethereum, Solana, BNB Chain, Avalanche and other L1s.

As we approach the Glacier Airdrop date and get clearer details about it, I will update the information here.

Before continuing, there is an important question to consider: How will ADA’s price be affected by Midnight’s eventual mainnet launch?

If experience with other airdrops is anything to go by, such as the Flare token drop for XRP holders, or the Starknet token distribution last year, we’ll likely see a price spike as people rush to buy ADA before a potential snapshot date of wallet holdings, only to have a large chunk of people sell off tokens shortly after receiving them.

Fortunately, there’s a solution: spacing out the token distributions across several months to incentivise people to hold onto airdropped tokens to avoid selling en masse to make a quick buck.

Additional thoughts

So, is this the project that could bring Cardano and ADA back to life?

Unless Midnight proves to be successful, I doubt this will sustain an ADA price rise, at least not without other bullish catalysts such as an explosive market-wide bull run or a string of major Cardano partnerships soon.

Alternatively, we would need an explosive bull run that makes the previous ones look like child’s play, but don’t hold your breath.

Many are banking on this pulling an XRP, which quadrupled its price within weeks of the US Elections last November.

As ADA went from $1.05 in July 2021 to $3.05 in just two months, it’s a plausible scenario.

Part of me worries about the slow-and-steady approach to Cardano. While I understand this philosophy, it’s a risky approach, considering the fierce competition in this sector.

However, just because Ethereum remains the dominant smart-contracts platform and has enjoyed a first-mover advantage, with Solana emerging as one of its biggest competitors — a void that many expected Cardano to fill in recent years — it doesn’t mean that Cardano’s blockchain won’t succeed in the long run.

Every project requires funding to support its team of developers adequately, and people’s patience tends to wear thin after several years of stagnant or regressive prices.

Apple (AAPL) was on the verge of running out of money in 1997, when its rival, Microsoft, stepped in with a $150 million investment to rescue it.

So, even if a blockchain project were on the cusp of bankruptcy, never write it off.

While I’ve converted a sizeable portion of my ADA over the years (mostly into BTC and XRP), I still have the majority of my tokens and remain somewhat optimistic about Cardano’s prospects.

The consistent staking rewards, convenient non-custodial staking across multiple hardware and no lock-up period have incentivised long-term holdings, with over 70% of its circulating supply staked across ~3,000 pools.

Before we get ahead of ourselves, the push for private smart contracts on permissionless (public) blockchains is nothing new. Ethereum L2s utilise other forms of zero-knowledge (ZK) proofs, particularly rollups, which batch data from multiple transactions into one, rather than broadcasting the information individually.

Always consider what competing projects are doing (and how they’re faring) before potentially investing a significant sum into NIGHT.

Will Midnight be a long-awaited game-changer for Cardano, or is it overrated?

Ways to stay in the loop with Cardano and ADA

For Midnight updates, check out the following social media links:

Use the Midnight hashtag: #MidnightNetwork

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Disclaimers

• N.B. None of this is financial advice; I am not a financial advisor. This information is for educational purposes only. You are ultimately responsible for your investments.

• My opinions in this piece might not reflect those behind any news outlet, person, organisation, or otherwise listed here.

•Please do your due diligence before investing in any cryptocurrency assets, staking, NFTs, or other products associated with this space.

• BTC and ETH account for approximately 55% of my cryptocurrency portfolio, with XRP and Cardano (ADA) making up another 20%, followed by other altcoins.

Originally published at https://www.cryptowithlorenzo.com.