Key Insights
- •Cardano has experienced a 21% decrease this month and a 54% decrease this year, coinciding with the launch of its new privacy coin, Midnight.
- •Midnight introduces the NIGHT and DUST tokens to position Cardano within the privacy coin sector.
- •Traders are evaluating whether this strategic shift represents genuine growth for Cardano or is primarily an effort to maintain relevance.
Cardano's New Privacy Focus Amidst Market Challenges
Cardano has launched Midnight, a new blockchain designed to support private transactions. This development occurs at a time when the value of ADA, Cardano's native token, has fallen by 21% this month and 54% over the past year. Consequently, many traders are questioning if Cardano's embrace of the privacy coin concept is a genuine attempt at growth or merely a tactic to regain attention in a competitive market.
Midnight introduces new tokens and operational rules, aiming to position Cardano within a trending market segment. However, the timing of this launch has led to speculation about whether the move is primarily driven by a need to stay visible.
Can Midnight’s Privacy Coin Outlook Boost Cardano?
For an extended period, ADA has shown weak performance compared to other major cryptocurrencies. This lack of robust recovery has led to perceptions that Cardano lacks a clear and compelling narrative. Even Charles Hoskinson, a co-founder of Cardano, acknowledged that the platform lagged in areas such as branding, partnerships, and decentralized finance (DeFi) activity, issues that have persisted for some time.
The introduction of Midnight offers Cardano a new strategic direction. Privacy-focused cryptocurrencies, such as Zcash and Dash, have performed well in the current market cycle, and there is a growing demand from users for private transactions that still adhere to regulatory guidelines. Midnight allows Cardano to participate in this trend without converting ADA into a full privacy coin.
Midnight operates with two distinct tokens: NIGHT, which serves as the primary token, and DUST, used to facilitate private transactions. NIGHT has a fixed supply of 24 billion tokens. The NIGHT token gradually generates DUST over time, and DUST is subsequently burned after use. While NIGHT remains publicly visible, DUST obscures certain transaction details, such as the sender and receiver, thereby maintaining a balance between public and private activity.
How Midnight Works
Midnight, developed by Cardano, does not aim to hide all transaction data. Instead, it selectively conceals specific elements of transactions. The NIGHT token remains public to ensure compliance with regulatory frameworks.
The DUST token, which is private, is utilized for sending private messages or executing private smart contract actions. This approach has garnered favor among some users who appreciate that they do not need to repeatedly purchase fee tokens, as DUST is generated from NIGHT. However, others have expressed reservations, finding the system overly complex and potentially confusing for mainstream users. Furthermore, DUST does not have a fixed supply limit, meaning its value is directly tied to the network's usage.
NIGHT was listed on numerous exchanges on its debut day but experienced a decline of over 50% shortly after launch, leading to uncertainty among traders regarding the long-term strategy. Despite this initial dip, both NIGHT and ADA quickly became trending tokens on CoinMarketCap, indicating significant market interest.
Cardano also announced over 100 partnerships associated with Midnight. Some ADA staking pools have begun supporting Midnight, enabling users to earn both ADA and NIGHT, thereby increasing network activity.
Midnight on Cardano: Real Utility or Just Attention?
The central question revolves around whether Midnight represents a genuine advancement for Cardano or is simply an attempt to capitalize on a popular trend following a challenging year. Privacy coins are currently experiencing high demand in 2025, driven by user interest in private transactions. However, concerns about regulatory compliance remain a significant factor. Midnight seeks to strike a balance between these two aspects.
With NIGHT remaining public and DUST offering partial privacy, Midnight distinguishes itself from established privacy coins like Monero and Zcash. Cardano's need for a new direction is evident, given ADA's prolonged period of weakness. Midnight provides the network with new functionalities and has reignited some interest. Nevertheless, the substantial drop in NIGHT's value on its launch day and the timing of its introduction have raised doubts.
It is currently too early to definitively assess whether Midnight will contribute to Cardano's growth. The coming months will be crucial in determining whether Midnight gains sustained user adoption or if this initiative proves to be a short-lived trend.
While the privacy coin narrative is currently strong, Cardano must demonstrate tangible utility beyond mere discussion to solidify its position.