The creator of Cardano, Charles Hoskinson, has released Midnight Protocol. He is using this cross-blockchain privacy technique to attack Bitcoin and the XRP Ledger.

Midnight may help Cardano, but it may also improve the privacy of Bitcoin and XRP, according to Hoskinson. He thinks the technology can compete with the privacy tools available today.

Privacy solutions for regulatory compliance

The problem with XRP Ledger is that private transactions in decentralized finance that adhere to regulations are possible if Midnight connects to it. That may not sit well with traditional banks. Hoskinson believes that Midnight’s zero-knowledge proof technology could give Bitcoin the privacy that Satoshi Nakamoto initially desired.

Hoskinson talked about what this does for Cardano. He expects Midnight will pump up Cardano’s decentralized finance – more monthly active users, more transactions, higher total value locked.

“Adding Midnight to Cardano supercharges our DeFi ecosystem,” he said. In a December 27 post on X, he claimed it could multiply Cardano’s monthly active users, transactions, and total value locked by ten times. Cardano could be the first to market with large-scale privacy-focused decentralized finance.

The protocol’s programmability excites Hoskinson. While maintaining compliance, decentralized applications can manage privacy in a variety of ways. This differs from Hoskinson’s typical methodology. He is introducing other networks to the Cardano ecosystem. Midnight on XRP and Bitcoin should attract customers and funds from sources other than Cardano’s typical user base.

Institutional play: The $10 trillion RWA market

Hoskinson also spoke about tokenized real-world assets, which he estimates could grow into a $10 trillion market. He believes Midnight’s privacy framework is well suited for institutional investors.

At the same time, he sharply criticized traditional finance and permissioned blockchains such as the Canton Network, arguing that they fail to provide the level of privacy institutions actually require.

“There are no half measures or half technologies,” Hoskinson said. He’s arguing institutions need full privacy solutions, not the partial fixes permissioned blockchains offer.

His pitch is Midnight handles institutional demands better than what traditional finance companies use now. He mentioned successful rollout needs solid partners and active communities supporting the tech.

NIGHT token faces volatility despite growing interest

While Hoskinson promotes Midnight, the protocol’s token NIGHT has attracted speculators. Recent numbers show more searches for it on sites like CoinGecko, beating out Bitcoin and Ethereum. The token’s been trending on CoinGecko’s platform, which tracks what cryptocurrencies people look up most.

But since its debut, NIGHT has experienced considerable price fluctuations. The currency fell more than 80% to $0.08. Although sharp price swings are normal when a new cryptocurrency launches, they show just how unpredictable the market can be for early-stage technologies. Still, the drop hasn’t dampened interest in Midnight’s potential.

Many believe its privacy features could change how real-world assets are tokenized and how decentralized finance functions overall. Investors and industry watchers keep an eye on the token’s performance as it develops. Whether Hoskinson fulfills his commitments about cross-chain privacy and whether other blockchain networks truly implement Midnight as he plans are the true questions.

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