Cardano founder Charles Hoskinson has revealed a bold vision for Midnight, Cardano’s data protection-focused sidechain, saying it was “built for stocks on the blockchain.”
Speaking alongside Midnight CEO Eran Barak in a May 1 conversation, Hoskinson emphasized that full privacy, programmability, and interoperability are essential to bringing traditional equities into the blockchain era.
Midnight, developed by Input Output Global (IOG), uses zero-knowledge (ZK) cryptography to enable confidential smart contracts. Originally framed as a privacy-enhancing protocol, it’s now being positioned as a key infrastructure layer for real-world asset (RWA) tokenization, especially equities.
“You need a private side, full programmability, RWA standards, and trade across all blockchains and legacy exchanges,” Hoskinson said, underscoring what’s needed to onboard global stock markets.
Privacy ensures confidentiality for institutions, programmability allows for complex financial instruments, and interoperability enables seamless trading between blockchains and traditional financial platforms.
According to Hoskinson, this infrastructure opens access to a $10 trillion market today, with the potential to scale toward $100 trillion.
Anchored by Hybrid Blockchain Technologies
To achieve these goals, Midnight combines several technological frameworks drawn from other networks. Hoskinson explained that the protocol integrates consensus mechanisms inspired by Aptos, development components from the Polkadot SDK, and many features from Cardano itself.
In addition, the team drew insights from Zcash’s approach to privacy, incorporating zero-knowledge cryptography as a core element of Midnight’s architecture. This setup allows developers to create confidential smart contracts that prioritize both user privacy and legal compliance.
Midnight CEO Eran Barak highlighted this as a response to growing concerns about personal data sharing with artificial intelligence. Barak stated that the protocol is designed to allow AI to access private data without breaching ownership rights, offering a controlled, transparent framework for secure data interaction.
Meanwhile, Hoskinson also pointed to stablecoins as a primary use case for Midnight. These assets, he said, already account for over 73% of Ethereum’s economic activity and represent over $250 billion in total market size.
Midnight’s Institutional Collaboration
Midnight’s expansion also includes institutional collaborations. Hoskinson revealed that IOG recently joined the Confidential Computing Consortium under the Linux Foundation, aligning with firms such as Microsoft and Amazon. These organizations are exploring secure hardware enclaves and GPU-based systems for private AI computation.
A Multichain Network
The protocol’s launch has long been expected to impact the Cardano ecosystem significantly. In December 2024, Hoskinson confirmed that Midnight would make Cardano a multichain network by enabling interoperability with chains such as Ethereum and Solana.
Hoskinson also disclosed a partnership with Fairgate Labs to advance Midnight’s cross-chain vision. This development drew attention from the Cardano community, especially due to IOG’s earlier involvement with BitcoinOS.
Responding to inquiries from an analyst at Angry Crypto Show, Hoskinson clarified that Fairgate created the base technology for BitcoinOS. He also noted that Fairgate does not plan to issue a token, a subject that has caused friction between BitcoinOS and Cardano supporters.
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