Cardano Founder Targets Crypto’s Three Demons With Midnight Network

Charles Hoskinson, the visionary behind Cardano, unveiled the Midnight network at Consensus 2025, aiming to combat what he calls the “three demons” of the cryptocurrency industry: privacy, economic fragmentation, and “Ponzonomics.” This new blockchain seeks to enhance user privacy, foster cooperative economics across different networks, and avoid speculative tokenomics through a unique airdrop strategy.

• Midnight network addresses privacy, economic fragmentation, and Ponzonomics
• Designed for interoperability with major blockchains
• Funded through self-investment and an anti-speculative airdrop
• Emphasizes community governance and adaptability

Hoskinson, also CEO of Input Output, has been meticulously crafting Midnight for six years. Recently, it was spun out into its own subsidiary, Shielded, marking a significant milestone in its development. Midnight is envisioned as a privacy-centric, multi-chain infrastructure that not only bolsters user privacy but also integrates seamlessly with major blockchains like Ethereum, Solana, and Cardano. This approach allows developers to leverage Midnight’s capabilities without the need to migrate assets, promoting a more cohesive blockchain ecosystem.

His critique of the industry’s current state is unapologetically sharp. “The number one demon is this concept of privacy… we overdid it,” Hoskinson remarked, highlighting the industry’s failure to effectively implement privacy as a fundamental right. Midnight aims to rectify this by embedding privacy as a core feature, utilizing advanced cryptographic techniques like zero-knowledge proofs to ensure transactions remain confidential yet verifiable.

The second demon, economic fragmentation, arises from the competitive “winner-take-all” mentality that Hoskinson believes stifles industry growth. He advocates for cooperative economics, where blockchains collaborate rather than compete. “It talks to Solana, it talks to Ethereum, it talks to Avalanche, it talks to Cardano, it talks to BNB and XRP and so forth,” he stated, underscoring Midnight’s ability to communicate across various networks. This interoperability is crucial for breaking down the silos that currently fragment the crypto space.

The third demon, “Ponzonomics,” refers to the speculative tokenomics that have plagued many crypto projects. Hoskinson’s solution is to eschew traditional funding models like venture capital or initial coin offerings (ICOs). Instead, he plans to self-fund Midnight and execute a massive airdrop, the Glacier Drop, targeting 37 million wallets across eight major chains. This airdrop will distribute NIGHT (the governance token) and DUST (a privacy-focused transaction token), aiming for a more equitable token distribution. “We didn’t do a VC raise… Instead of doing an ICO or venture capital, I’ll just spend my own money, build it, release it, finish, and do an airdrop,” Hoskinson explained, showcasing his commitment to a fairer economic model.

Community governance and adaptability are pivotal to any blockchain project’s success, according to Hoskinson. He points to Cardano’s on-chain treasury and community-driven roadmap as successful examples. “To be useful, you have to have good governance. To be useful, you have to be adaptable as a complex adaptive system and resilient and grow,” he emphasized, highlighting the necessity of a robust and engaged community.

Midnight’s potential applications span various sectors, including supply chains, voting systems, healthcare, and finance. By maintaining privacy while preserving the core attributes of cryptocurrency, Midnight could facilitate secure, decentralized systems that meet real-world demands. Hoskinson envisions Midnight not just as another blockchain, but as a tool for building a more private, cooperative, and sustainable crypto future.

While Midnight offers a promising solution, it’s essential to remain cautiously optimistic. Can it truly overcome the entrenched issues within the industry? Will its airdrop strategy effectively attract a diverse user base? These questions loom large, yet Hoskinson’s determination to tackle crypto’s three demons head-on is undeniable.

Key Takeaways and Questions

• What are the “three demons” of the crypto industry according to Charles Hoskinson?

  The three demons are privacy, economic fragmentation, and “Ponzonomics.”

• How does the Midnight network address these issues?

  Midnight enhances privacy, integrates with other blockchains to reduce economic fragmentation, and avoids speculative tokenomics through an airdrop strategy.

• What is the significance of Midnight’s interoperability with other blockchains?

  Interoperability allows developers to use Midnight’s infrastructure without migrating assets, promoting a more cohesive blockchain ecosystem.

• How does Hoskinson plan to fund Midnight, and what does this say about his approach to crypto economics?

  Hoskinson plans to self-fund Midnight and conduct an airdrop, reflecting his critique of speculative tokenomics and his commitment to a more equitable distribution.

• What role does community and governance play in the success of blockchain projects, according to Hoskinson?

  Strong community governance and adaptability are crucial for a project’s resilience and growth, as exemplified by Cardano’s success.

• What are some potential applications of the Midnight network?

  Midnight could support secure systems for supply chains, voting, healthcare, and finance, maintaining privacy while preserving cryptocurrency’s core attributes.

“The number one demon is this concept of privacy… we overdid it.” – Charles Hoskinson

“It talks to Solana, it talks to Ethereum, it talks to Avalanche, it talks to Cardano, it talks to BNB and XRP and so forth.” – Charles Hoskinson

“No matter how much money Microsoft spends, they don’t seem to be able to break up that Google search monopoly.” – Charles Hoskinson

“We didn’t do a VC raise… Instead of doing an ICO or venture capital, I’ll just spend my own money, build it, release it, finish, and do an airdrop.” – Charles Hoskinson

“To be useful, you have to have good governance. To be useful, you have to be adaptable as a complex adaptive system and resilient and grow.” – Charles Hoskinson