Midnight (NIGHT) Project Analysis: How Can We Say Goodbye to the Era of "Data Leaks" on the Blockchain?

When enterprises plan to record supply chain finance on-chain, they face a dilemma: how to enjoy the advantages of blockchain transparency and trustworthiness while protecting sensitive contract pricing and counterparty information from being fully visible to competitors?

This is precisely the core problem Midnight aims to solve. Unlike the “fully transparent” model of traditional blockchains, Midnight introduces a new paradigm known as “programmable data privacy.”

This technology allows enterprises and individuals to precisely control which data can be publicly verified and which data must remain encrypted, fundamentally addressing the risk of “data leakage” during on-chain interactions.

01 The Blockchain Privacy Paradox: The Difficult Balance Between Transparency and Protection

Current mainstream blockchains are built on the principle of openness and transparency, with every transaction and every smart contract state visible to every node in the network.

This transparency is the cornerstone of trust but also brings significant problems. Enterprises face a dilemma: adopting blockchain technology may mean exposing commercially sensitive information, such as supply chain details, counterparty identities, and contract terms.

The risk of data leakage is not limited to the commercial sector. When individuals use on-chain services, digital identities, asset holdings, and transaction histories may all become publicly accessible. This transparency is in direct conflict with increasingly stringent data protection regulations (such as GDPR).

Midnight’s Product Lead, Mauricio Magaldi, pointed out in an interview that public metadata can be used to correlate and infer transactions, thereby endangering the security of highly sensitive information. This is the core pain point that Midnight aims to address.

02 Core Technology: Zero-Knowledge Proofs and Dual-State Architecture

Midnight’s technical solution is built on two pillars: zero-knowledge proofs (ZK-SNARKs) and an innovative dual-state architecture.

Unlike fully anonymous “privacy chains,” Midnight works by separating public and private states. Sensitive data can be retained on the user’s local device (private state) instead of being entirely stored on the public blockchain.

When verification is needed, the system can generate a zero-knowledge proof to prove a statement is true without revealing the actual data. For example, a company can prove it has sufficient funds for a transaction without disclosing its specific account balance.

Technically, Midnight uses a TypeScript-based programming language, greatly lowering the threshold for developers to build privacy-protecting applications. This enables engineers familiar with traditional web development to transition smoothly into the Midnight ecosystem.

03 Dual-Token Economic Model: NIGHT and DUST

To support its unique data protection economic system, Midnight has designed a dual-token mechanism, with NIGHT and DUST fulfilling different roles.

NIGHT is the ecosystem’s governance and value-carrying token. It has a fixed total supply (3 billion units) and can be used for governance voting, earning network rewards, and as a tradable asset. As of December 9, 2025, the circulating supply of NIGHT is about 202 million, with a total market cap of approximately $2.14 million.

DUST is a utility token specifically used to pay for on-chain transaction and computation fees. Its unique feature is that it cannot be transferred or hoarded, functioning more like an energy unit that “powers” privacy transactions and decays over time after use. This design effectively prevents abuse of privacy services.

This separation achieves two goals: transaction privacy is ensured through DUST, while the long-term development and governance of the ecosystem are incentivized and maintained through NIGHT. Separating privacy functions from tradable assets also helps meet regulatory requirements in different jurisdictions.

04 Solving Real-World Problems: From Digital Identity to Compliant Finance

Midnight’s technical architecture is not an ivory tower but is designed for a series of real-world business and personal application scenarios.

In digital identity verification, users can prove they are above a legal age or meet certain credit thresholds without revealing full identity information. Enterprises can build systems that comply with “Know Your Customer” (KYC) requirements while minimizing the collection and storage of personal data.

For corporate finance and supply chains, companies can record transactions and contracts on the blockchain while selectively encrypting sensitive business terms and pricing information. This allows them to enjoy the immutability and auditability of blockchain without worrying about losing competitive advantage.

Healthcare data management is another key use case. Patients’ medical records can be securely stored on-chain, with only authorized researchers or healthcare providers able to access specific data under strict conditions.

In addition, anonymous voting systems, decentralized credit scoring, and intellectual property management are all areas where Midnight can provide solutions. The common thread in these applications is the need to balance transparency and privacy, verifiability and confidentiality.

05 Market Performance and Ecosystem Development

From a market perspective, Midnight (NIGHT) is currently priced at $0.0106 on Gate, with a 24-hour trading volume of about $6,430. Although the price is significantly lower than its historical high, the project is still in its early stages of development, and its value will be primarily reflected as technology adoption and ecosystem growth progress.

Midnight’s development is steadily advancing. The network has adopted a new consensus protocol called Jolteon, designed to achieve high throughput and sub-second block times. The project employs a phased rollout strategy, with a comprehensive nine-month testing period before mainnet launch.

According to the latest roadmap, a new phase called Kūkolu is expected in Q1 2026, at which point developers will be able to build applications in a stable mainnet environment.

Although it shares a founder with Cardano (Charles Hoskinson), Midnight is emphasized as an independent entity with its own unique technical specifications and use cases. This independence allows it to focus more on addressing data protection in this specific domain.

Future Outlook

When a medical institution considers migrating patient records to the blockchain, it faces an apparently unsolvable dilemma: how to achieve secure sharing and verification of medical data without exposing sensitive health information?

Midnight’s answer is to use zero-knowledge proofs, allowing hospitals to prove that patients have received specific vaccines without revealing their identities or full medical histories. This “selective disclosure” capability is reshaping our understanding of what’s possible with blockchain.

As the 2026 mainnet phase approaches, more developers will be able to use Midnight’s toolkit to build the next generation of data protection applications. In an era where data is increasingly regarded as a core asset, the ability to balance transparency and privacy may become the key inflection point for the widespread adoption of blockchain technology.