NIGHT, with a daily trading volume of nearly $10 billion, is actually coming from the "has-been" Cardano?

Original Article Title: "Token with Nearly $10 Billion in Daily Trading Volume, Actually from Cardano?"

Original Article Author: Eric, Foresight News

Recently, a token named NIGHT that was listed on Bitget, Binance, OKX, and Bybit at the beginning of the month saw a 24-hour global trading volume of over $9 billion, nearing $10 billion. Bybit even surpassed Binance in 24-hour spot trading volume thanks to NIGHT.

NIGHT was officially launched on December 9th, and according to CoinGecko data, the token's price rose from around $0.025 initially to nearly $0.0114 in less than two weeks, a more than 3x increase. Its Fully Diluted Valuation (FDV) even briefly exceeded $25 billion, placing it in the top 50 in market capitalization rankings. At the time of writing, NIGHT's price has dropped to around $0.08.

It's not surprising that a token listed on the major exchanges simultaneously would perform well, but what's interesting is that NIGHT is the token of Cardano's privacy sidechain, Midnight. It's truly unexpected for a project bearing both the "Cardano" and "privacy" labels to have such explosive growth.

What Makes Midnight Stand Out?

Midnight is a sidechain developed by Input Output Global (IOG, Cardano's parent company) with "programmable data protection" as its core selling point. It packages zero-knowledge proofs (ZKP) into a ready-to-use TypeScript API, allowing Web2 developers to achieve "selective disclosure" on-chain without needing to learn cryptography. The entire network is based on Cardano as the consensus base, Halo2 as the ZK backend, uses a dual-token model (NIGHT+DUST), and aims to first implement the enterprise's most crucial "data usability while invisible" and then gradually expand to scenarios like DeFi, RWA, and on-chain compliance identities.

Overall, there isn't anything particularly unique about it. The privacy tech leverages ZKP but doesn't natively shield privacy; instead, it turns privacy features into options to address practical needs.

IOG's initial plan to develop Midnight was to launch the testnet in November 2022, but it wasn't until nearly two years later in October 2024 that it was released. This indeed aligns with IOG's style, as it took almost 5 years from announcing that Cardano would introduce smart contracts to actually achieving it, with smart contract functionality being available only in September 2021 when the bull market was already cooling off.

In May of this year, Midnight established a foundation with Fahmi Syed, former CFO of Parity, the development team behind Polkadot, serving as chairman, marking the first step of the TGE. Just two days after the official announcement of the foundation's establishment, Cardano founder Charles Hoskinson revealed a plan to airdrop tokens to 37 million addresses on 8 major blockchains, stating that the airdrop is exclusively for retail investors and that VCs will not be involved in the project.

Perhaps what truly ignited market sentiment was Midnight's "grand airdrop." In addition to the airdrop, Midnight also partnered with Binance, OKX, and Bybit to distribute nearly 3 billion NIGHT tokens. This generous move, in stark contrast to the recently popular ICO model, has sparked a positive response in the market.

From the blockchain explorer, the initial holders of NIGHT's holdings, apart from the first three which may belong to IOG or Midnight Foundation, seem to be quite decentralized. According to data provided on the official website, the author estimates that tokens distributed through NIGHT's own airdrop, activities in partnership with trading platforms, etc., amount to nearly 1/3 of the total supply (24 billion tokens), truly living up to the term "generous."

Midnight's token is not limited to NIGHT alone but follows a dual-token model of "NIGHT+DUST." This rare design is not born out of some "fancy idea" but rather to ensure compliance with regulatory requirements. NIGHT can be used for participating in network governance, incentives, and generating another token, DUST, with NIGHT itself having no privacy features, supporting on-chain audits.

The DUST generated by holding NIGHT is used to pay transaction fees, playing a role similar to Gas. Furthermore, DUST is also used to pay for privacy fees, meaning that if one wishes to add optional privacy features to on-chain transactions, they need to pay DUST as a fee. DUST is automatically distributed to NIGHT holders' accounts with each block and will "decay" over time to prevent malicious hoarding and network attacks.

Therefore, NIGHT, Midnight's "equity," does not participate in on-chain transaction fee payments but solely exists as a governance token and to generate real on-chain fuel in the form of DUST. DUST itself is a "renewable resource" generated by NIGHT and will decrease over time, viewed as a resource rather than an asset from a regulatory policy perspective, thus meeting regulatory requirements worldwide.

Cardano to Invest Heavily in On-Chain Ecosystem Next Year

According to Cardano's roadmap, next year will be a year focused on driving on-chain activity.

First and foremost, Cardano will undergo a network upgrade to increase throughput to 1,000 to 10,000 TPS through parallel block processing and a layered architecture to achieve vertical scaling while maintaining security and decentralization. Next up is the launch of Midnight, the main topic of this article. Cardano believes that the release of Midnight will bring more DeFi activity and TVL through its optional privacy features. Additionally, the Cardano Treasury will allocate funds to support the native issuance of major stablecoins like USDT and USDC on Cardano.

Lastly, and perhaps most importantly in the author's opinion, Cardano plans to focus on interoperability, not just simple cross-chain compatibility, but enabling users from other chains to interact directly with DApps on Cardano by consuming the source chain's Gas token.

Recently, Cardano achieved atomic swaps between BTC and ADA through Fluid, not using a cross-chain bridge, wrapped tokens, or centralized custody, but by directly executing script-to-script transactions at the core protocol level. This approach is partly thanks to Cardano's UTXO accounting model. Two days ago, Cardano stake pool operators' interaction with Solana on X also confirmed this development direction.

Complementing the strategic and product plans is the investment of funds. The Cardano Foundation plans to increase its marketing budget by 12% and participate in events like TOKEN2049, Consensus, etc., while Venture Hub will invest 2 million ADA to support startups and ecosystem projects. Furthermore, the Cardano Foundation plans to inject tens of millions of ADA into DeFi on the chain to boost liquidity and attract institutional participation.

Thus, it appears that driving the price of NIGHT up may just be an appetizer for the series of plans Cardano has in store. By 2026, it might be worth paying attention to this project, which went live on its mainnet in 2017 and has been largely forgotten by the mainstream Web3 market.

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