What’s Up With Cardano Sidechain Midnight? Update

Cardano’s privacy-focused sidechain, Midnight, continues to make progress according to the most recent “State of the Network” report for March 2025. The update details recent progress, community insights, and new collaborations. While the protocol’s full launch is still a work in progress, the project’s growing ecosystem is already evident through hackathons, partnership announcements, and improved documentation.

What’s Up With Cardano’s Midnight?

The team emphasizes that while a protocol defines rules, the people participating in a network shape it from day to day. Between December 2024 and January 2025, Midnight gathered survey responses illustrating the community’s breadth. Twelve percent of participants identified themselves as blockchain developers, while thirty-nine percent described themselves as “seasoned pros” in blockchain. Forty-six percent rated themselves as “somewhat experienced,” and the remaining fifteen percent are still in the learning phase.

A recent highlight of Midnight’s development was the ZK Identity Challenge, which presented real-world applications of zero-knowledge (ZK) technology. One standout submission came from Brick Towers, a team led by Sergey Kisel and Imants Firsts, who showcased how Midnight’s smart contracts can protect consumer privacy in an online wine sales scenario. When a customer places an order, the transaction request is recorded privately on the blockchain. Instead of uploading identification documents, buyers generate a ZK proof based on their ID, verifying that they meet the legal drinking age without exposing unnecessary personal details.

If verification fails, the user is notified locally without revealing any on-chain data. When the proof is valid, the transaction finalizes, confirming on the ledger that the purchase was made, payment was completed, and the buyer satisfied the age requirement through a trusted identity provider. This solution lets merchants comply with regulations for selling age-restricted products without collecting or storing sensitive personal data. The result is a user experience that securely and seamlessly handles identity verification on-chain while preserving privacy.

Moreover, OpenZeppelin, known for securing more than $21 trillion in on-chain value, is now bringing its extensive experience to Midnight. The company is developing a Compact smart contract library, along with frameworks and starter applications tailored for Midnight. This collaboration provides developers with familiar yet robust tools and is expected to accelerate the creation and deployment of privacy-oriented decentralized applications (DApps) on the network.

idnight has also partnered with Zoniqx, which is introducing its enterprise-grade DyCIST (Dynamic Compliant Interoperable Security Token) framework to the sidechain. This move allows financial institutions and enterprise developers to construct secure, compliant real-world asset (RWA) tokenization solutions without overhauling their current infrastructure. By combining built-in compliance oracles, identity management, and the privacy features of Midnight, these applications can cater to industries dealing with assets such as real estate, private equity, insurance products, and carbon credits.

Midnight’s documentation portal has been significantly updated to help developers find exactly what they need. A new release overview page consolidates all details about each component, including summaries of recent changes and direct links to Docker images and Node packages. This overview provides deeper insights into new features, bug fixes, and upgrade instructions.

A network compatibility matrix has also been introduced to prevent integration or version conflicts. The matrix allows developers to verify which components, whether they are the Node, Indexer, Wallet SDK, or DApp APIs, will work smoothly together in any given release.

Despite steady strides forward, the full launch of Cardano’s Midnight Protocol is still in development. A testnet was launched in 2024. Midnight is intended to safeguard sensitive data by offering a multi-token model in which NIGHT tokens drive governance and DUST tokens enable shielded transactions.

It aims to unify the crypto ecosystem and foster widespread enterprise adoption. According to the team, DUST tokens will be available to retail users through a relatively light “mining” process called the Glacier drop, and a proportion of NIGHT tokens will be distributed to participants across various networks, including ADA holders.

At press time, Cardano traded at $0.6786.