## Cardano Sidechain Midnight Seeks Breakthrough Through "Two Token" Model and Aggressive Launch Strategy

Recently, the Cardano ecosystem has attracted market attention with ambitious development plans for the coming year. Notably, Midnight – Cardano’s secure sidechain – has made waves in the crypto community through a large-scale token issuance strategy.

### Midnight: From Concept to Market Event

Midnight is a sidechain developed by Input Output Global (IOG – the parent company of Cardano), focusing on "programmable data protection." The project was publicly announced in November 2022, but the testnet was only officially launched in October 2024. This reflects IOG’s development style – meticulous but slow, having announced smart contract deployment on Cardano for nearly five years before implementation.

Midnight transforms zero-knowledge proof (ZKP) into a ready-to-use TypeScript API, allowing Web2 developers without cryptography backgrounds to implement "selective disclosure" on-chain. The platform uses Cardano as the consensus layer, Halo2 as the ZK backend, and applies a unique two-token model.

### Why is the "NIGHT + DUST" model designed this way?

Midnight’s two-token model is not a random innovation but a compliance solution aligned with global regulations:

**NIGHT** – governance token
- Used for network governance
- Generates DUST tokens
- Not directly related to privacy
- Supports on-chain auditing

**DUST** – resource consumption token
- Created from holding NIGHT
- Pays for on-chain transaction fees
- Pays for security fees (if using optional security features)
- Automatically "reduces" over time to prevent malicious hoarding

This design helps Midnight comply with regulatory management in many countries, as DUST is considered a renewable resource rather than an asset, since it is created from NIGHT and continuously diminishes.

### The "Token Launch" Action Creates Market Effects

The atomic volume of the NIGHT issuance strategy reflects Cardano’s determination:

In May, Midnight established a private fund (led by Fahmi Syed, former CFO of Polkadot Parity). Two days later, Charles Hoskinson – the founder of Cardano – announced an airdrop to 37 million addresses across 8 major blockchains, emphasizing it was only for individual investors, with no VC participation.

In addition to the airdrop, Midnight partnered with major exchanges to distribute nearly 3 billion NIGHT. It is estimated that about 1/3 of the total NIGHT supply (24 billion tokens) has been distributed via airdrops and exchange collaborations.

### Market Reaction Surpasses Expectations

This strategy has triggered a strong market response. In early December, NIGHT officially began trading, with total network 24-hour volume exceeding $9 billion – an impressive figure for a new token.

**NIGHT Performance Data:**
- **Starting Price:** ~0.025 USD
- **Highest Price:** ~0.114 USD (more than 3x increase in less than two weeks)
- **Peak FDV:** Over $2.5 billion, ranking in the top 50 by market cap
- **Current Price:** $0.07
- **7-day Change:** -20.59%
- **24h Trading Volume:** $3.19M
- **Fully Diluted Market Cap:** $1.68B

Ownership distribution shows that Midnight is not overly centralized – aside from the three largest addresses which may belong to IOG or the Midnight fund, the rest are quite dispersed.

### Cardano Plans to Invest Heavily in On-Chain Ecosystem

Cardano’s 2025 roadmap will focus on boosting on-chain activity:

**Performance Upgrades:** Increasing throughput from 1,000 to 10,000 TPS through parallel block processing and layered architecture, expanding vertically while maintaining security and decentralization.

**Midnight Mainnet Launch:** Expected to bring more DeFi activity and TVL as optional security features are fully deployed.

**Support for Native Stablecoins:** The Cardano Foundation will fund the issuance of large stablecoins like USDT, USDC directly on Cardano.

**Breakthrough Interoperability:** Not just simple cross-chain, but enabling users from other blockchains to interact directly with DApps on Cardano using Gas tokens from their native chains. Last week, Cardano completed atomic swaps between BTC and ADA via Fluid, without bridges, using script-to-script low-level interactions.

**Financial Investment:** The Cardano Foundation increased its marketing budget by 12%, participating in events like TOKEN2049, Consensus. Additionally, it will invest 2 million ADA to support ecosystem startups and inject tens of millions of ADA into on-chain DeFi to increase liquidity.

### Outlook: NIGHT Is Just the Beginning

The surge of NIGHT is probably just a "appetizer" for Cardano’s ambitious plans. This project has long been overlooked by the Web3 market, but with a clear development roadmap and concrete financial investments, 2025 could be a turning point for the Cardano ecosystem. Especially with ADA’s current price at $0.40, questions about Cardano’s growth potential and sidechain projects like Midnight are more relevant than ever.