Regarding the latest trends of Cardano, I want to share some actual on-chain observations. The chain has recently been launching new projects and upgrade plans frequently, with the Midnight privacy sidechain being one of them, claiming to bring breakthroughs to the ecosystem through a dual ledger architecture and ZK-SNARKs privacy proofs. It sounds very promising, but looking at the actual data, it’s a bit embarrassing.

The number of active wallets has been continuously shrinking, which is the first signal. More painfully, there was a token swap incident some time ago—14.4 million tokens were swapped and directly evaporated worth $6 million. The fundamental reason behind this is quite clear: the ecosystem’s liquidity is severely insufficient. The total TVL is only $200 million, spread across dozens of small pools, which is vastly different from other mainstream public chains.

Network performance issues are also a long-standing topic. Node restart times have worsened from 2 minutes to 6 minutes, and low-spec nodes even need 36 minutes to complete a restart. Such performance bottlenecks are a significant hurdle for a public chain to overcome.

Midnight indeed has some ideas in its technical design—the selective disclosure privacy scheme is very attractive for DeFi scenarios. But technical innovation alone is far from enough. The lack of liquidity in the ecosystem and the insufficient user base are the harsh realities in front of us. Whether new projects can truly change the situation depends on subsequent actual adoption.