Charles Hoskinson Proposes Midnight Protocol As Privacy Layer for Bitcoin XRP

TLDR

Table of Contents

Midnight Protocol offers cross-chain privacy for Bitcoin and XRP Ledger.
Hoskinson claims Midnight can boost Cardano DeFi users and TVL.
Privacy design supports tokenization of $10 trillion in real-world assets.
Midnight’s native token NIGHT shows growing market interest despite volatility.

Cardano founder Charles Hoskinson has introduced the Midnight Protocol as a potential privacy layer for Bitcoin and XRP. Hoskinson presented Midnight not just as an extension of Cardano, but as a tool that can offer private transactions and programmable privacy features to other blockchains. This proposal aims to expand privacy and DeFi capabilities beyond Cardano’s ecosystem.

Midnight Protocol Overview

Hoskinson explained that Midnight could function as a shared infrastructure layer for multiple blockchains. He emphasized that the protocol can provide private and compliant financial transactions, which could be integrated into networks like Bitcoin and XRP Ledger. “Adding privacy to Bitcoin aligns with Satoshi’s original vision,” Hoskinson said. He also suggested that XRP’s DeFi network could benefit from enhanced privacy through Midnight.

Going after that 10 trillion dollar RWA market. There are no half measures or half technologies. You need an end-to-end strategy, great partners, and great communities.
You can't fake Cardano or XRP Nation.
— Charles Hoskinson (@IOHK_Charles) December 26, 2025

The protocol is designed to support large-scale decentralized finance (DeFi) operations. It includes features for private transactions and secure smart contract execution. Hoskinson believes that such features could attract more users to the Cardano network while enabling privacy-first applications across other blockchains.

Potential Benefits for Cardano and Other Networks

Hoskinson stated that Midnight could increase Cardano’s DeFi activity by introducing privacy-focused applications. He noted that monthly active users (MAUs) and total value locked (TVL) in Cardano’s ecosystem could rise with private DeFi offerings. “We expect Midnight to be first to market with scalable private DeFi,” he said.

For Bitcoin, Midnight could allow private transfers while maintaining public transparency where required. Hoskinson indicated that these privacy capabilities would enable users to transact without exposing sensitive information. In XRP, Midnight could support private decentralized finance operations, potentially making the network more competitive with traditional finance systems.

Privacy Design and Real-World Asset Tokenization

Hoskinson also discussed Midnight’s design in the context of tokenizing real-world assets. He noted that the protocol could handle complex financial instruments privately. “The estimated $10 trillion market for tokenized assets requires a privacy-first approach,” he said, highlighting the limitations of permissioned solutions like the Canton Network.

The protocol is structured to allow secure and compliant financial operations. By offering privacy at the transaction level, Midnight could enable financial institutions and developers to explore decentralized finance while protecting sensitive data. Hoskinson sees this as a key step for bridging traditional finance and blockchain networks.

Market Interest and Native Token Activity

Interest in Midnight’s native token, NIGHT, has grown alongside the project announcement. Hoskinson mentioned that the token could provide utility within the Midnight ecosystem, supporting private transaction and DeFi operations. Despite recent volatility, speculative interest in NIGHT has increased as the protocol moves closer to public deployment.

The development signals a broader strategy to extend Cardano’s reach. By proposing Midnight as a privacy layer for Bitcoin and XRP, Hoskinson aims to access liquidity and users beyond the Cardano network. This move could influence blockchain privacy standards and DeFi adoption across multiple networks.