Midnight Redefines Blockchain Privacy With Zero-Knowledge and Rational Design

As blockchain know-how matures, the trade faces a crucial problem: balancing transparency with privateness. Most public blockchains expose all transaction knowledge, creating dangers for enterprises and people. This rigidity has sparked debate about whether or not decentralization should sacrifice confidentiality.

Fahmi Syed, President of the Midnight Foundation, believes there’s a greater path ahead. During Token2049 Singapore on the important occasion venue, he outlined to BeInCrypto Midnight’s imaginative and prescient for “rational privateness.” Midnight’s strategy makes use of zero-knowledge-proofs-based good contracts to unlock selective disclosure: the flexibility to manage what you share, when, and with whom.

Please briefly clarify Midnight Network and the way it differs from different privacy-focused blockchains.

Midnight is a brand new layer one blockchain constructed on developments in zero-knowledge proofs. We’ve constructed a dual-state, public-and-private ledger structure that permits purposes to validate delicate knowledge utilizing cryptographic proofs. 

Through zero-knowledge proofs and purpose-built good contract disclosure mechanisms, people, firms, and machines can determine what they share, after they share it, and with whom they share it. This is what we name “rational privateness”—selective, programmable privateness that protects delicate knowledge by default whereas nonetheless enabling compliance and auditability when required.

Today, most public blockchains are clear or pseudo-anonymous, however pseudo-anonymity shouldn’t be privateness – over time, identities and wallets might be uncovered, tracked, or compromised.

How does your strategy differ from earlier makes an attempt so as to add privateness to public blockchains?

Public ZK chains began with the likes of Monero and Zcash. These privacy-focused networks showcased how zero-knowledge proofs might shield delicate knowledge, however as a result of their tokens acted as shops of worth, they raised compliance considerations for not solely regulators, however corporates who should adhere to KYC/KYB procedures.

The subsequent evolution was the rise in ZK rollups or ZK chains, which primarily aimed to scale blockchain transactions and later integrated some privateness options. But if you attempt to retrofit privateness, there’s all the time a danger of publicity.

At Midnight, we’ve baked privateness into the core of the community, providing you with the flexibility to guard delicate knowledge and metadata whereas remaining auditable on-chain. This basically lets you construct know-how and purposes that protect privateness with out sacrificing compliance.

What is Midnight’s mechanism that permits each privateness and compliance?

Private knowledge shouldn’t sit on a blockchain. The most beneficial use of personal knowledge is when worth might be derived whereas the underlying info stays underneath the proprietor’s unique management. One approach this may occur is by way of proofs and attestations. For instance, proofs of id, possession, or accreditation. These proofs operate like keys that gateway your entry into deeper ranges of a product, service or community. 

Today, helpful knowledge sits in silos, fully underutilised. What Midnight can do is convey such silos collectively to unlock shared worth, with out danger of publicity. Instead of sharing uncooked knowledge throughout networks, you’ll be able to present attestations, or proofs that allow untrusted events to function collectively in a trusted method. In this fashion, I see Midnight as a fact layer, by means of our good contracts, you’ll be able to enable disclosures or allow totally different events to validate info with out danger. 

With Midnight, you get to decide on what, when, and with whom you’re disclosing info to. People typically consider privateness as making an attempt to obfuscate or protect. We consider privateness is a beginning place for compliance. Privacy with selective disclosure will allow higher compliance.

Midnight makes use of a dual-component tokenomics system with NIGHT and DUST. What motivated this design selection, and how does it handle the financial challenges going through different Layer-1 blockchains?

The financial mannequin right now for many blockchains shouldn’t be solely complicated, it’s damaged. For instance, you might have a Samsung telephone, however you don’t pay on your Samsung telephone along with your Samsung shares. Why? Because your shares are an funding, your telephone is only a product that you just use, or “devour”.

Today in Ethereum, Cardano, Solana, and different L1s, the tokens you choose for funding functions are the identical belongings you employ to pay for transaction charges or “fuel”. This is counterintuitive – for instance, what occurs when the token value goes up in worth? Transaction prices enhance, particularly in periods of community congestion, that means you’re cannibalizing your funding simply to make a transaction, basically grinding the community to a halt. 

At Midnight, we’ve separated possession and utility from consumption. NIGHT is our native utility token that offers you possession and governance of Midnight. NIGHT generates DUST, which is a renewable, shielded useful resource. DUST doesn’t operate as a retailer of worth, because it decays inside seven days. Instead of paying for transactions with NIGHT, you pay with DUST, and for those who personal NIGHT, your provide of DUST will proceed to replenish. This mannequin ensures you’re not cannibalising your main asset simply to pay to make use of the community.

The Glacier Drop has attracted vital consideration in the neighborhood. Can you share its important goals and the way it helps Midnight’s imaginative and prescient?

We’re so assured in our know-how and its capabilities that we’re gifting away 100% of the token provide of NIGHT by means of a multi-phase distribution course of, beginning with the Glacier Drop, which is open to customers from throughout eight main blockchain ecosystems. If you had been holding a minimum of $100 value of BTC, ETH, ADA, SOL, AVAX, BNB, XRP, or BAT tokens in a self-custody pockets on the snapshot date, you’re eligible to come back and declare. The quantity of NIGHT you’ll be able to declare corresponds to your possession within the different eligible chains. The extra you may have there, the extra NIGHT you’ll obtain. Participants from every of those ecosystems have the chance to come back and declare earlier than we open this as much as anybody through the Scavenger Mine section. 

Scavenger Mine permits anyone from any ecosystem or stroll of life to assert a portion of the unclaimed tokens from Glacier Drop. Only after the top of Scavenger Mine is there a distribution to the Midnight Foundation, the on-chain treasury, and the on-chain reserves.

You just lately introduced a collaboration with Google Cloud. How does this partnership advance Midnight’s enterprise adoption objectives, and what does it imply for bringing conventional Web2 corporations into the blockchain house?

That’s proper, our collaboration with Google Cloud is bringing enterprise-grade infrastructure assist to our community, which can give establishments and others extra confidence to make the most of Midnight’s privacy-enhancing infrastructure. Through this partnership and others, tens of millions of customers and 1000’s of company purchasers are welcome to make the most of Midnight’s know-how to convey enhanced privateness performance to their merchandise and companies.

Can you elaborate on this partnership with a real-world instance?

A healthcare firm in Turkey with three million sufferers is at present working with us to discover how they will leverage blockchain infrastructure to generate proofs of their sufferers’ medical histories. Our technique is to start out with companions with barely decrease regulatory hurdles for proof of idea. Once we will show viability in a single space, we will lengthen it to a different. For instance, now we’re in conversations with a big hospital in California that’s trying to make use of Midnight for cross-clinical trials with different exterior companions. They need to shield delicate affected person knowledge, so that they’re taking a look at how Midnight can convey collectively totally different silos of medical historical past and data to attain higher outcomes for his or her sufferers and the medical trade as a complete, with out ever exposing the info on the chain.

Can you stroll us by means of Midnight’s roadmap from testnet to mainnet launch? What are the first milestones and objectives for the remainder of 2025 and past?

Our main objective for this 12 months is to finish Glacier Drop efficiently, launch our token, in addition to making ready for mainnet launch. From there, our focus will probably be on how we convey our know-how to market whereas nonetheless sustaining our path to decentralization. To construct institutional confidence, our technique is to launch with a consortium of federated nodes, made up of ten trusted companions operating validators, to offer the robustness, velocity, and scalability that’s wanted for enterprises to function securely and confidently. 

As we scale, by means of function releases, upgrades, and with companions bringing in additional transactional quantity, Midnight will progressively develop right into a decentralized ecosystem. To assist this, after we launch on mainnet, we’ll be operating an incentivized testnet in parallel to the federated mainnet. Eventually, the 2 will converge, and we are going to find yourself with a completely decentralized blockchain the place validation isn’t just from trusted companions, however from a wider group of 100 to 200 validators.

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