Cardano’s Midnight Tokenomics Revealed: NIGHT and DUST Power New Privacy Network

Charles Hoskinson has unveiled the long-awaited Midnight tokenomics whitepaper, introducing two key components: the NIGHT token and DUST, a privacy-focused utility resource. Built on Cardano, NIGHT has a fixed supply of 24 billion tokens and functions as both a governance asset and the generator of DUST, a shielded resource used to power transactions across the Midnight network.

Unlike typical gas models, users do not spend NIGHT to cover fees. Instead, simply holding NIGHT passively generates DUST, offering predictable utility regardless of market volatility. This design turns NIGHT into a source of network energy, not just a speculative asset.

The distribution of NIGHT kicks off with the “Glacier Drop,” a free airdrop to selected users from major blockchains including Cardano, Ethereum, Bitcoin, and Solana. Unclaimed tokens can be earned in the “Scavenger Mine” by contributing computing power. A final “Lost-and-Found” phase allows missed claims to be recovered. Claimed tokens unlock over 360 days post-mainnet, with a 90-day redemption window.

Midnight’s block rewards will use a decelerating issuance model governed by an on-chain reserve pool. Initially, no rewards will be distributed to early block producers. Over time, Cardano Stake Pool Operators (SPOs) will be eligible to earn NIGHT through a blend of fixed and usage-based incentives.

This framework aims to create a new cross-chain privacy economy while maintaining ties with Cardano through a secure, double-counting-resistant bridge. With NIGHT and DUST at its core, Midnight proposes a parallel decentralized system that could redefine privacy and utility within Web3. The impact on Cardano (ADA) and its broader ecosystem remains a topic of speculation.