As blockchain technology matures, the industry faces the critical challenge of balancing transparency and privacy. Most public blockchains expose all transaction data, creating risks for businesses and individuals. This tension has given rise to a debate about whether decentralization must come at the expense of confidentiality.
Fahmi Said, chairman of the Midnight Foundation, believes there is a better way. At the main event venue of Token2049 Singapore, he outlined BeInCrypto Midnight’s vision of “reasonable privacy”. Midnight’s approach uses zero-knowledge proof-based smart contracts to unlock selective disclosure, or the ability to control what is shared, when, and with whom.
Please briefly explain how Midnight Network differs from other privacy-focused blockchains.
Midnight is a new layer 1 blockchain built on advances in zero-knowledge proofs. We built a dual-state public and private ledger architecture that allows applications to verify sensitive data using cryptographic proofs.
Through zero-knowledge proofs and dedicated smart contract disclosure mechanisms, individuals, companies, and machines can decide what to share, when to share it, and with whom. This is what we call “reasonable privacy”: selective, programmable privacy that protects sensitive data by default while enabling compliance and auditability as needed.
Currently, most public blockchains are transparent or pseudo-anonymous, but pseudo-anonymity is not privacy. Over time, your identity and wallet can be exposed, tracked, and compromised.
How is your approach different from previous attempts to add privacy to public blockchains?
Public ZK chains started with things like Monero and Zcash. These privacy-focused networks demonstrated how zero-knowledge proofs can protect sensitive data, but also raised compliance concerns for regulators as well as companies that need to follow KYC/KYB procedures, as the tokens serve as stores of value.
The next evolution was the rise of ZK Rollup or ZK Chain, which was primarily aimed at extending blockchain transactions and later incorporated some privacy features. However, any attempt to introduce privacy later always carries the risk of leakage.
At Midnight embeds privacy into the core of the network, providing the ability to protect sensitive data and metadata while maintaining on-chain auditability. This essentially allows you to build technologies and applications that protect privacy without sacrificing compliance.
What is Midnight’s mechanism for achieving both privacy and compliance?
Personal data should not be placed on the blockchain. The most valuable use of private data is when value can be extracted when the underlying information is under the exclusive control of the owner. One way this can happen is through proofs and demonstrations. For example, proof of identity, ownership, or certification. These proofs act like keys that gateway access to deeper levels of a product, service, or network.
Valuable data currently sits in silos and is completely untapped. What Midnight can do is bring those silos together and unlock common value without risking exposure. Instead of sharing raw data across networks, you can provide certificates, or evidence, that allow untrusted parties to work together in a reliable way. In this way, I think of Midnight as a layer of truth. Through smart contracts, you can authorize disclosure and allow different parties to verify information without risk.
Midnight allows you to choose when, what, and to whom your information is disclosed. People often think of it as an attempt to obfuscate or protect privacy. We believe that privacy is the starting point for compliance. Privacy through selective disclosure enables improved compliance.
Midnight uses a dual-component tokenomics system: NIGHT and DUST. What motivates this design choice, and how does it address the economic challenges faced by other layer 1 blockchains?
Currently, most blockchain economic models are not only confused, but broken. For example, you may have a Samsung cell phone, but you are not paying for your Samsung cell phone with Samsung stock. why? Stocks are investments, so a cell phone is simply a product that is used or “consumed.”
Currently, with Ethereum, Cardano, Solana, and other L1s, the token you choose for investment purposes is the same asset you use to pay transaction fees or “gas.” This is counterintuitive – for example, what happens when the price of a token increases? Transaction costs increase, especially during times of network congestion. This means wasting your investment just to make transactions, effectively bringing the network to a standstill.
At Midnight, we separated ownership and utility from consumption. NIGHT is the native utility token that provides ownership and governance for Midnight. At night it produces dust, which is a renewable and shielded resource. DUST does not act as a store of value as it decays within 7 days. Instead of paying for transactions with NIGHT, you pay in DUST. If you own NIGHT, your supply of DUST will be continually replenished. This model avoids cannibalizing key assets just to pay for network usage.
Glacier Drop is gaining a lot of attention in the community. Can you tell us about its main purpose and how it supports Midnight’s vision?
We are so confident in our technology and its capabilities that we are delivering 100 percent of NIGHT’s token supply through a multi-stage distribution process, starting with Glacier Drop, which is open to users across eight major blockchain ecosystems. If you held at least $100 worth of BTC, ETH, ADA, SOL, AVAX, BNB, XRP, or BAT tokens in your self-custody wallet on the date of the snapshot, you are eligible to come and claim. The amount of NIGHT you can claim corresponds to your ownership in other eligible chains. The more there is, the more NIGHT you can receive. Participants in each of these ecosystems will have the opportunity to come and claim their rights before making them available to everyone during the scavenger mine phase.
Scavenger mines allow people from all ecosystems and societies to claim a portion of unclaimed tokens from Glacier Drop. Distribution to the Midnight Foundation, on-chain treasury, and on-chain reserves will be made only after the end of the Scavenger Mine.
We recently announced a collaboration with Google Cloud. How does this partnership advance Midnight’s enterprise adoption goals, and what does it mean to bring a traditional Web2 company into the blockchain space?
Yes, our collaboration with Google Cloud provides enterprise-grade infrastructure support to our network, giving institutions and others more confidence in using Midnight’s privacy-enhanced infrastructure. Through this partnership and others, millions of users and thousands of business customers will be able to leverage Midnight’s technology to bring enhanced privacy features to their products and services.
Can you elaborate on this partnership with a real-world example?
A Turkish healthcare company with 3 million patients is currently collaborating with us to explore how blockchain infrastructure can be leveraged to generate evidence of patient medical history. Our strategy is to start with partners that have slightly lower regulatory hurdles for proof of concept. Once you have demonstrated feasibility in one area, you can extend it to other areas. For example, we are currently in discussions with a large hospital in California that is considering using Midnight for cross-clinical trials with other external partners. They want to protect sensitive patient data and are looking at how Midnight can integrate different silos of medical history and records to achieve better outcomes for patients and the healthcare industry as a whole, without ever exposing the data on-chain.
Can you walk us through Midnight’s roadmap from testnet to mainnet launch? What are the key milestones and goals for the rest of 2025 and beyond?
Our main goal this year is to successfully complete Glacier Drop, launch our tokens, and prepare for mainnet launch. From there, we will focus on how to bring the technology to market while maintaining a path to decentralization. To build trust in organizations, our strategy is to launch a consortium of federated nodes made up of 10 trusted partners running validators to provide the robustness, speed, and scalability that enterprises need to operate securely and confidently.
Midnight will gradually evolve into a decentralized ecosystem through feature releases, upgrades, and collaboration with partners that bring in higher transaction volumes. To support this, we run an incentivized testnet in parallel with the federated mainnet during mainnet launch. Ultimately, the two will merge to create a fully decentralized blockchain that is verified by trusted partners as well as a broader group of 100-200 validators.
