Privacy-preserving stablecoin liquidity on Cardano and Midnight through USDCx allows DeFi privacy and accelerates its implementation.
Weiss Crypto has backed the Midnight Network (NIGHT), a privacy-centric blockchain being built on the Cardano architecture, over older privacy coins like Zcash (ZEC). The company presented several arguments in support of this stance, which were based on architecture, cost structure, and usefulness to the user and developers.
One of the problems Weiss Crypto points to is that the privacy features of Zcash make the use of this technology more complex. Some disagreed with this, with one user pointing out, “…when you say transaction fee to migrate off-the-record to orchard, it is the same as any transaction on Zcash…”
Weiss believes that Zcash is inefficient due to the user experience and structural constraints that are inherited from the underlying layer of the Bitcoin blockchain. The company says that going forward, with the current emphasis on streamlining gas fees, platforms with additional steps or expenses to achieve privacy will lose out on user acquisition.
Weiss additionally observed that the use of a cloned Bitcoin infrastructure by Zcash brings programmability restrictions. This limits its capacity to develop its privacy capabilities for larger DeFi applications. Conversely, Midnight, a sister chain of Cardano, is a more customizable design suited to privacy-respecting smart contracts. This, according to Weiss, makes it more appropriate to scale private applications beyond simple payments.
The other benefit mentioned by Weiss is the dual-token architecture of Midnight, which it said allows more stable and predictable operating costs for developers and users. This is useful in ensuring reliability in the applications, particularly where cost certainty is a prerequisite to adoption.
Midnight has struck new partnerships lately, which are expanding its reach.. The COTI Foundation recently announced the integration of NIGHT with new privacy-native liquidity solutions, enabling cross-chain DeFi applications. Additionally, the proposed deployment of USDCx, a non-EVM and privacy-preserving stablecoin pegged 1:1 to USDC, into both Cardano and Midnight, will enhance stablecoin liquidity throughout the ecosystem. Charles Hoskinson noted this would enable quick rollout and expand access to Circle’s liquidity pool.
This is consistent with Weiss Crypto’s analysis that the interest in compliant, privacy-first infrastructure is on the increase, especially in jurisdictions with robust data protection laws, such as the European Union. Midnight’s design is concentrated on the sharing of only the required proofs instead of full sets of data, and as a result, it can be used in practice in digital IDs and other sensitive applications.
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