Hoskinson Explains Why ADA Holders Benefit from Midnight Airdrop

• Midnight enhances Cardano apps’ privacy, giving ADA holders preferential access and the largest share of NIGHT tokens.

• Cardano’s UTXO system attracts Bitcoin capital, letting holders earn yield without selling assets.

• Privacy-preserving tools may extend to XRP and other assets, blending on-chain and off-chain infrastructure.

Cardano founder Charles Hoskinson urged ADA holders not to rush selling their tokens for NIGHT following Midnight’s recent airdrop. Speaking on the Dec. 21 Discover Crypto podcast, he clarified that Midnight does not compete with Cardano but instead strengthens its ecosystem.

Hoskinson described Midnight as “the ChatGPT of privacy,” emphasizing it provides a blockchain-to-blockchain infrastructure layer designed to enhance privacy in Cardano applications. Consequently, ADA holders gain preferential access to these developments and receive the largest portion of NIGHT tokens.

Hoskinson highlighted that Midnight primarily targets Cardano-native applications for early adoption. “Which ones do you think are going to adopt privacy first? Uniswap and PancakeSwap and all these giant things… No, it’ll be Cardano applications,” he said.

The reasoning, he added, is these projects need to attract users quickly, allowing them to leapfrog competitors. Additionally, Cardano itself secures Midnight, further ensuring that ADA holders indirectly benefit from the new network’s privacy tools.

Cardano’s UTXO Advantage for Institutional Bitcoin

Beyond privacy features, Hoskinson explained how Cardano could attract Bitcoin capital through its UTXO architecture. He stated, “When you look at Bitcoin… it’s going to go to the closest continent and the closest continent is Cardano because it’s a UTXO system.” This architecture allows institutional Bitcoin holders to generate yield on Cardano DeFi without selling their assets.

Consequently, value leakage from Bitcoin flows into Cardano’s ecosystem. Moreover, Hoskinson suggested that privacy-preserving yield tools could extend to other assets, including XRP, with Midnight designed to hybridize on-chain and off-chain infrastructure.

Hoskinson refrained from providing price forecasts for ADA, stating confidence only in Bitcoin due to institutional demand and long-term holding patterns. At press time, ADA traded at $0.36. He positioned Midnight as an infrastructural upgrade rather than a competing token, emphasizing synergy rather than replacement.