Midnight opens mainnet to smart contracts: how private deposits on a public chain work

Midnight, the privacy-focused blockchain built as a partner chain to Cardano, now lets anyone deploy smart contracts on its mainnet. Until now, a contract first had to pass a security review on Midnight's Preprod test network before it could go live. That step is gone, and applications can also deploy contracts on behalf of their users. Midnight announced the change on its official X account on 2 October; its September "State of the Network" update describes the same switch.

It is the network's biggest step since it produced its genesis block on 30 March 2026. Blocks are still produced by nine federated partners, among them Google Cloud, Blockdaemon, MoneyGram, Worldpay, eToro and Vodafone's Pairpoint, rather than by an open set of validators. But with deployment open to everyone, Midnight's central idea gets its first real test: smart contracts that keep data private on a public chain.

How Midnight works

Two halves to every contract

Most blockchains are fully public: anyone can read every balance and every transaction. Midnight splits each contract's state in two. The public state lives on the chain, where anyone can see it. The private state stays on the user's own machine and, in the words of Midnight's documentation, "is never shared on-chain".

A zero-knowledge proof ties the two halves together. When you use a contract, your device computes a proof that your private change justifies the public change you are making (in other words, that you followed the contract's rules) without revealing the private data itself. Validators check the proof and then apply the public part of the update. They never see the private inputs. Midnight calls this model Kachina.

Private by default, public on purpose

Contracts are written in Compact, a language similar to TypeScript that compiles into zero-knowledge circuits. Compact treats privacy as the default. If a developer wants a private value to become public, by writing it to the public ledger, returning it from a contract function or passing it to another contract, they have to mark it with disclose(). Without that mark, the program does not compile. The documentation's summary: this "makes privacy the default and disclosure an explicit exception, reducing the risk of accidental disclosure".

Selective disclosure

Together, these two ideas give what Midnight calls selective disclosure. An application reveals only the information it needs to, to whoever needs it, instead of choosing between "everything public" and "everything hidden". In practice that means proving a fact, such as that a transfer follows the rules or that a balance covers a payment, without publishing the data behind it.

NIGHT and DUST

Midnight runs on two units. NIGHT is the network's public token. Holding NIGHT generates DUST, a shielded resource that is used only to pay transaction fees and that regenerates over time, like a battery. DUST cannot be transferred or traded, so paying fees doesn't use up your NIGHT and doesn't expose your wallet. Applications can hold NIGHT to generate DUST on behalf of their users, so people can use an app without paying fees themselves.

Monument Bank: real deposits on a privacy chain

The clearest example of what this is for comes from Monument, a UK-regulated bank. On 25 March 2026 it announced a partnership with the Midnight Foundation to tokenize retail customer deposits. Monument describes it as the first such move by a UK-regulated bank on a public blockchain.

The first phase covers up to £250 million. Each token corresponds one-to-one with pounds held at the bank. The deposits keep earning interest, stay redeemable in sterling, and remain protected by the UK's Financial Services Compensation Scheme (FSCS). Monument is aiming at "mass-affluent" customers with £50,000 to £5 million to invest. Later phases would add tokenized investment products and Lombard-style lending: borrowing against those investments.

Where selective disclosure comes in

A bank cannot put customer balances on a chain where anyone can read them. According to Midnight's announcement, transaction data is "shielded and accessible only to Monument Bank and its customers", while the deposits stay within UK banking protections and compliance rules.

Monument has not published the technical details of how it uses Midnight. But the model described above is built for this kind of split: the customer and the bank see the details, the rest of the network sees only proofs that each transfer follows the rules, and specific information can be revealed on purpose when it has to be.

The launch has slipped

The rollout is running late. In an interview published on 11 September, Monument founder Mintoo Bhandari said the first deposits had been expected about two months earlier. Launch is now planned for around November. The holdup is custody. Monument could not find a UK custodian that met regulatory requirements and also supported Midnight's zero-knowledge technology, so it turned to a provider based in Canada, which it still has to bring on board.

Still early

Midnight is young, and a few things are worth keeping in view. Block production is still federated. The next upgrades, private custom tokens and contracts that can call each other, are reported to arrive later this year. And in July, an exploit of Wanchain's third-party Cardano-to-BNB Chain bridge drained around 290 million NIGHT; the Midnight Foundation said the Midnight network itself was not affected.