Cardano Founder Reveals Midnight Token Impact on ADA Ecosystem

Key Insights:

• Midnight (NIGHT) token daily volume outshines Cardano’s daily volume, reflecting strong uptake.
• Hoskinson squashes concerns that Midnight will undermine Cardano’s growth, predicts that it will 10X Cardano’s DeFi ecosystem.
• Midnight’s market cap bleeds over $700 million 2 days after peaking near $2 billion.

The Midnight token (NIGHT) had an exciting start, with its market cap rallying almost to $2 billion within days after its launch. This aggressive start raised concern in the Cardano community, with some seeing it as a big threat to ADA price.

The situation was further exacerbated by the fact that the Midnight token has been experiencing higher trading volumes than ADA. For reference, the Midnight token (NIGHT) had approximately $1.8 billion in trading volume at the time of observation.

In contrast, Cardano had about $417 million in trading volume at press time. Some reports indicated that some investors offloaded their ADA holdings in exchange for Midnight tokens.

Cardano founder Charles Hoskin reportedly addressed the matter, stating that NIGHT was not an ADA replacement. He also stated that Midnight was created as a privacy extension for Cardano.

The Cardano founder addressed the idea that Midnight might replace ADA. The Midnight token’s higher volumes suggest that it could take a large share of Cardano’s network activity.

Hoskinson expects Midnight to boost Cardano’s DeFi ecosystem by at least 10-fold.

Here’s Why Traders Are Flocking to the Midnight Token Over ADA

The Midnight (NIGHT) token is relatively new compared to ADA. Its recent performance reflected heavy liquidity inflows, which was indicative of renewed optimism in the Cardano community.

While ADA crypto has been around for years and already has a significantly higher market cap, the Midnight token had a much lower market cap, meaning it had room for growth with less friction.

Moreover, the Upcoming Midnight chain focuses on one of the biggest narratives of 2025. The privacy segment saw heavy liquidity flows, and top privacy coins recently experienced significant upside, even as the rest of the market tanked.

The Midnight token represents the latest addition to the privacy segment. This may have contributed to the excitement around the token earlier this month.

The NIGHT token launched earlier this month, but it rallied by over 1,000% within the first 2 weeks. Its market cap peaked at $1.94 billion on Monday, but it has since cooled down to $1.33 billion.

The $700 million cooling off since Monday indicates that the NIGHT token was already experiencing its first profit-taking wave.

Will the Midnight Token Undermine Cardano Price recovery?

ADA price maintained an overall downtrend this month. A continuation of its bearish trend, which has prevailed since August.

The Night token has no doubt grabbed attention, and ADA might be missing out because of this. News of the Midnight token launch barely had an impact on ADA price action.

ADA exchanged hands at $0.35 at press time. This meant that the cryptocurrency had already given up the gains achieved in November and partly in December 2024.

ADA is now trading near its 2023 lows, and demand has remained weak. It remains to be seen whether Hoskinson will be right about Midnight as a boost for Cardano’s DeFi ecosystem.

ADA’s recovery could be pegged on numerous factors, including the macroeconomic conditions influencing liquidity movements. Cardano has been aligning itself with some key narratives, such as real-world assets (RWAs) and tokenization. These factors may contribute to ADA’s recovery in 2026.