Midnight Launch Week

Hi, this is Charles Hoskinson from warm, sunny Colorado. Today is March 23rd, the week of the 23rd, and it shall be known as the Midnight Week. We're having a lot of fun and doing a lot of work as we methodically get Midnight turned on. This process takes quite a bit of time and effort, but this time around, we have a lot of partners, and I'm very excited about the collaboration with FNO operators and others. I wanted to make a video to talk about what's going on for the next few weeks and give everyone a sense of what it takes to land the shuttle.

Launching cryptocurrency is kind of like landing the space shuttle. If you remember back in the day, you'd have a badass pilot from the Navy or Air Force flying in at 30,000 miles an hour, somehow landing on a runway a plane does, and no one dies. It's truly extraordinary when you think about it, but they make it look pedestrian. When you launch a cryptocurrency, there's usually a process of guarded upstaging. There are layers to it.

In the beginning, there was the testnet, where you learn a lot and gain many ideas. Eventually, you break a lot of stuff. The goal of the testnet is to break and learn, training people—developers, SPOs, and others—to work with it. This ran for about a year, and we upgraded it many times. We demonstrated that we could hard fork, and developers had fun with it.

But at some point, you have to leave the nest; the bird has to be kicked out. If it doesn't die on the pavement, you get to a federated launch. You could go straight to pure decentralization, but that's a bad idea. Usually, the testnet goes to a federated launch. You have this concept of FNOs, or federated node operators.

This time around, instead of just Emurgo and Input Output, we have partners like Google Cloud and Telegram, MoneyGram, and others. These amazing operators run the network, making blocks, processing transactions, and initiating hard forks. Back in the Cardano days, during the Byron era, we had Orboros BFT with three entities: the Cardano Foundation, Emurgo, and IOHK, which later became IOG. It worked well. During the Shelley era, we had the incentivized testnet (ITN), and many of you learned how to be stake pool operators.

We transitioned gradually from Byron to Shelley using the concept of a D parameter. Midnight is a bit more complicated because it operates simultaneously on Cardano and has its own network. There's a relationship between the two networks: the value-carrying asset lives on Cardano as C-Night, while the operational asset lives on Midnight. Midnight has four address structures, a private and a public ledger, and a layered consensus algorithm with GRANDPA and BFT. Beefy is the Cardano bridge side.

There's a lot more going on under the hood, making this much more the space shuttle than when we launched Cardano. This week is the federated launch, which is basically the mainnet network turning on step by step. Every day, we have a go/no-go meeting based on feedback from the federated mainnet nodes. They provide us with a lot of testing vectors and checkpoints. The goal is to achieve a stable network.

Blocks are being made—your Genesis block, your next block—and it's guarded, meaning that transactions and dApp deployment are restricted. The aim is to ensure stable consensus; this is a mainnet, not a testnet, so ideally, no backseas. On the consumer side, you should start seeing dust generation. Happy times! You've seen the C-Night generation; the Cardano smart contracts' glacier drop period is over, and dust is starting to be generated.

This will be best represented by an update to Lace, where you'll be able to see that dust generation. Once we have a stable network and the FNOs like Google and Telegram are satisfied, we gradually lift the guard and start deploying waves of dApps. You go from just dust generation to Lace plus dApps, allowing you to start using some of these experiences. For the first generation, because it's brand new technology with many different address structures and ways to use it, there has to be tight synchronization between the two networks. You're looking for stable consensus and stable block generation in the mainnet environment.

As that stabilizes and everyone is happy, you go from guarded to less guarded, increasing the app count. The next few weeks are about getting that network turned on with our partners. We're going through a daily checklist and learning a lot along the way. Things are moving very positively. As we progress through the week, you'll see a Lace update, and next week, I expect that the guardedness will drop, and some dApps will get deployed.

This means you can use it; it's not a testnet; it's the mainnet. This will be systematically hard-forked like Cardano was, adding more capabilities through updates and hard forks. Right now, we're focused on achieving consensus and performance. We're verifying that Plonk and Halo 2 are working as expected. Compact is running; it's basically Zcash with smart contracts, which is pretty exciting.

Dust generation is complex but functioning correctly, and dApps can be deployed and interacted with. As we move along with the plan and receive heartbeats, we'll start seeing things like zkIR v3, composable contracts, and various optimizations. As we work through these updates, which happen quarterly, we launched the token in December, and now we have the federated mainnet. This dramatically expands the set of dApps possible on the system. We started with none, and now we're at federated mainnet v1, with more to come.

For stake pool operators, a natural question is when you'll get involved. That will occur during phase three. We're entering phase two with the federated mainnet right on schedule. Phase three will create an incentivized testnet for SPOs to start making blocks, similar to what Google and Telegram are doing now. If you were an ITN participant in Cardano, that's how it worked for you.

This will run in parallel with updates to the federated mainnet, much we did with Cardano in its early days, but the clock is running much faster this time. In parallel, we will begin governance experiments. Instead of running sequentially we did with Shelley and Voltaire, there will be some parallelism. These governance experiments will explore how we conduct voting and address many open questions. One issue with Midnight is that it was distributed with a glacier drop, which is a huge benefit because it brought in many people.

However, we need time for the community to self-select before turning on any governance functions. We need to see if people want to be good-faith members of the Midnight ecosystem or if they just want to dump their C-Night or be adversarial. We need time for an ambassador class to form. Once we have that, we can conduct governance experiments, and it will be a spiral that gradually becomes more complex over time. We will start doing some experiments and eventually move to a full-on chain governance model.

In this phase, we are most interested in dust generation and loading dApps to test the network and verify that everything works as we expect. We will continue to improve the developer experience, which will get significantly better once we have these elements in place. We're also excited about connecting Night Stream to the system, which must also connect with the Intense system. There's a lot to do over the next six to twelve months to gradually open up Midnight's capabilities. What's truly impressive is what's already been built; Midnight is running Kachina, Plonk, Halo 2, and Compact.

This is what's shipping with the federated mainnet, and it's the first time ever that you can have Zcash with smart contracts. Midnight is about triangles: abstraction, privacy-enhancing technology (PET), and smart compliance. The Midnight passport program will be the foundation of smart compliance and one of the two parts of abstraction. The account abstraction part is covered by Midnight passports, while the chain abstraction part is what Intense covers. The PET part we are launching now is the ZK side, and later, we will have the MPC plus TEE components, allowing for outsourceable computation off-chain, which we are doing with Google infrastructure and others.

Once we have the passporting system, we transition from a decentralized identifier (DID) to a selective disclosure system. This is similar to zk.me, for example. The triangle is something you turn on step by step, providing utility and rules for the entire system. Stability and resilience come from governance and decentralization, creating a spiral effect.

We started Midnight more than eight years ago. It left R&D two years into it, so for about six years, we've been building and driving ourselves absolutely insane. It is incredibly exciting to turn on Midnight this week. All signs point to success, and we knew that the week of the 23rd would likely be the week. It's exciting to see it happening.

Stay tuned from the Midnight Foundation; they control the final clock. I'm optimistic, and everything seems to be functioning as we thought it would. This is the most complicated cryptocurrency ever built. It is the first blockchain that allows you to keep a secret at scale for everyone, everywhere, and it's built for everyday people. Abstraction is not just about more complicated smart contracts; it's about usability.

It just works on your phone. You click a button, and it does what you want. You can trade regulated and unregulated assets within one framework. When you combine ZK, MPC, and TEE, you create a system that can prove properties everywhere, allowing everyone to bring their computer, making it infinitely scalable. We learned from all the Cardano governance and decentralization.

There are very few people who can land the space shuttle, but we know how to do it, and we're moving at a breakneck speed. Midnight is already one of the most traded tokens, with almost a billion dollars in volume today, and it's listed on Binance. With the large distribution from the exchange airdrops, scavenger hunt, and glacier drop, we have over a million users. It's easy to verify that because there's KYC on the exchange wallets. As we move out of equilibrium and stability with the federated launch, we will reach the next generation of contracts for the first time ever, allowing composability with private smart contracts, unlocking the entire world of Midnight DeFi.

We will have many announcements and updates at Consensus. It's been a lot of fun to watch everything turn on and evolve. The teams are tired; they've been working seven days a week for the past two months, productizing and transitioning the testnet to a mainnet. It's real, and it scares everyone. I've done this four times, and it never gets easier.

It's always terrifying, even if you don't show the fear. I'd like to thank the entire team and everyone who's been part of this journey. This has been an eight-year journey, with six years of engineering and two years of hard R&D to solve amazing problems like drafting the Minotaur paper or the Night Stream project or work with Kachina. This pursuit of brilliance and capability is remarkable. I want to thank all the people at the Midnight Foundation for putting in the midnight oil, all the partners and collaborators, and the FNO operators.

I also want to thank all the Input Output employees throughout the years, some of whom are no longer here but were part of this journey. I remember fondly when we were using Scala, not Rust, with our own framework, and Brian McKenna was the product manager. That mattered just as much then as it does now because we learned a lot along the way. This will push the space forward. The magic of Midnight is that we're giving privacy in a safe way to the masses, continuing what Satoshi promised.

For the first time, artificial intelligence agents will be first-class citizens. When you have a ZK, MPC, and TEE system, you're building a proof system and the language of agents. The language of AI is not verbal; it's proofs. When agents meet, they don't have nonverbal communication or human trust structures. If Agent A asks for something, Agent B will say, "Prove it to me.

" A ZK system allows you to do that at scale. By combining it with multi-party computation and confidential computing, you create a system that can scale for all these different things. There will be trillions of agents running on the web every year, and Midnight creates the fabric for them to work together and participate in commerce. When you think about it, you want to tell people what you want to do, and someone has to figure out how to solve that. The solver right now is a smart contract or a human, but in the future, it will be artificial intelligence, and in many cases, you will own it.

You will have an NFT that represents it, so that AI needs to enter into the pits with all the other AIs, requiring proofs to trust everything. That's effectively what Midnight is doing at scale, with all the rules you and others set to ensure safety. It's quite timely and fortuitous that after all this work and research, we inadvertently created the best framework in the world for agents to live and get things done. However, we have a lot of work to do. This is a massive step forward, but there's much more to accomplish.

We will maintain our cadence and quarterly iterations and upgrades. There's a lot more to do and upgrade. Play around with what you see and enjoy it. Your first touchpoint will be the dust generation, and shortly thereafter, you'll see those dApps. It's guarded, just like Aztec and others are doing; it's best practice.

Don't overdo it; get it out, make those blocks, ensure consensus, and keep moving forward. Gradually lift the guard, turn it on, and fork by fork, increase the expressiveness of the system. On behalf of Input Output Group, allow me to be the first to welcome Midnight. Remember, while I am Norwegian, I'm also Italian. Every single thing we do in Italy, we do with love.

We love all of you and thank you for allowing us over these last eight years to share our passion with you. Welcome to the fourth generation of cryptocurrencies. Blockchains can now keep a secret, and because of that, blockchains become mainstream. Thanks, everyone. I'll see all of you soon.

Cheers!