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Cardano founder Charles Hoskinson has voiced optimism that Midnight will significantly strengthen the network and expand its DeFi ecosystem tenfold.
He made the statement during a recent livestream, addressing concerns that Midnight could weaken Cardano’s core blockchain. In response, Hoskinson argued that simply making Cardano faster, cheaper, and more scalable will not drive mass adoption of the network.
He suggested that competing with networks like Ethereum and Solana requires more than incremental technical improvements. Moreover, Hoskinson stressed that even major upgrades such as Leios and Hydra may deliver only marginal user incentives, such as lower transaction fees and dramatic improvements in throughput.
However, he pointed out that these features alone are insufficient to convince users to leave established ecosystems like Ethereum and Solana to join Cardano.
In his view, users only migrate to a new platform when it offers something fundamentally different. This is where Midnight comes in for Cardano.
Midnight, a privacy sidechain on Cardano, offers programmable privacy, which is largely absent from mainstream DeFi today.
Midnight to Boost Cardano DeFi by 10x
Hoskinson believes that, rather than users leaving their existing ecosystems entirely, Midnight allows them to continue interacting with those ecosystems while gaining access to privacy-preserving features that Ethereum and Solana do not natively offer.
This privacy capability from Midnight could help create a new value proposition for Cardano DeFi, potentially boosting it by up to tenfold.
Notably, while Cardano has achieved significant breakthroughs in security and decentralization, the network still lags in DeFi activity. According to data from DeFiLlama, Cardano’s total value locked (TVL) is $178.98 million. This is significantly lower compared to Ethereum and Solana, which have around $70.09 billion and $8.57 billion, respectively.
With optimism that Midnight could boost Cardano’s DeFi activity by as much as tenfold, the network’s total value locked (TVL) could climb to around $1.78 billion. While significantly, the figure would still trail the levels currently recorded on Solana and Ethereum.
Tier-1 Stablecoin to Enhance DeFi Activity on Cardano
Meanwhile, Hoskinson expects Cardano’s DeFi activity to gain momentum next year, aligning with Midnight’s mainnet launch.
Beyond Midnight, he also believes that introducing a Tier-1 stablecoin to the Cardano ecosystem could further accelerate DeFi growth. Notably, he has confirmed ongoing discussions with Ripple about bringing its RLUSD stablecoin to Cardano.
Similarly, the Midnight Foundation recently revealed that it is finalizing a partnership to launch a privacy stablecoin on its platform, adding another potential catalyst for DeFi expansion.