TL;DR
- Midnight blockchain will enable private DeFi for XRP assets.
- It uses selective disclosure to balance privacy with regulatory compliance.
- The plan aims to activate over $100 billion in idle XRP.
In a recent interview on the Scott Melker podcast, Cardano founder Charles Hoskinson confirmed work is underway to bring decentralized finance utilities to XRP. The plan will utilize Midnight, a privacy-focused blockchain built by Cardano. The system would enable confidential operations with assets from the XRP Ledger.
The technical concept relies on wrapping XRP for compatibility with the Midnight chain. This process creates a digital representation of XRP within the privacy-focused network. These wrapped assets could then interact with DeFi applications. Hoskinson noted these services would include lending and yield-generation opportunities.
Midnight Provides a Path for Regulated Privacy
Programmable privacy forms the core feature of Midnight. The chain uses cryptographic methods that allow for selective disclosure of data. Users and institutions can demonstrate regulatory compliance without revealing all transaction details on the blockchain. This approach aims to attract entities that require confidentiality but must also follow financial laws.
Hoskinson pointed out that over $100 billion worth of XRP remains in wallets without productive use. The integration with Midnight intends to offer XRP holders options to deploy that capital. Access to lending markets and other DeFi tools could mobilize a portion of that value.
The announcement formalizes a previous outreach
In December, Hoskinson publicly invited developers from the XRP Ledger community. The proposal involved collaboration at an academic summit hosted by the University of Edinburgh. The message emphasized interoperability between distinct networks, highlighting a preference for cooperation over rivalry between blockchain communities.
The proposed integration positions Cardano as a support layer for other networks. Midnight would not seek to replace the XRP Ledger, but instead complement its functions. For XRP holders, the main advantage lies in accessing utilities their native chain does not natively support. The Cardano ecosystem, in turn, would broaden its use case as infrastructure for confidential computation.
The project’s success depends on technical execution and market adoption. If realized, it would connect a considerable liquidity pool with decentralized financial applications. The development reflects a broader industry trend where projects seek to interconnect capital and functionality between independent blockchains.
