Which is a utility token designed to drive the dual-component tokenomics powering Midnight transactions, incentivize block production, and enable community governance and ecosystem development.

Midnight’s architecture delivers programmable privacy through zero-knowledge cryptography and NIGHT serves as the economic foundation that incentivizes, secures, and grows the network.

A key feature of NIGHT is its ability to generate DUST, Midnight’s shielded and renewable network resource. This unique mechanism creates a business-friendly system where transaction metadata is protected, ensuring privacy.

NIGHT generates DUST – Midnight’s shielded and renewable network resource – to create a sustainable and business-friendly system that also protects transaction metadata.

Genesis and supply

The NIGHT token exists as a multi-chain asset, being native on both Cardano (as a Cardano Native Asset) and Midnight. Unlike wrapped token representations, NIGHT maintains the same utilities and rights regardless of which chain it operates on, which serves as a foundation for the intended multichain functionality of Midnight.

There are 24 hours in a day, and the NIGHT token has a supply of 24 billion. One unit of NIGHT divides into one million subunits called STAR, providing precise denomination for various network activities. NIGHT tokenomics are designed to be disinflationary over the long term, with new tokens entering circulation from the network reserve at a gradually decelerating rate with each new block.

Resource generation: NIGHT-generates-DUST

NIGHT’s primary utility comes from generating DUST, the resource used as “gas” to execute transactions on Midnight.

Unlike most blockchains, where transaction fees require utility token expenditure, the Midnight doesn’t consume the NIGHT token to fund transactions. For example, executing transactions on the Ethereum network comes with a transaction fee cost in ETH. However, NIGHT generates DUST indefinitely, in a similar fashion to a renewable resource, such as wind power. This regenerative model means NIGHT holders can effectively use the network without depleting their token holdings (so long as their balance generates the minimum DUST required for transactions).

The amount of DUST generated per block is proportional to the size of its generating NIGHT balance, determining the transaction density (transactions per unit of time) available to a NIGHT holder. In other words, the more NIGHT held, the more DUST is continually generated to power transactions.

NIGHT holders can designate any DUST address as recipient, including addresses belonging to other users. Once generated, DUST can be used to sponsor one’s transactions or those of any other user. This flexibility allows for interesting use cases. For example: DApp operators who hold NIGHT tokens may choose to use their DUST generation to sponsor their users’ operations, effectively creating tokenless experiences that abstract the complexity of blockchain for the end-user.

Decentralized on-chain governance

Following the launch of the Midnight network, a phased approach is expected to be implemented to progressively decentralize the Midnight governance framework, expanding on-chain governance participation via the NIGHT token.

This approach aims to enable the creation and establishment of a comprehensive set of community-centric governance tools and processes, including the drafting and submission of proposals, Treasury access to fund such proposals, voting mechanisms, vote tallying, outcome communication, and automated protocol updates for proposals approved through governance action.

The governance framework will be designed to uphold high standards of security, and to ensure the integrity of the Midnight network while enabling remediation capabilities through decentralized means. The full specification and mechanics of such governance are expected to be detailed in a future document.

Funding ecosystem growth

The NIGHT token is expected to be used to fund ecosystem growth initiatives via on-chain Treasury. This Treasury is a pool of NIGHT tokens, belonging to the protocol and initially locked, whose purpose will be to fund Midnight network ecosystem growth activities and projects that are selected via the on-chain governance mechanics.

Neither the use of NIGHT for governance purposes nor the use of NIGHT from the on-chain Treasury to promote ecosystem growth initiatives will be available at mainnet launch. These functionalities are expected to be developed and implemented in the future.

Explore Midnight tokenomics and incentives

Midnight is building a future where data protection and network sustainability go hand-in-hand. Read the white paper for a deep dive into the NIGHT token and the Midnight tokenomics and incentives system.

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