#NIGHT Blockchain has always promised transparency and trust. But in finance, too much transparency is a danger. Sensitive data like balance, transaction history, and user identity must not be revealed. Midnight has created a new model with full privacy as a default, but with compliance possible through selective disclosure.
๐ง๐ต๐ฒ ๐๐ถ๐บ๐ถ๐๐ ๐ข๐ณ ๐ง๐ฟ๐ฎ๐ฑ๐ถ๐๐ถ๐ผ๐ป๐ฎ๐น ๐๐น๐ผ๐ฐ๐ธ๐ฐ๐ต๐ฎ๐ถ๐ป๐
Most blockchains, like Ethereum, have a fully public system. Each account reveals its balance, its history, and its connections. Over time, a complete financial picture of each account emerges, visible to everyone. Even with tools for privacy, only partial data remains hidden, not the full picture.
For financial institutions, this poses a major problem. Regulations demand transparency as well as confidentiality. Public blockchains fail to provide this balance, making them unusable for real-world finance.
๐ ๐ถ๐ฑ๐ป๐ถ๐ด๐ต๐โ๐ ๐๐๐ฎ๐น-๐ฆ๐๐ฎ๐๐ฒ ๐๐ฟ๐ฐ๐ต๐ถ๐๐ฒ๐ฐ๐๐๐ฟ๐ฒ
Midnight solves this with a hybrid system, with two layers. The public state contains proofs, smart contracts, and
๐ฃ๐ฟ๐ผ๐ด๐ฟ๐ฎ๐บ๐บ๐ฎ๐ฏ๐น๐ฒ ๐ฃ๐ฟ๐ถ๐๐ฎ๐ฐ๐ ๐ช๐ถ๐๐ต ๐๐ผ๐บ๐ฝ๐ฎ๐ฐ๐
Midnightโs smart contract language, Compact, has pushed this notion of privacy even further. Privacy is no longer optional; it is now a requirement.
๐ฆ๐ฒ๐น๐ฒ๐ฐ๐๐ถ๐๐ฒ ๐๐ถ๐๐ฐ๐น๐ผ๐๐๐ฟ๐ฒ ๐๐ผ๐ฟ ๐๐ผ๐บ๐ฝ๐น๐ถ๐ฎ๐ป๐ฐ๐ฒ
Midnight has now added the feature of viewing keys, which allows users to share information when they want to. Instead of full transparency, users now have control over what they want to share.
For example, an auditor may want to see the transactions, but they should not be shared with everyone. In this case, the user has achieved โrational privacy.โ
๐๐ฒ๐๐ถ ๐ช๐ถ๐๐๐ผ๐๐ ๐ ๐๐ฉ ๐ฅ๐ถ๐๐ธ๐
Transparency in DeFi is often exploited by traders. They are often front-run, meaning their transactions are visible even before they have been executed. Midnight has now solved this problem with the Zswap protocol.
๐ฃ๐ฟ๐ฒ๐ฑ๐ถ๐ฐ๐๐ฎ๐ฏ๐น๐ฒ ๐๐ผ๐๐๐ ๐๐ผ๐ฟ ๐๐ป๐๐ฒ๐ฟ๐ฝ๐ฟ๐ถ๐๐ฒ
Another
Midnight is not only improving the concept of privacy; itโs actually changing the way that financial systems can be built on top of blockchain. This is because itโs actually creating a system where compliance and confidentiality are no longer mutually exclusive.
In other words, this opens the door for institutions, developers, and users to finally use blockchain without compromising on data protection.
https://www.binance.com/en/square/profile/midnightnetwork#NIGHT @MidnightNetwork #FalconFinance