1/ Forcing operations on a fully transparent public chain.
For example, Ethereum or Solana, when a company pays salaries or settles payments, the whole world can see right through it.
Competitors can write a simple web crawler and instantly deduce your core business secrets and upstream/downstream procurement prices, which is equivalent to commercial suicide.
Moreover, large whales build positions, and before the transactions are confirmed, they are preempted and sniped by MEV bot traps, resulting in unnecessary losses of tens of thousands of dollars due to slippage.
2/ Collision scam pure anonymous privacy coins
There are indeed many such projects that can achieve complete anonymity on-chain, but due to the inability to pass KYC/AML, they face the regulatory iron fist every day.
The effect presented is that Monero or Tornado Cash are delisted by major exchanges, founders are arrested, and Wall Street regulars want to enter but find they are too afraid to touch it, fearing being labeled as money launderers.
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Unlike traditional public chains that present "full exposure" or illegal privacy coins that are "fully opaque," compliance privacy side chains that emphasize "selective disclosure" have a natural advantage, protecting business secrets while being able to prove innocence during audits.
In other words, this is the best gift for traditional large capital that wants to enter the Web3 space for high returns but is constrained by compliance requirements. Not planning early would be a big loss.
But on the other hand, the technical threshold for privacy tracks is extremely high. Without an excellent underlying architecture, it's difficult to support trillion-level real business. Therefore, correctly understanding an infrastructure that integrates "compliance audit, absolute privacy, and developer-friendly" is crucial.
The Cardano ecosystem's @MidnightNetwork is among the best.
Of course, it's not because of the huge airdrop issued a while back that I think this way, but rather because the airdrop coincided with just being listed on Binance and the mainnet about to undergo a major update, which motivated me to write an article to introduce it.
Personally, I believe the best aspect of Midnight is its "data permission pre-processing."
Classifying on-chain data according to different audiences, rather than broadly categorizing it as either fully public or fully hidden, finally allows many Web2 companies with real landing needs to dare to move funds on-chain.
Midnight's core killer features include the following dimensions:
Zero-Knowledge Proof (ZK-SNARKs)
Selective Decryption (View Key mechanism, invisibility to the outside world under normal circumstances, but instant access to the ledger when necessary for SEC or auditing institutions)
Compact language (based on TypeScript, allowing Web2 front-end developers to jump in directly, significantly reducing the difficulty of traditional cryptographic development)
Institutional-level Dark Pools (fundamentally eliminating MEV sandwich bots)
Uncollateralized Credit Lending (proving asset compliance without exposing storage location)
RWA exclusive breeding ground (suitable for tokenized government bonds, multinational enterprise-level supply chain financial clearing and settlement)
Choosing to deploy business on a public chain with "default privacy and compliance visibility" is equivalent to building a one-way glass house for Wall Street bigwigs, where outsiders cannot see what is going on inside but can present evidence during compliance checks, making overall business operations safer and smoother.
Lastly, let's talk about the fee structure, which is truly an industry-first "dual-token conspiracy," designed based on its economic model:
Uses a dual-token system of NIGHT + DUST. NIGHT is used for investment and governance, while DUST is specifically for paying gas fees.
As long as you hold NIGHT, DUST will continuously be generated automatically. Interactions consume DUST, and the money earned incurs 0 wear and tear, with no loss of principal.
To be honest, compared to public chains with similar principles that can have transaction fees of dozens or even hundreds of U during a bull market, Midnight's mechanism with absolutely stable costs is really impressive.
Moreover, the entire network consensus is provided by the large SPOs of the Cardano mainnet, fundamentally eliminating the possibility of frequent downtimes or 51% attacks that some new public chains often face.
In short, I am truly studying Midnight and feel that its underlying logic is very strong, perfectly addressing my original pain points regarding the inability to comply with RWA tracks. Interested friends can give it a try.