Cardano’s Midnight Blockchain: Strategic Expansion or Internal Competition? TapTools Breaks It Down

Cardano's new privacy-focused blockchain, Midnight, sparks debate: Is this a natural evolution or a threat to its own ecosystem?

TapTools analysts dissect the implications—weighing technical merits against potential fragmentation risks.

Meanwhile, crypto VCs quietly reposition their bags—because nothing says 'decentralization' like pre-mined institutional allocations.

TLDR

• Alex Yue, co-founder of TapTools, clarified that Midnight is built on top of Cardano and not a competitor.
• Yue emphasized that every transaction on Midnight anchors to Cardano’s main chain for added security.
• Midnight expands Cardano’s capabilities by offering privacy-focused features like private smart contracts and confidential data processing.
• Jason Appleton from Crypto Crow echoed Yue’s sentiments, stating that Midnight is meant to complement Cardano, not replace it.
• Charles Hoskinson refuted claims of competition, calling Midnight “the second kid” and reaffirming Cardano’s position as the primary blockchain.

Alex Yue, co-founder of the Cardano-based analytics platform TapTools, clarified that Midnight is an extension of the Cardano network, not a competitor. Yue’s statement came in response to growing concerns within the Cardano community, where some users have suggested Midnight could rival the Cardano blockchain. He emphasized that Midnight is built on Cardano’s infrastructure and is designed to complement it, not replace it.

Midnight is Built on Cardano, Not Competing with It

In a recent post on X, Alex Yue addressed misconceptions about Midnight. He stated,

“Midnight is not a competitor to Cardano, it is built on top of Cardano.”

Yue explained that Midnight leverages Cardano’s robust infrastructure, ensuring that it remains securely anchored to the cardano blockchain. He stressed that Midnight’s purpose is to enhance the Cardano ecosystem, particularly in the realm of privacy and confidential data processing.

People think Midnight is competing with Cardano.
It isn’t.

It’s being built on top of Cardano.

Every Midnight transaction ultimately anchors to the Cardano main chain, secured by the same consensus that powers $ADA.

Midnight expands what Cardano can do by bringing private… pic.twitter.com/7wsRgFlWaW

— Alex (@Alex_ADA_) November 8, 2025

Yue further clarified that every transaction on Midnight is linked back to Cardano’s main chain. This setup ensures that the privacy-enhanced features of Midnight do not compromise the security of the network.

“The consensus mechanism that powers ADA also secures Midnight,” Yue added.

This connection ensures that users on Midnight can still benefit from Cardano’s decentralized and secure environment while enjoying additional privacy features.

Hoskinson and Yue Confirm Midnight’s Role

While Midnight operates independently for privacy-focused tasks, it ultimately supports the Cardano ecosystem. Yue pointed out that Midnight offers private smart contracts and confidential data processing. These features are important for users seeking enhanced privacy without losing the security that Cardano provides.

In a visual chart accompanying his post, Yue explained how Midnight syncs with Cardano’s block data. This process involves dedicated nodes and databases that create privacy-enhanced blocks. These blocks allow users to selectively disclose sensitive information while maintaining privacy.

Jason Appleton, host of the crypto Crow show, also addressed the issue, reinforcing Yue’s point.

He stated, “Midnight is not here to replace Cardano, but to complement it.”

Appleton predicted that Midnight WOULD lead in privacy within the Cardano ecosystem, once its mainnet launches.

Cardano’s founder, Charles Hoskinson, has also weighed in on the issue, refuting claims of competition. He referred to Midnight as “the second kid,” emphasizing that Cardano remains the first and primary blockchain.

I'd like to start a podcast called the Night Shift. It will be all about midnight and release weekly. Who would like to host?

— Charles Hoskinson (@IOHK_Charles) November 7, 2025

Hoskinson’s comments aligned with Yue’s perspective that Midnight and Cardano are complementary, not rival networks.