Charles Hoskinson has officially unveiled the highly anticipated Midnight tokenomics framework. The whitepaper explains how NIGHT, a utility token that is supposed to boost value and governance, and DUST, a new type of shielded resource that powers transactions, work financially.
The NIGHT token has a fixed supply of 24 billion, minted on Cardano and divided between Cardano and the new Midnight network, using a cross-chain mechanism to stop double-counting or exploitation.
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NIGHT’s main job is to generate DUST, which acts like energy rather than currency. Unlike standard gas fees, DUST is generated by holding NIGHT, meaning users do not spend the token itself to use the network. The more NIGHT you hold, the more DUST you generate, making it easy to predict how it will perform even if the market becomes volatile.
The distribution starts with the “Glacier Drop” — a free token drop to eligible users across Cardano, Bitcoin, Ethereum, Solana and other chains. Then there is the “Scavenger Mine,” which gives out unclaimed tokens to those who contribute computing power.
And finally, there is a long-tail “Lost-and-Found” phase to catch anyone who missed their initial window. All NIGHT claimed during the first two phases will unlock gradually over 360 days after mainnet launch, with a 90-day grace period to redeem.
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When it comes to block rewards, Midnight will be using a decelerating issuance model that is controlled by an on-chain reserve pool. Thus, early block producers will not earn rewards, but eventually, Cardano SPOs can join in and earn NIGHT through a mix of fixed subsidies and usage-based incentives.
This whitepaper is not just about introducing a token, it is about launching a whole parallel economic system. How it affects the original Cardano (ADA) is an open question.