Cardano’s Midnight protocol may soon extend DeFi utility to Bitcoin and XRP, according to Charles Hoskinson. He noted that DeFi support for Bitcoin and XRP could roll out via Midnight, with plans to wrap XRP on the network to enable lending, borrowing, and yield strategies. Midnight operates as a partner chain to Cardano focused on private smart contracts.
Midnight was launched in December 2025 and functions as a partnering chain for Cardano. It leverages zero-knowledge cryptography to offer safe smart contracts, enabling privacy-preserving cross-chain interactions.
Hoskinson’s plan involves wrapping the XRP altcoin on Midnight to implement XRP DeFi, allowing participation in loan and yield services without exposing transaction details. This approach could unlock a sizable pool of liquidity, addressing privacy gaps in the XRP Ledger’s DeFi space. The public XRP Ledger’s lack of privacy utility for smart contracts may make Midnight’s privacy-focused solution particularly compelling.
The Cardano founder has described Midnight as the first case of a “fourth generation” cryptocurrency, marking a shift from Layer-1 competition to cross-chain infrastructure with potential benefits for early adopters. He emphasizes that this architecture could support broader DeFi opportunities, moving beyond the Bitcoin and XRP DeFi project itself. This evolution is viewed as essential for the next generation of decentralized applications, especially those incorporating privacy preservation. Hoskinson has also contrasted Midnight’s approach with more TradFi-driven tokenization efforts, noting that XRP—already operating at a scale beyond many current initiatives—could benefit from such cross-chain privacy-enabled DeFi developments.
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