On Midnight, you hold NIGHT and spend DUST. NIGHT is the transferable token used for staking and governance, and holding it generates DUST over time. DUST is a shielded, non-transferable reso
On Midnight, you hold NIGHT and spend DUST. NIGHT is the transferable token used for staking and governance, and holding it generates DUST over time.
DUST is a shielded, non-transferable resource that the network uses up to pay transaction fees. NIGHT itself is never spent on fees. Midnight compares the setup to a battery that recharges while you hold NIGHT.
The model is now under real load. After permissionless smart contract deployment went live on mainnet, daily transactions reportedly rose from 284 on October 1 to 26,178 on October 8.
Midnight’s documentation describes one native token and one native resource. DUST is not technically a token at all.
The two also sit on different sides of Midnight’s dual ledger, which handles both public and private data. NIGHT is always unshielded, meaning public, while DUST is always shielded, meaning private.
DUST moves through a four-phase cycle of generation, constant capacity, decay and empty. It starts with registration.
To start generating, a holder registers NIGHT and designates a DUST address. Registering does not spend or move the NIGHT. It stays in the wallet and remains spendable, although spending it stops generation.
Timing depends on where the NIGHT lives. For NIGHT held on Cardano, called cNIGHT, generation begins about 12 hours after registration because of cross-chain confirmation. For NIGHT native to Midnight, it starts immediately.
DUST builds at a constant linear rate, and 1 NIGHT yields up to 5 DUST. Under the initial protocol settings, reaching that cap takes about one week. Once the cap is reached, generation pauses until some DUST is used.
Midnight tracks NIGHT using the UTXO model, short for unspent transaction output, where balances are held as separate chunks of value. Each NIGHT UTXO generates its own DUST.
DUST does not last forever. If you spend your backing NIGHT, the related DUST starts to decay right away, even if it was still generating. Spending only part of your NIGHT creates a new NIGHT UTXO that starts generating fresh DUST, while the old DUST decays.
Midnight designed DUST so it cannot become a speculative asset.
Because DUST is generated from NIGHT, cannot be transferred and is consumed when used, network capacity cannot be stockpiled or auctioned in fee markets. Midnight argues this lowers regulatory risk for a privacy network, since DUST is a consumable resource, not a financial asset.
The design has practical effects:
Apps can cover fees for their users, so new users don’t need to hold NIGHT at all.
Through fee sponsorship, a user authorizes an action and a sponsor pays the DUST fee. A user with zero DUST can transact from their first click. Sponsorship works at the wallet level, because smart contracts cannot hold or spend DUST under the current protocol.
Real products already use this. In the Gero wallet, one Midnight wallet can use its DUST to sponsor fees for another, and a pilot lets developers sponsor fees through an API.
The Sundae Labs Capacity Exchange lets users pay fees on supported apps in USDM, a stablecoin, and converts that payment into DUST behind the scenes. Wallet provider Dynamic has also integrated Midnight, including a “Login with Midnight” option.
NIGHT has been volatile since mainnet opened to all builders.
NIGHT reached about $0.049 on October 4, a gain of roughly 91% over seven days. It has since pulled back. NIGHT had traded between $0.052 and $0.041 since late September and flagged $0.041 as short-term support.
NIGHT has a fixed total supply of 24 billion, with about 16.6 billion in circulation. On October 20, Midnight introduced Nightmode, which uses vaults based on multiparty computation to link Midnight’s shielded pool to public blockchains. A day later, a report described Morpho preparing “Morpho Midnight” lending markets for borrowing against invoices.
NIGHT and DUST split Midnight’s economy into two parts. NIGHT is the public, tradable asset for staking and governance, and DUST is the private, renewable resource that pays for transactions. Holders generate up to 5 DUST per NIGHT, and apps can sponsor fees so users can transact without holding NIGHT.
