Charles Hoskinson, founder of Cardano, addressed questions about whether ADA holders should sell their tokens for NIGHT following the Midnight privacy network's recent airdrop.
What Happened: Token Relationship
In a Dec. 21 appearance on the Discover Crypto podcast, Hoskinson argued the two tokens serve complementary rather than competing functions.
Hoskinson described Midnight as infrastructure designed to enhance Cardano applications rather than replace the base layer. "Midnight is the ChatGPT of privacy. That's its job. It's a blockchain to blockchain infrastructure module," he said. "So, what Midnight does is it actually makes Cardano applications have privacy."
He predicted Cardano-native applications would adopt the privacy features first as a competitive advantage.
"Which ones do you think are going to adopt privacy first? Uniswap and PancakeSwap and all these giant things that are slow moving and they're very conservative because they have a lot of users of value flow," Hoskinson said. "No, it'll be Cardano applications. Because they need to gain users and so this is how they leapfrog the competition."
Hoskinson emphasized distribution benefits for ADA holders, noting they receive preferential access to ecosystem developments.
"If you're an ADA holder, you get first access to all of these things and you get the largest proportion of the airdrop," he said. "And also, Cardano secures Midnight. So, that means ADA holders get NIGHT tokens."
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Why It Matters: Cross-Chain Liquidity
Hoskinson presented a thesis centered on attracting Bitcoin capital through Cardano's UTXO architecture.
He described Bitcoin holders as seeking yield opportunities across chains, with Cardano positioned as a natural destination due to shared technical models. "When you look at Bitcoin... it doesn't care if it goes to Ethereum or Solana or Cardano or other places to get yield," he said. "It's going to go to the closest continent and the closest continent is Cardano because it's a UTXO system and Bitcoin is UTXO system."
The founder suggested institutional Bitcoin holders could generate yield through Cardano DeFi without selling their holdings, creating what he called "value leakage" from Bitcoin into other ecosystems.
He argued this represents a structural shift from previous market cycles where retail investors rotated profits from Bitcoin into alternative tokens.
Hoskinson said privacy-preserving yield tools could extend to other assets including XRP, with Midnight designed to "hybridize" on-chain and off-chain infrastructure.
When asked about price targets, Hoskinson declined to provide specific forecasts for ADA.
He stated Bitcoin remains the only asset he feels confident predicting due to institutional demand through exchange-traded funds and long-term holding strategies. ADA traded at $0.36 at press time.
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