Midnight Foundation’s Partnership Negotiations
In a recent interaction on X Spaces, Fahmi Syed, who leads the Midnight Foundation, disclosed that they are in the process of negotiating a substantial agreement with a potential partner specializing in stablecoins. Although the arrangement is not yet concluded, Syed expressed optimism about finalizing the legal contract, which is currently undergoing a formal review.
“If we manage to get it signed,” he remarked, further adding that details will be publicly shared in the imminent days or weeks if the partnership materializes.
Recent Developments in the Midnight Network
This news follows closely on the heels of the Midnight Network’s (NIGHT) launch on December 8, with many Cardano users currently experiencing a phase termed “thawing,” allowing them to unlock their tokens gradually over a span of 360 days from the “Glacier Drop.”
Cardano’s Stablecoin Landscape
In the realm of Cardano’s stablecoin offerings, USDM has emerged as a trusted alternative to USDC, boasting adherence to regulatory standards in the United States and steering clear of algorithmic structures. However, the USDA stablecoin continues to face challenges with liquidity, resulting in traders incurring substantial losses due to slippage—a phenomenon attributed to insufficient USDA reserves in the liquidity pools.
Currently, USDA operates as a decentralized option that avoids conventional fiat currency by using ADA as collateral to mint its DJED counterpart, with a requirement of locking between $4 to $8 of ADA for each $1 minted.
Transitioning Stablecoins to the Midnight Platform
It’s essential to recognize that the existing stablecoins, namely USDM and USDA, function on the public Cardano network. Transitioning these assets onto the Midnight platform requires legal consent from their issuers, Mehen and Anzens, as this process transforms them from public to private designation. At present, token holders must wrap these coins to adapt them for use on Midnight.
Should the partnership with the stablecoin entity be finalized, it would allow for the issuance of stablecoins natively on the privacy-oriented blockchain.
