Cardano Founder Says Midnight is Going to Be the DeFi Layer of XRP

Charles Hoskinson, the founder of Cardano, recently shared his vision for the Midnight collaboration with the XRP ecosystem.

Hoskinson discussed this during a live AMA session, revealing that he wants Midnight, Cardano’s privacy-focused sidechain, to become the DeFi layer for the XRP ecosystem.

Midnight to Act as the DeFi Layer of XRP

According to the Cardano founder, this move would allow XRP holders and Ripple itself to access better DeFi yields without needing to move their tokens off the XRP Ledger.

Hoskinson believes XRP can stay true to its identity while still gaining access to advanced DeFi services. His goal centers on giving XRP users a chance to earn higher returns through features like staking, lending, and liquidity pools. These are options that XRP’s native chain doesn’t support because it lacks smart contract capabilities.

Midnight, the Cardano sidechain designed to protect user privacy through zero-knowledge cryptography, is at the center of this plan. Notably, Midnight lets users run confidential smart contracts and interact with DeFi applications without revealing sensitive data.

As the Cardano ecosystem connects Midnight to the XRP Ledger, it will present DeFi opportunities for XRP holders while keeping their assets safe on the native chain.

A Full XRP DeFi Package

Hoskinson’s plan is part of a broader push to build bridges between blockchain communities rather than create competition. Specifically, he wants Cardano and XRP to work side by side, with Midnight acting as a secure layer that expands XRP’s use cases.

The integration doesn’t stop with Midnight, as confirmed by Hoskinson, who teased a “full DeFi package.” As part of this package, Cardano’s Lace Wallet will soon support XRP, allowing users to manage XRP and other digital assets in one place.

In addition, discussions are underway to bring RLUSD, Ripple’s USD-backed stablecoin, into the Cardano ecosystem. If this is successful, RLUSD will serve as a stable liquidity option for DeFi platforms running on Midnight.

Meanwhile, Hoskinson has also spoken with Ripple’s top executives, including CTO David Schwartz and CEO Brad Garlinghouse, about building a smooth connection between Midnight and the XRP Ledger. These talks aim to combine Cardano’s smart contract tools with XRP’s strength in cross-border payments and deep liquidity.

The Midnight Airdrop

Interestingly, to encourage early adoption, Cardano has launched two airdrop campaigns: the Glacier Drop and the Midnight airdrop. XRP holders who had at least $100 worth of XRP on June 11, 2025, can claim part of the 1.2 billion NIGHT tokens, which power Midnight’s governance.

Notably, Midnight has already gone live on testnet, with developers deploying the first privacy-focused apps late last year. Cardano expects the mainnet launch later in 2025. The sidechain supports multiple blockchains, including Ethereum, Solana, Avalanche, and XRPL.