Charles Highlights Midnight’s Celestia Layer for Shared Zswap Liquidity

Charles Hoskinson renewed attention to Midnight’s technical integration with Celestia after publicly praising its team, ecosystem and technology on August 24. The architecture centers on Zswap, Midnight’s protocol for privacy-preserving atomic swaps, which uses Celestia to distribute offers across different applications.

Midnight is a privacy-focused partner chain connected to Cardano, with $NIGHT as its utility token. Celestia is a modular blockchain network focused on data availability, with $TIA as its native asset.

Celestia Distributes Midnight Zswap Offers

Zswap allows users to create offers for exchanging digital assets without publicly exposing their identities, total balances or unrelated financial information.

A user’s wallet creates and cryptographically proves an offer locally before publishing it to a shared Celestia namespace. Celestia’s validators make the information available and retrievable, while wallets, exchanges and aggregators monitoring that namespace can identify matching offers.

When another participant accepts an offer, the two sides can be merged off-chain into a single balanced transaction. The completed swap is then submitted to Midnight for settlement, while private account information and intermediate imbalances remain outside the final ledger record.

Celestia detailed the architecture in a case study published on June 23 and described Midnight as the first chain implementing its data availability infrastructure as a peer-to-peer distribution layer. Hoskinson brought the integration back into public discussion when he described Celestia as a “great team, great ecosystem, great tech.”

One Namespace Connects Liquidity Across Applications

Decentralized trading protocols commonly operate separate order distribution systems and must attract liquidity independently. Midnight’s model allows multiple venues to read offers from the same Celestia namespace.

A new wallet, request-for-quote platform, decentralized exchange or NFT marketplace can therefore access existing offers instead of launching with an isolated order book. An offer created through one interface can be discovered and accepted through another service monitoring the same data.

Midnight has made this flow available through Offer Files. Users can generate an offer locally, serialize it and distribute it through Celestia or another communication channel. EffectStream also provides access to current network state through an RPC interface without requiring developers to manage Celestia or Midnight indexing directly.

Sebastien Guillemot, chief technology officer at the Midnight Foundation, said Celestia removes the need to spend months building a separate peer-to-peer protocol while reducing the associated engineering and opportunity costs.

Midnight Keeps Privacy and Final Settlement

Celestia is not Midnight’s base layer and does not execute its private transactions. Its role is to distribute Zswap offers and make them available to services indexing the shared namespace. Midnight retains transaction validation, protocol rules and final swap settlement.

For the Cardano ecosystem, the infrastructure extends the connection between Cardano and Midnight. VIA Labs has already established a production route for native USDM transfers between the two networks, while Zswap provides Midnight applications with a protocol-level foundation for private trading and common offer discovery.

Offer Files currently limit each offer to a one-hour expiry period. Midnight said its next hard fork is expected to extend that window to two weeks.

Midnight applications can already read the same collection of Zswap offers instead of building isolated sources of order flow. The planned expiry extension would make those offers available for longer across wallets, exchanges and aggregators connected through the Celestia namespace.