Midnight Hackathon Winner Latch Build Private Spending Controls for AI Agents

Latch, wey win the DeFi track for the July 2026 Midnight Hackathon, don deploy one Compact smart contract wey allow owners define private and revocable spending permissions for AI agents. Dem present the project during the July 29 Fireside Dev Hang together with updates on developer features wey dey come for Midnight and shielded token tools.

Midnight na Cardano partner chain for programmable privacy and selective disclosure. The development environment allow applications verify contract execution while e still protect financial policies, user identities and other sensitive data.

Latch Restrict AI Agent Wallet Access

Ashiha Mahesh Kumar and Atharv Mantri develop Latch around the risks wey dey show when autonomous agents need buy APIs, datasets, infrastructure or other digital services. If you give agent free access to funded wallet, compromised workflow, prompt injection or bad decision fit turn to open financial liability.

The project replace full wallet control with limited spending capability. Owners fit define total budget, maximum payment amount, approved spending category, usage limit and revocation status. One nullifier mechanism dey prevent approved request from submitting more than once.

Latch still separate private management data from information wey outside observers fit see. The Owner View dey show spending rules and detailed rejection reasons, while the Public Observer View only dey receive commitments, authorization status and restricted receipts. Private limits, categories and rejection details no dey inside the public data model.

According to the project Devpost submission, the Compact contract don deploy for Midnight Preprod through connected Lace wallet. The contract implement three circuits, createCapability, authorizeSpend and revokeCapability.

The interactive walkthrough currently dey use local simulator wey mirror those authorization rules. Simulator actions no dey submit as Preprod transactions. The next development milestone for Latch na to connect the complete application workflow directly to the deployed contract.

Midnight Prepare Contract Calls and Shielded Token Standards

The Fireside update still cover contract-to-contract calls, events, ECDSA signature support and further improvements to the Compact development environment. The functions dey move go quality assurance and test environments but dem never public for the Preview network.

Contract-to-contract calls go allow one Midnight smart contract invoke functionality wey another provide. Events go give dApps and external services structured way to track contract activity, while ECDSA support go expand compatibility with existing wallet, signature and security infrastructure.

Midnight plan to release documentation, examples and tutorial code as the individual functions dey available for developer testing.

The update still include MIP-11, OpenZeppelin proposed standard for native shielded tokens for Midnight. The public development issue still open and dem list am as in progress under the Compact Contracts 0.3.0 alpha release process.

Im first phase cover minting and burning native shielded Zswap tokens with modular ownership, role-based or multisignature controls. Later transfer phase go depend on contract-to-contract calls and custom spending logic.

Shared implementation go provide wallet and dApp developers consistent structure to issue and destroy shielded assets instead make each application create independent token model.

Shielded Chips Test Private Assets and Contract Custody

Shielded Chips dey use roulette application to demonstrate how public game rules fit operate side by side with private ownership and payout data. Observers fit verify say pseudonymous participant place wager and whether e win, while the player wallet address, identity and private payout amount still dey protected.

The house na the only party wey get authorization to mint the game chip tokens. Before round begin, the smart contract go take custody of the required assets from both sides and then apply the published rules to determine the payout.

The design separate those shielded application assets from $NIGHT, Midnight public, unshielded native and governance token. Under the demonstrated model, $NIGHT no function as the private chip wey dem dey use inside the game contract.

The test environment still cover transactions wey dem design to fail. The contract must reject unsupported shielded token, prevent losing participant from claiming the payout and confirm say the disclosed result match the value wey dem commit before the outcome reveal.

The Shielded Chips repository and tutorial no public at the time of the update. Their planned release aim to document shielded token minting, contract custody, pseudonymous identity, private payouts and failure testing.

To publish that code go place reusable application example beside MIP-11 common token interface. Latch separate Preprod integration go complete direct contract enforcement for capability creation, payment authorization and revocation, giving Midnight developers two different implementation paths for shielded assets and constrained AI agent payments.