Midnight Partners With Sig Network to Bring Privacy to Ethereum Apps

Midnight Foundation and Sig Network announced a partnership on October 28 to connect Midnight’s programmable privacy with applications on Ethereum. The collaboration centers on signing infrastructure that gives Midnight smart contracts their own Ethereum accounts, allowing private application logic to direct transactions on public markets.

Sig Network also provides the signing infrastructure behind Nightmode. Its tools are available to other teams building on Midnight, with the Ethereum integration currently running on Midnight’s Stagenet testing environment.

Private User Records, Existing Ethereum Markets

Under the model described by the partners, developers can add a private pool to an existing application while retaining its Ethereum-based infrastructure. User balances and identities are shielded on Midnight, while the application continues accessing liquidity on established trading and lending protocols.

One proposed use is private trading through Uniswap. Orders offset one another within a pool on Midnight, and only the remaining net amount reaches Uniswap through a single Ethereum account. For lending, a pool can aggregate funds and supply them to Aave while maintaining a private record of each depositor’s share. Teams can introduce these features incrementally, then move additional functions, such as strategy and routing, onto Midnight.

How Midnight Contracts Authorize Ethereum Transactions

A Midnight contract first checks the user’s request. A circuit written in Compact, Midnight’s smart contract language, validates the operation, burns the corresponding shielded claim, and queues an Ethereum transaction. A required threshold of independent Sig Network signers then produces a standard Ethereum signature; no individual signer can authorize the transaction alone.

The operation executes from the contract-controlled Ethereum account, and confirmation returns to Midnight so the user’s balance can be updated. Ethereum still publicly records the amounts and timing of those transactions. The privacy layer protects the individual ownership records and user information behind the account’s activity.

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Application Controls and Stagenet Access

The partnership announcement also describes application-specific participation and disclosure rules. Each Midnight contract determines which deposits it accepts, what information users must provide, and who may access that information. Selective disclosure allows authorized parties to inspect relevant records without publishing them on the public network. Applications maintain separate accounts, and existing Ethereum screening tools can be applied to those accounts.

Current Stagenet functionality covers deposits, Uniswap swaps, supplying assets to Aave, and withdrawals to Ethereum addresses. Developers can import the Signet module into Compact to queue Ethereum transactions from their contracts. The published example includes an ERC-20 vault covering those operations, along with deployment tools and integration tests.