Cardano’s NIGHT Token Plummets to Record Low Amidst Bridge Concerns
NIGHT, the native token of Cardano’s privacy-focused Midnight network, experienced a dramatic sell-off earlier today, plunging over 43% to an all-time low of $0.01524.
Speculation and Official Explanation
Initial speculation suggested a potential hack of the Midnight blockchain, but The Midnight Foundation clarified that the sharp price decline was triggered by the movement of approximately 2% of NIGHT’s total supply from a two-year-old contract linked to Wanchain’s Cardano-to-BNB Chain bridge.
On-Chain Analysis Reveals Token Movement
Independent on-chain researcher Paul was among the first to identify the significant withdrawal. His preliminary findings indicated that between 14:46 and 14:55 UTC on Monday, roughly 515 million NIGHT tokens were moved from a contract designated as Wanchain’s Cardano-side bridge lock address, which underpins the Wanchain-wrapped NIGHT on the BNB Chain. Notably, other assets within the same contract, including Mynth, XER, and WMT, remained untouched.
Paul’s analysis further revealed that approximately 290 million tokens were subsequently sold across decentralized exchanges, driving the price down. An additional 200 million tokens were transferred to a separate wallet, leaving what he described as a substantial unsold inventory. He also confirmed that the total NIGHT supply remained unchanged, indicating no new tokens were minted.
Midnight Foundation Addresses the Situation
Shortly after the token movement, the Midnight Foundation issued a community update on X, acknowledging reports concerning the Wanchain Cardano-to-BNB bridge. The foundation emphasized that available information pointed towards an issue with the cross-chain bridge itself, rather than a problem with the Midnight network. They advised users to rely solely on official updates and to be vigilant against phishing attempts during the ongoing investigations.
In a subsequent statement, the organization confirmed that Midnight’s protocol, validator network, consensus mechanism, and core infrastructure were all functioning normally.
Market Impact and Recovery
CoinGecko data shows that prior to the sharp decline, NIGHT had been trading as high as $0.026. The sudden sale of 290 million tokens sent the price spiraling to its all-time low of $0.01524. While the token has since recovered some of its losses, trading more than 28% above its ATL at the time of writing, it remained down 27% over the preceding 24 hours. The token has also erased all gains from the past year and is approximately 34% lower than its value a week ago.
Cardano Co-Founder Weighs In
Charles Hoskinson, co-founder of Cardano, commented on the event, stating that an automated alert on his phone had flagged NIGHT’s unusual price action. This prompted the Midnight Foundation and other stakeholders to establish an informal “war room” to monitor the unfolding situation.
Hoskinson’s key points included:
- Midnight’s smart contracts continued to operate without interruption.
- The issue originated from one of the four components within Wanchain’s bridge architecture.
- The industry needs to enhance vigilance, particularly given the rapid advancements in AI tools that can quickly identify vulnerabilities.
Broader Implications for Crypto Security
Hoskinson highlighted that bridge infrastructure represents one of the most vulnerable areas in cryptocurrency, as it relies on trust assumptions external to the underlying blockchain. He expressed optimism that technologies such as zero-knowledge proof-based bridges, trusted execution environments, and multisig systems could mitigate these risks.
His concerns about AI’s impact on security were echoed by Manuel Aráoz, co-founder of OpenZeppelin, who in late May warned about the increasing difficulty for DeFi protocols to secure user funds due to AI-powered coding agents favoring attackers. Analyst “DeFi Investor” recently reiterated this warning following Anthropic’s launch of Mythos AI, an AI tool reportedly adept at discovering software vulnerabilities.
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