Cardano’s Midnight to Bring Private DeFi to XRP — Unlocking $100B in Idle Assets In a high-profile Scott Melker podcast interview, Cardano founder Charles Hoskinson confirmed that XRP-focused DeFi is on the way, with Cardano’s privacy-driven Midnight chain set to enable private smart contracts for XRPL assets. According to Hoskinson, the concept revolves around wrapping XRP on Midnight, Cardano’s upcoming sidechain designed for confidential computation and data protection. Once wrapped, XRP could be used across a range of DeFi applications, including lending, borrowing, and yield farming, use cases that have historically been limited or unavailable to the XRPL ecosystem due to its lack of native smart contract functionality. Well, the strategic significance of the proposal lies in the sheer scale of dormant capital it seeks to activate. With over $100 billion worth of XRP held largely idle, Hoskinson argues that enabling DeFi rails for these assets could represent one of the largest untapped liquidity pools in crypto. By bridging XRP into a smart contract–capable and privacy-preserving environment, Midnight could allow institutions and retail users alike to deploy capital efficiently without compromising compliance or confidentiality. Privacy sits at the core of the strategy. Midnight enables selective disclosure, allowing users and institutions to satisfy regulatory requirements while preserving on-chain confidentiality. This balance makes Midnight especially appealing to enterprise players wary of fully transparent DeFi. According to Hoskinson, it positions Cardano and Midnight as a neutral settlement and computation layer, complementing the XRP Ledger (XRPL) rather than competing with it. The announcement builds on Hoskinson’s outreach to the XRP community in December, when he publicly invited XRPL developers and stakeholders to collaborate at a DeFi-focused summit hosted at the University of Edinburgh. That initiative signaled a shift toward cross-ecosystem cooperation, emphasizing interoperability over tribalism in blockchain development. If executed successfully, the XRP–Midnight integration could mark a major inflection point for both ecosystems. For XRP holders, it opens the door to yield-generating opportunities long available on other chains. For Cardano, it strengthens its narrative as an infrastructure provider capable of supporting multiple networks through advanced privacy and compliance tooling. Conclusion Hoskinson’s confirmation marks a potential inflection point for XRP and cross-chain DeFi. By pairing XRP’s deep liquidity with Midnight’s privacy-preserving smart contracts, the initiative could activate billions in idle capital while resolving long-standing compliance and confidentiality concerns. If successfully implemented, this collaboration would not only expand XRP’s real-world utility but also establish a new benchmark for interoperable, enterprise-ready DeFi across major blockchain ecosystems.
