NIGHT, the native token of Cardano’s privacy focused Midnight network, plunged more than 43% on Monday, falling to an all time low of $0.01524 after a massive token selloff sparked fears of a potential network compromise.
However, the Midnight Foundation has denied reports of a hack, stating that the incident appears to be related to a cross chain bridge rather than the Midnight blockchain itself.
Foundation Rules Out Network Hack
The sharp decline triggered speculation that Midnight’s infrastructure had been breached. Those concerns were quickly addressed by the Midnight Foundation, which said preliminary findings indicate the issue originated from Wanchain’s Cardano to BNB Chain bridge and not from Midnight’s protocol.
Independent blockchain researcher Paul reported that between 14:46 and 14:55 UTC, approximately 515 million NIGHT tokens were withdrawn from a Wanchain bridge contract responsible for locking tokens on the Cardano network before issuing wrapped versions on BNB Chain.
According to his analysis, around 290 million of those tokens were immediately sold through decentralized exchanges, triggering the steep price collapse. Another 200 million tokens were transferred to a separate wallet, leaving a substantial amount of unsold tokens that could continue to weigh on the market.
Importantly, Paul noted that the overall supply of NIGHT remained unchanged, indicating that no new tokens had been created and that the selloff involved existing circulating tokens.
Shortly afterward, the Midnight Foundation issued a public statement confirming that available evidence pointed to a bridge related issue rather than any vulnerability within Midnight itself. The organization also urged community members to rely only on official announcements and remain cautious of phishing attempts while the investigation continues.
In a later update, the Foundation confirmed that Midnight’s protocol, validator network, consensus mechanism, and core infrastructure were all operating normally.
Price Recovers Partially After Historic Drop
Before the incident, NIGHT had traded as high as $0.026. The large scale liquidation pushed the token down to a record low of $0.01524 before buyers stepped in.
At the time of writing, NIGHT had recovered more than 28% from its lowest level. Even so, the token remained down approximately 27% over the previous 24 hours, had erased all gains accumulated during the past year, and was still roughly 34% lower than its price one week earlier.
Bridge Security Under Renewed Scrutiny
Cardano co founder Charles Hoskinson also commented on the incident, revealing that he was alerted by an automated notification after NIGHT experienced unusual market activity. He said the Midnight Foundation and several other teams quickly established an informal response group to monitor developments.
Hoskinson stressed that Midnight’s smart contracts continued operating without interruption and reiterated that the issue stemmed from one component within Wanchain’s bridge infrastructure rather than the blockchain itself.
He argued that cross chain bridges remain one of the weakest areas of the cryptocurrency ecosystem because they rely on additional trust assumptions beyond the security of the underlying blockchains. According to Hoskinson, technologies such as zero knowledge proof based bridges, trusted execution environments, and multisignature security systems could help reduce these risks in the future.
The incident has also revived broader concerns about decentralized finance security in the age of artificial intelligence.
OpenZeppelin co founder Manuel Aráoz previously warned that increasingly sophisticated AI coding tools are making it easier for attackers to identify software vulnerabilities, creating significant challenges for DeFi protocols responsible for safeguarding user assets.
Similar concerns have recently been echoed by other industry analysts following the release of more advanced AI systems capable of rapidly detecting weaknesses in blockchain software, reinforcing calls for stronger security standards across cross chain infrastructure.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
