As blockchain technology grows, it's no longer just about one chain doing everything. Instead, we're seeing ecosystems made up of several chains that work together. Cardano's version of this idea is called partner chains.
New to the basics? Start with what a blockchain is, then come back here.
What Is a Partner Chain?
A partner chain is an independent blockchain that runs alongside Cardano. It has its own rules, its own token and its own purpose, but it can borrow security and infrastructure from Cardano instead of building everything from scratch. Input Output, one of the organizations that built Cardano, describes partner chains as a family of independent layer 1 networks that can work with Cardano and with each other.1
The idea grew out of earlier research on proof-of-stake sidechains. A sidechain runs beside a main chain and depends on it. The partner chain framework builds on that work with one key safeguard, which the research calls the firewall property: if a partner chain fails, the problem should stay on that chain and not put Cardano or other connected chains at risk.2
Partner chains are also different from layer 2s. A layer 2 such as Hydra processes Cardano transactions off the main chain and settles back to it. A partner chain is a full blockchain of its own, with its own ledger and its own validators.
How Do Partner Chains Work?
Input Output built an open-source Partner Chains toolkit for launching these chains. It is based on Substrate, a framework from the Polkadot ecosystem for building custom blockchains.3 The main pieces are:
- Cardano stake pool operators as validators. A Cardano stake pool operator (SPO) can register on Cardano to help run a partner chain. The partner chain reads those registrations, and stake data, from Cardano through a chain indexer.4
- A mixed validator committee. Each epoch, the partner chain picks a group of validators. A setting called the D parameter controls the mix of registered Cardano SPOs and permissioned validators chosen by the chain's builder. A chain can start fully permissioned and shift toward registered SPOs over time.4
- Its own consensus. The committee feeds into whatever consensus the partner chain uses. Partner chains do not have to run Ouroboros, Cardano's own consensus protocol.4
- Governance and treasury on Cardano. The toolkit includes multi-signature governance for the chain's builders, a token reserve held on Cardano and a system for paying rewards to block producers and their delegators.3
Input Output released the first alpha version of the toolkit in August 2024 for testing only, not for live networks, and named Midnight as the first chain to use it.5 In April 2026 the standalone toolkit repository was archived, and development now continues inside Midnight's node software.3
Midnight: The First Partner Chain
Midnight is the first partner chain to Cardano.2 It is a data protection blockchain: it uses zero-knowledge proofs so people can prove something about their data while keeping the data itself hidden. Developers write its smart contracts in Compact, a language based on TypeScript.6
Here is how far Midnight has come, in order:
- December 2025: NIGHT launches on Cardano. Midnight's token, NIGHT, launched first as a Cardano native asset, before Midnight's own mainnet existed.7
- March 2026: mainnet goes live. Midnight's mainnet launched with a group of federated node operators, named companies including Google Cloud, Blockdaemon, eToro and MoneyGram.8 The Midnight Foundation plans to move from this federated model toward full decentralization in later phases.8
- September 2026: open smart contract deployment. Until then, teams applied to the Midnight Foundation for deployment credentials.9 Developers can now deploy smart contracts to Midnight mainnet without a required security review.10
Midnight's consensus design lets Cardano SPOs take part in block production through stake delegation, alongside optional permissioned validators.11 At launch, though, the network ran on the federated operators above. Midnight caps this bootstrapping phase at 13 block-producing nodes, and the operators earn no block rewards.12 Midnight's published roadmap brings Cardano SPOs on in a later phase called Mōhalu and hands block production to the community in a phase called Hua.13
Midnight also shows how a partner chain can handle tokens differently from Cardano. Fees on Midnight are paid in DUST, a shielded (private) resource that can't be transferred. Holding NIGHT generates DUST over time.14 You can browse projects building on it in the Midnight category.
Why Do Partner Chains Matter?
Partner chains let Cardano's technology reach use cases that don't fit neatly on one chain. Instead of adding every feature to Cardano itself, a specialized chain can focus on one job, like privacy in Midnight's case.
Here's what the model offers:
- Specialization: Each chain can choose its own rules, fees and features without changing Cardano.
- Shared security: A new chain can recruit experienced Cardano SPOs as validators instead of building a validator community from zero.4
- Contained risk: Problems on one partner chain are designed to stay on that chain.2
- More activity for the ecosystem: Partner chain users, developers and assets can connect back to Cardano.
It's similar to how the internet is made of many connected networks, each with its own purpose.
Midnight is the first working example. Adastack lists partner chain projects as they appear.
Learn More
- Partner Chains Toolkit documentation: Input Output's technical guide to how partner chains select validators and connect to Cardano (archived; development continues in midnight-node)
- The origins of sidechains and partner chains: Midnight's explainer on the research behind partner chains
- Proof-of-Stake Sidechains: The original research paper, for readers who want the formal details
- Partner chain guides: More partner chain explainers listed on Adastack
