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Cardano founder Charles Hoskinson, in a recent discussion, presents privacy network Midnight as an essential component for Bitcoin DeFi. "Bitcoin users want privacy and Cardano could do a lot of the heavy lifting on the programming side," Hoskinson said.
Hoskinson explains a scenario where Midnight serves as the private coordination layer, allowing Bitcoin holders to generate yield on their own terms. Then enters Pogun, a system that aims to bring Bitcoin-based decentralized finance to Cardano. Hoskinson refers to "Pogun" as a circle, a powerhouse move between BTC, ADA and NIGHT.
In response to the insights shared by the Cardano founder, an X user asked how this would benefit the ADA ecosystem. "What would be the point in holding ADA over BTC? Are we building against our own core token on which depends the whole incentive system?" he asked.
Hoskinson responded, saying that "every single transaction required Ada to happen. The bitcoin user paid a fee in ada, but didn't see it," implying fees will be paid in ADA, hence boosting its utility.
Pogun is expected to deliver a full BTC liquidity and credit engine: a non-margin credit market in Q2, a yield DApp in Q3, and a BitVM-powered trust-minimized Bitcoin bridge in Q4.
The goal is to turn idle BTC into productive capital on Cardano, with mainnet launches planned through 2026.
Cardano Pogun project
Pogun aims to bring Bitcoin-based decentralized finance to Cardano. In practice, it would let Bitcoin holders borrow and earn yield on their holdings through Cardano without giving custody to a centralized intermediary. Pogun's lending component is targeted for public release in the second quarter.
Pogun is part of the nine proposals submitted by Cardano builder Input Output Group to supercharge the network, which focuses on scaling Cardano to increase its transaction processing capacity and expanding into Bitcoin DeFi.
The spotlight of the proposals is a major consensus upgrade, Leios, which Input Output claims will increase Cardano's transaction processing capacity by 10 to 65 times, targeting more than 1,000 transactions per second. Leios is scheduled for a test release in June and full deployment by the end of 2026.
Dan Burgin
U.Today Editorial Team
