As I continue my journey through the world of Web3, I’ve been digging into the building blocks that make privacy-first platforms like Midnight possible (you can catch up on previous posts in the Midnight Dev Diaries!). This week, I focused on two foundational pieces that go hand in hand: smart contracts on Midnight and the Compact language that powers them.
Smart contracts aren’t new to blockchain, but Midnight’s approach is unique. Instead of executing code directly on-chain, Midnight uses smart contracts to define rules that are enforced off-chain through zero-knowledge proofs. At the center of this system is Compact—a purpose-built language designed to make writing these privacy-preserving contracts both secure and practical.
To better understand how this works in practice, I also worked through Module 2 of the Midnight Developer Academy, which covers key concepts such as contract structure, circuit types, and the relationship between the contract and the external logic that executes it.
In this post, I’ll break down what makes smart contracts on Midnight different, how Compact is structured, and how the two work together to enable provable logic without exposing sensitive data.
What Is a Smart Contract on Midnight?
At a high level, a smart contract is an autonomous program stored on the blockchain. It defines rules for interaction, checks that those rules are met, and records results—all without needing a trusted third party to enforce them.
But Midnight isn’t just any blockchain. It’s a privacy-first platform built with compliance in mind, and that means its smart contracts need to do more than just run logic. They need to protect private data, enable selective disclosure, and uphold security and trust even in adversarial environments.
That’s where Compact comes in—a custom domain-specific language explicitly designed to write smart contracts on Midnight.
Instead of executing logic directly on-chain like many traditional smart contracts, Compact contracts define the logic to be proven, not the execution environment itself. The contract encodes the rules that must be followed, which are then used as the foundation for a zero-knowledge proof. The actual execution—like processing a transaction, generating a credential, or submitting a vote—happens externally, often in a DApp, backend service, or API.
That external system runs the necessary logic and proves it followed the contract’s rules by generating a cryptographic proof. The blockchain doesn’t need to know the details—it just verifies that the proof is valid. This separation is what makes Midnight’s model both scalable and privacy-preserving.
In other words: the contract sets the rules, your app runs the logic, and the blockchain verifies the outcome, without ever seeing the sensitive inputs.
What Is Compact?
Compact is a statically typed, privacy-focused smart contract language tailored to the unique goals of the Midnight network. If you've worked with JavaScript or TypeScript before, you'll find Compact refreshingly approachable. It’s a domain-specific language (DSL) designed to define zero-knowledge proof logic using statically typed circuits that map to off-chain computations. But don’t let the simple syntax fool you—Compact is engineered for privacy-preserving computation using zero-knowledge proofs (ZKPs) under the hood. (For a more technical deep dive into compact, check out part 1 of Kevin Millikin's Compact Deep Dive here!)
A Compact contract is made up of three core components:
- Ledger: The public, on-chain state of the contract.
- Circuits: Off-chain logic that can manipulate data, produce proofs, and interact with the ledger.
- Witnesses: Privately held data, only known to the entity executing the contract.
Compact also supports explicit disclosure, meaning developers can define exactly what data gets revealed (and to whom). This provides fine-grained control over what is visible on-chain and what remains private, essential for use cases such as private asset transfers, age-gated access, or confidential voting.
Circuits and Privacy
One of the most essential takeaways from Module 2 of the Midnight Developer Academy is how circuits work. In Compact, circuits are the functions that users or systems can call to trigger actions. But unlike Web2 APIs or EVM contract functions, these circuits don’t execute logic directly on the blockchain. Instead, they run off-chain and generate zero-knowledge proofs that the logic was followed.
In practice, that means:
- The contract logic is public.
- The data used during execution is private.
- The outcome of the logic (e.g., “the rules were followed”) is publicly verifiable using a proof.
This is where Midnight’s model shows its strength—users can prove they followed the rules without revealing the exact data that triggered the result. Think “I proved I’m eligible to vote” without revealing who I am or what I voted for.
From Theory to Practice
In traditional smart contract platforms, everything you do is public by default: data, logic, inputs, outputs. That’s useful for transparency, but it's not always practical, especially for sensitive use cases like health data, financial records, or identity verification.
Midnight flips that default. Privacy is built in, and developers opt into disclosure only when it’s needed.
Some examples of what you might build with Compact on Midnight:
- A voting system where only the outcome is public.
- An access control system that verifies user attributes without revealing identities.
- A token transfer app that hides amounts or senders while still allowing public verification.
Conclusion
Smart contracts are the foundation of decentralized applications—but at Midnight, they’re built for a privacy-first future. Instead of executing every piece of logic on-chain, Midnight separates the contract's logic from its execution. With Compact, developers define the rules of a zero-knowledge proof system, enabling applications to prove facts without exposing sensitive data. It’s a practical shift toward secure, scalable, and user-protective Web3 design.
At Midnight, this isn’t just a theoretical improvement—it’s core to how the platform operates. Compact smart contracts let developers write verifiable, auditable logic while keeping inputs and execution off-chain. Combined with ZKPs and shielded transactions, they create an infrastructure that supports real-world use cases without compromising on privacy or decentralization.
If you're learning how to build smart contracts in Web3—or just curious how these pieces fit together—I highly recommend diving into Module 2 of the Midnight Developer Academy and reviewing the Compact Language Reference. These resources break down the concepts step by step and show how Midnight’s architecture turns advanced cryptography into practical developer tools.
I’ll be back next week with more insights as I continue to unpack the pieces that make privacy-first systems work in the decentralized world.
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