Big Four accounting firm EY, previously known as Ernst & Young, has transitioned its enterprise-focused Ethereum layer-2 blockchain, Nightfall, to a zero-knowledge rollup architecture. This change is in response to corporate clients’ increasing comfort with privacy solutions as U.S. sanctions ease.
In an announcement made on April 2, EY revealed that the updated source code, designated “Nightfall_4,” simplifies the network’s design and provides near-instant transaction finality on Ethereum, improving accessibility for users compared to the prior optimistic rollup model.
According to the global blockchain leader at EY, the switch to a ZK-rollup structure “ensures instant finality and simplifies operations, as there’s no need for a challenger node to secure the network,” which typically verifies transaction accuracy.
This shift away from optimistic rollups means that Nightfall users are no longer required to challenge potentially invalid transactions on Ethereum, thus eliminating the need to endure a waiting period for transaction finality, resulting in quicker confirmations.
With zero-knowledge rollups, transactions become final immediately upon their inclusion in a Nightfall block, according to EY.
This marks the fourth significant update to Nightfall since its inception as a business-oriented Ethereum layer 2 in 2019.
Nightfall allows the company’s business partners to privately transfer tokens while benefiting from Ethereum’s security at a lower cost compared to the base network. It utilizes a technology that associates a verified identity with a public key via digital signatures to mitigate counterparty risk.
The removal of sanctions against the crypto mixing service Tornado Cash, as noted by Brody, has “helped people feel more comfortable” as it previously had a dampening effect on legitimate business interest.
Despite EY’s efforts to ensure Nightfall is unattractive to malicious actors—since it cannot be used anonymously—the easing of sanctions has alleviated concerns over utilizing privacy technologies.
While Nightfall’s code is publicly accessible on GitHub, it remains a permissioned blockchain tailored for EY’s clientele, competing with other blockchain solutions like IBM’s Hyperledger Fabric, R3 Corda, and the Consensus-developed Quorum.
Brody emphasized that EY’s blockchain team is focused on creating “a unified environment that supports payments, logic, and composability.”
Currently, the firm is navigating the use of Nightfall alongside Starlight—a tool that modifies smart contract code to implement zero-knowledge proofs for complex multiparty business agreements while maintaining privacy.
“We’ll spend some time initially supporting Nightfall_4 deployments,” Brody stated, “before progressing to the development of Nightfall_5.”