EY adopts zero-knowledge rollup for Nightfall blockchain update

EY, formerly Ernst & Young, has transitioned its enterprise-focused Ethereum (CRYPTO:ETH) layer-2 blockchain, Nightfall, to a zero-knowledge rollup (ZK-rollup) model.

This change aims to simplify operations and enhance transaction finality as corporate clients regain confidence in privacy tools following eased U.S. sanctions on Tornado Cash (CRYPTO:TORN).

In its April 2 announcement, EY introduced "Nightfall_4," a redesigned version of the blockchain that eliminates the need for challenger nodes, which were previously required to verify transactions under the optimistic rollup system.

Paul Brody, EY’s global blockchain leader, explained that the ZK-rollup model ensures instant transaction finality by confirming correctness at the time of inclusion in a block.

“This makes operations simpler,” said Brody, emphasising the efficiency gained through this update.

Nightfall was first launched in 2019 and has undergone four significant updates since.

The platform enables private token transfers using Ethereum’s security features while reducing costs compared to Ethereum’s base network.

It also incorporates identity verification through digital signatures to mitigate counterparty risks.

The easing of sanctions on Tornado Cash by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) has reportedly alleviated concerns among businesses about using privacy technologies.

Brody noted that while EY had already implemented measures to deter misuse of Nightfall, such as preventing anonymous usage, the removal of OFAC sanctions has further reassured clients about the safety and legitimacy of privacy tools.

Nightfall’s source code remains open-source on GitHub but operates as a permissioned blockchain for EY’s clients.

It competes with other enterprise blockchain solutions like Hyperledger Fabric and R3 Corda.

EY is also working on integrating Nightfall with Starlight, another tool designed for enabling zero-knowledge proofs in smart contracts.