The Big Four accounting firm EY, formerly known as Ernst & Young, has made significant strides in enhancing its enterprise-focused Ethereum layer-2 blockchain, Nightfall. The firm has transitioned to a zero-knowledge rollup design to meet the evolving demands of its corporate clients, particularly in light of easing U.S. sanctions on privacy technologies.
In an announcement made on April 2, EY revealed that the new version of Nightfall, referred to as “Nightfall_4,” simplifies the network’s architecture while delivering near-instant transaction finality on the Ethereum blockchain. This update is a considerable improvement from its previous optimistic rollup-based architecture, making it more accessible for users.
Paul Brody, EY’s global blockchain leader, shared insights with Cointelegraph, stating that the switch to a ZK-rollup model brings instant transaction finality and simplifies operational processes. Unlike previous models requiring challenger nodes to secure the network and verify transactions, Nightfall_4 enables transactions to become final as soon as they are incorporated into the blockchain.
The transition away from optimistic rollups means users will no longer need to challenge potentially incorrect transactions and endure waiting periods for resolution, thus enhancing the overall efficiency of the system. With zero-knowledge rollups, transactions are effectively finalized immediately, streamlining operations for business partners.
This update marks the fourth major enhancement to Nightfall since its launch in 2019. The platform allows EY’s partners to conduct private token transfers securely on Ethereum while remaining cost-effective compared to the base network. Notably, it utilizes technology that links verified identities to public keys through digital signatures, thereby mitigating counterparty risk.
Addressing Regulatory Concerns
Brody also addressed the impact of the U.S. Treasury’s Office of Foreign Assets Control (OFAC) sanctions on the cryptocurrency mixing service Tornado Cash, noting that such regulations had previously deterred legitimate business users from leveraging privacy technologies. Despite EY’s measures to deter bad actors, the removal of these sanctions has fostered a sense of security, encouraging businesses to embrace privacy solutions.
While Nightfall’s code has been made open-source on GitHub, it remains a permissioned blockchain tailored for EY’s clients, positioning it against established competitors such as IBM-backed Hyperledger Fabric, R3 Corda, and Consensus-built Quorum. EY’s blockchain team is actively working towards creating a unified environment that facilitates payments, logic, and composability.
Looking ahead, Brody mentioned that the firm will initially focus on supporting deployments of Nightfall_4 before progressing to the development of Nightfall_5, indicating EY’s commitment to continuous improvement in blockchain technology for enterprise applications.
For further insights on Ethereum and its innovations, consider exploring guides like “What are native rollups? Full guide to Ethereum’s latest innovation.”
