EY Changes Its Enterprise-Focused Ethereum Layer-2 Blockchain Nightfall to a Zero-Knowledge Rollup Design

Big Four accounting firm EY, formerly Ernst & Young, has changed its enterprise-focused Ethereum layer-2 blockchain Nightfall to a zero-knowledge rollup design

Big Four accounting firm EY, formerly Ernst & Young, has disclosed a change in the design of its enterprise-focused Ethereum layer-2 blockchain Nightfall to a zero-knowledge rollup.

The firm, which has been running Nightfall with an optimistic rollup design since 2019, says it is now switching to a ZK-rollup model as it becomes more accessible to users and Nightfall’s architecture is being streamlined with its fourth major update, “Nightfall_4.”

Announced on April 4, Nightfall_4 will also see nearly instant transaction finality on Ethereum and it is becoming more accessible to users with the addition of a new programming language, Aplomb, and a new documentation suite.

“This change in architecture means nearly instant finality, but it also makes operations simpler since we don’t need a challenger node to secure the network, which is used to detect and correct any errors in transactions,” an EY spokesperson told Cointelegraph.

However, with optimistic rollups, there is a period where transactions are challenged and if they are deemed incorrect, a challenger node will process a competing block.

But no such feature is present with zero-knowledge rollups, meaning that a transaction becomes final as soon as it is added into a Nightfall block, which is then rolled up and included in a single, smaller and more efficient batch on Ethereum.

The move away from optimistic rollups also means Nightfall users won’t need to challenge potentially incorrect transactions on Ethereum and wait out the challenging period, leading to faster transaction finality.

It is the fourth major update to Nightfall since EY launched the business-focused Ethereum layer 2 in 2019.

Nightfall enables the firm’s business partners to transfer tokens privately using the security of Ethereum while being cheaper than the base network. It is also used to identify and bind a verified identity to a public key through digital signatures in a bid to mitigate counterparty risk.

Recently, the firm has been advising firms in Hong Kong on how to use blockchain for cross-border payments.

Earlier this year, Nightfall was one of the few blockchains to remain unaffected by the US Treasury’s Office of Foreign Assets Control (OFAC) sanctions on crypto mixing service Tornado Cash.

At the time, Brody said the sanctions had a “chilling effect” on legitimate business user interest in Nightfall.

“We long ago took steps to make Nightfall unattractive to bad actors, since it cannot be used anonymously. But the removal of OFAC sanctions will really help people feel comfortable that using a privacy technology will not be risky.”

Nightfall’s code is open source on GitHub but it remains a permissioned blockchain for EY’s customer base, placing it in competition with the likes of the IBM-backed Hyperledger Fabric, R3 Corda and the Consensus-built Quorum.

Brody added that EY’s blockchain team is now working toward “a single environment that supports payments, logic, and composability.”

Currently, the firm requires Nightfall and Starlight, a tool that can change smart contract code to enable zero-knowledge proofs “to enable complex multiparty business agreements under privacy.”

“We’ll spend some time supporting Nightfall_4 deployments initially. Then we’ll move on to the development of Nightfall_5.”