EY Upgrades Nightfall With Zero-Knowledge Tech for Private Ethereum Transactions

EY has rebuilt its enterprise-focused Ethereum layer-2 blockchain Nightfall as a zero-knowledge rollup, eliminating waiting periods for transaction finality and simplifying the platform’s architecture.

The update, released Wednesday, replaces Nightfall’s previous optimistic rollup design with a cryptographic approach that verifies transactions before submission to Ethereum. This removes the need for challenge periods that could delay finality for days.

Now dubbed Nightfall_4, EY’s technical transition offers several advantages beyond speed. 

Replacing a “cryptoeconomic approach with a cryptographic approach” simplifies Nightfall’s architecture because, as a result, there would be “no need to accommodate challenging incorrect blocks,” EY said in a statement.

The move provides “the same privacy and scaling that version 3 enabled, but now with near-instant finality and a simplified architecture,” Paul Brody, global blockchain lead at EY, said in a statement.

Though EY said Nightfall_4 and supporting tools are publicly available, their GitHub repository does not reflect the change and opens a 404 error, which means it hasn’t been updated.

EY did not immediately respond to Decrypt’s request for comment on that front.

From optimistic rollups to zero-knowledge

While optimistic rollups require game-theoretic security assumptions and economic incentives to catch fraud, zero-knowledge implementations provide stronger cryptographic guarantees.

The new design also enhances privacy through zero-knowledge proofs that allow transaction validation without revealing underlying data.

Nightfall remains permissioned for EY’s corporate clients despite its open-source code base. The platform enables private transactions on Ethereum while maintaining the main network’s security benefits and reducing costs.

Enterprise users, meanwhile, would still benefit from Nightfall’s integration of industry-standard identity certificates, which prevent anonymous usage while preserving transaction privacy.

EY began development of Nightfall in 2019. In a 2022 interview with Decrypt, EY blockchain lead said the firm wants “to be the best on earth at Ethereum.”

The timing coincides with improved regulatory conditions for privacy technologies, following the U.S. Treasury’s decision to lift sanctions on Tornado Cash, a previously blacklisted crypto mixer.

Edited by Sebastian Sinclair