EY Upgrades Nightfall L2, Easing Privacy Concerns
Ernst & Young (EY) has significantly upgraded its enterprise-grade Ethereum Layer-2 blockchain, Nightfall, transitioning to a zero-knowledge (ZK) rollup architecture. This move, announced April 2nd, directly addresses corporate client concerns regarding data privacy, particularly in light of eased US sanctions on privacy-enhancing technologies.
Key Improvements in Nightfall_4
The updated Nightfall_4 source code simplifies the network's architecture, providing near-instant transaction finality on Ethereum. This is a considerable improvement over the previous optimistic rollup-based version. According to EY's global blockchain leader, Paul Brody, the ZK-rollup model offers "instant finality" and simpler operations, eliminating the need for challenger nodes to validate transactions.
- Enhanced Privacy: ZK-rollups inherently offer stronger privacy compared to optimistic rollups.
- Faster Finality: Transactions are finalized immediately upon inclusion in a Nightfall block.
- Simplified Architecture: The new design streamlines network operations and enhances accessibility.
This is the fourth major update to Nightfall since its 2019 launch. Nightfall allows EY's business partners to privately transfer tokens on Ethereum, offering cost savings compared to the base network. It also incorporates identity verification through digital signatures to mitigate counterparty risk.
Easing Sanctions and Increased Confidence
Brody highlighted that the lifting of US sanctions on Tornado Cash has significantly boosted confidence among businesses. While Nightfall was already designed to be resistant to misuse, the removal of sanctions has alleviated concerns about using privacy-enhancing technologies.
Nightfall's open-source code (available on GitHub) remains a permissioned blockchain for EY's clients, competing with solutions such as Hyperledger Fabric, R3 Corda, and Quorum.
Future Developments
EY's blockchain team is working towards a unified platform supporting payments, logic, and composability, intending to merge Nightfall and Starlight (a tool enabling zero-knowledge proofs for complex agreements). Following the Nightfall_4 deployment, the team will focus on developing Nightfall_5.
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