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.
Nightfall “runs faster and with less complexity since you don’t need a challenger node,” Paul Brody, global blockchain lead at EY, told Decrypt.
EY representatives confirmed with Decrypt that the community edition has since been updated with a live section on their GitHub repository.
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.
EY maintains that Nightfall is not a permissioned blockchain because the certificates used “are a public, open standard” available from internet certificate authorities, without requiring approval from any centralized entity.
Nightfall was made for “confidential business transactions, not anonymous financial transfers,” EY stated in a document shared with Decrypt by Brody.
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.
Brody said he is “especially optimistic about usage” after the regulator’s decision.
“We think it is the crucial missing requirement to bring enterprise users on-chain,” he said.
Edited by Sebastian Sinclair
Editor’s note: Adds comments from EY representatives and Paul Brody