BIG FOUR AUDITOR EY LAUNCHES ZERO-KNOWLEDGE SYSTEM FOR PRIVATE TRANSACTIONS ON ETHEREUM

Last updated: June 20, 2025, 00:01 | Written by: Cathie Wood

In a groundbreaking move poised to redefine enterprise blockchain solutions, Big Four auditor Ernst & Young (EY) has unveiled an updated version of its Nightfall system, a layer-2 rollup designed to facilitate private transactions on the public Ethereum blockchain.This innovative system leverages the power of zero-knowledge proofs (ZKPs), a cryptographic method that allows one party to prove to another that a statement is true without revealing any information beyond the validity of the statement itself.This marks a significant step towards enabling confidential and secure business logic on Ethereum, addressing a critical need for enterprises hesitant to expose sensitive data on a public ledger.The updated source code, dubbed Nightfall_4, has been released to the public domain, empowering developers and organizations to explore and implement privacy-focused blockchain applications. EY contributes the beta version of zero-knowledge-proof compiler Starlight to the public domain to enable secure, private business logic on Ethereum The EY and Polygon organizations update source code for blockchain privacy-based protocol NightfallEY's commitment to advancing blockchain technology underscores its dedication to fostering trust and innovation within the digital economy.

This development not only enhances privacy but also significantly improves efficiency and reduces transaction costs. Posted by u/Cointelegraph_news - 1 vote and no commentsWith Nightfall, a private ERC20 transfer is reportedly about one-eighth the cost of a conventional transfer. LONDON, Ap The EY organization today announces the launch of EY OpsChain Contract Manager (OCM), a transformative blockchain-enabled solution for contract management. EY OCM helps enterprises to execute complex business agreements, supporting confidentiality, helping improve time efficiency, and achieving cost reduction, with automatic adherence to the agreed terms.EY's efforts are contributing to a future where businesses can confidently harness the benefits of blockchain without compromising their data confidentiality.They are slated to be ready for full-scale product launch by 2025.

Understanding EY's Nightfall and Zero-Knowledge Proofs

EY's Nightfall is not just another blockchain solution; it's a meticulously crafted system designed to bridge the gap between enterprise needs and the capabilities of public blockchains like Ethereum.But what exactly is Nightfall, and how do zero-knowledge proofs play a crucial role?

What is Nightfall?

Nightfall is a layer-2 scaling solution built on top of the Ethereum blockchain. The EY organization today announces it has updated the public domain source code for Nightfall 1, a layer-2 roll-up that enables private transactions on the public Ethereum blockchain and the development of privacy-focused enterprise blockchain solutions.Layer-2 solutions are designed to offload transaction processing from the main chain, thereby reducing congestion and improving transaction speeds and costs. Big Four Auditor EY Launches Zero-Knowledge System for Private Transactions on EthereumSource: CointelegraphPublished onNightfall specifically focuses on enabling private transactions, meaning that sensitive information such as the sender, receiver, and transaction amount can be hidden from public view.The recent update, named Nightfall_4, further enhances these capabilities.

The key features of Nightfall include:

Privacy: Utilizes zero-knowledge proofs to ensure transaction confidentiality.
Scalability: Offloads transaction processing to a layer-2 rollup, reducing congestion on the Ethereum mainnet.
Cost-Effectiveness: Significantly reduces transaction costs compared to traditional Ethereum transactions.
Enterprise-Focused: Designed to meet the specific needs of businesses that require privacy and security.
Near-Instant Finality: The update provides near-instant finality of layer-1 blockchain transactions without the need for a challenge period.

The Power of Zero-Knowledge Proofs (ZKPs)

Zero-knowledge proofs are the cornerstone of Nightfall's privacy features.They allow a prover to convince a verifier that a statement is true without revealing any information about why it is true.Imagine proving you know the solution to a Sudoku puzzle without showing the completed puzzle itself – that's the essence of ZKPs.

ZKPs are a revolutionary technology with applications far beyond blockchain. Big Four auditor Ernst and Young has launched the prototype of a system that enables secure and private transactions to take place on the Ethereum (ETH) public network, according to a pressThey can be used in various scenarios where privacy is paramount, such as:

Secure Authentication: Verifying identity without revealing personal information.
Private Voting: Ensuring voter anonymity while maintaining the integrity of the election.
Confidential Data Sharing: Sharing data with third parties without exposing the underlying content.

In the context of Nightfall, ZKPs are used to prove the validity of transactions without revealing the details of the transaction itself. LONDON, Ap The EY organization today announces it has updated the public domain source code for Nightfall, a layer-2 roll-up that enables private transactions on the public Ethereum blockchain and the development of privacy-focused enterprise blockchain solutions.This means that only the parties involved in the transaction know the sender, receiver, and amount.Everyone else can verify that the transaction is valid but cannot glean any sensitive information.

EY's Commitment to Blockchain Innovation

EY's development and release of Nightfall is a testament to the firm's commitment to pushing the boundaries of blockchain technology.EY has been actively involved in blockchain research and development for several years, exploring various use cases and contributing to the open-source community.

Some of EY's notable blockchain initiatives include:

EY OpsChain: A suite of blockchain solutions for supply chain management, contract management, and other enterprise applications.
Blockchain Analyzer: A tool for auditing and analyzing blockchain transactions.
Collaboration with Polygon: Partnering to enhance the scalability and privacy of Ethereum-based solutions.
EY OpsChain Contract Manager (OCM): A transformative blockchain-enabled solution for contract management.

By open-sourcing Nightfall, EY is enabling other organizations to build upon its work and accelerate the adoption of privacy-focused blockchain solutions.This collaborative approach is crucial for fostering innovation and driving the widespread use of blockchain technology.

Benefits of Using Nightfall for Private Transactions

The adoption of Nightfall can bring numerous benefits to businesses seeking to leverage blockchain technology while maintaining privacy. LONDON, Ap /PRNewswire/ - The EY organization today announces it has updated the public domain source code for Nightfall 1, a layer-2 roll-up that enables private transactions onHere are some key advantages:

Enhanced Privacy: Protect sensitive transaction data from unauthorized access.
Reduced Transaction Costs: Lower fees compared to traditional Ethereum transactions.
Improved Scalability: Handle a higher volume of transactions without network congestion.
Compliance with Regulations: Meet data privacy requirements such as GDPR.
Competitive Advantage: Differentiate your business by offering privacy-focused services.

For example, a supply chain company could use Nightfall to track the movement of goods without revealing sensitive information about its suppliers or customers. The new source code for Nightfall, renamed Nightfall_4, replaces the prior version.This update provides the near-instant finality of layer-1 blockchain transactions without the need for a challenge period.Nightfall enables enterprises to orchestrate private transactions efficiently on Ethereum withoA financial institution could use it to process payments without exposing the transaction details to competitors. EY has announced a prototype that uses zero-knowledge proofs to allow companies to create ethereum tokens while keeping transaction private.These are just a few examples of how Nightfall can be applied in various industries.

Technical Details of Nightfall's Architecture

Nightfall employs a sophisticated architecture that combines several cutting-edge technologies to achieve its privacy and scalability goals. O sistema, apelidado EY OPS Chain Public Edition (PE), usa a tecnologia ZKP (zero-knowledge-proof - prova de conhecimento zero), um algoritmo alternativo para autenticar registros cont beis distribu dos, no qual as partes envolvidas fornecem provas de validade, mas todas as outras informa es permanecem criptografadas, incluindo suasHere's a brief overview of its key components:

Zero-Knowledge Proofs (ZKPs): Used to prove the validity of transactions without revealing the transaction details.
Optimistic Rollup: A layer-2 scaling technique that bundles multiple transactions into a single batch, reducing the load on the Ethereum mainnet.
Smart Contracts: Deployed on the Ethereum mainnet to manage the rollup and verify the ZKP proofs.
Off-Chain Computation: Transaction processing and proof generation are performed off-chain to improve scalability.

The interaction between these components ensures that transactions are processed efficiently and securely while maintaining the privacy of the involved parties. Big four auditing firm Ernst Young (EY) open sourced the code of its Nightfall Ethereum (ETH) private transactions solution and released it on GitHub on May 31.The updated Nightfall_4 further streamlines this architecture and enhances performance.

How to Get Started with Nightfall

Interested in exploring Nightfall and implementing private transactions on Ethereum?Here are some steps to get started:

Explore the Source Code: Visit the GitHub repository where EY has open-sourced the Nightfall code.Review the documentation and understand the architecture.
Set up a Development Environment: Install the necessary tools and libraries for building and deploying Ethereum smart contracts and generating ZKP proofs.
Experiment with Example Transactions: Try sending and receiving private ERC20 tokens using Nightfall.
Integrate Nightfall into Your Application: Adapt the code to fit your specific use case and integrate it into your existing application.
Contribute to the Community: Share your knowledge and contribute to the development of Nightfall by submitting bug reports, feature requests, or code contributions.

EY also provides various resources and support for developers interested in using Nightfall. Big four auditing firm Ernst Young (EY) open sourced the code of its Nightfall Ethereum private transactions solution and released it on GitHub on May 31. The readme information file featured on the GitHub repository explains the function of the software in question:You can find documentation, tutorials, and community forums on the EY website and GitHub repository.

The Future of Privacy on Ethereum

EY's Nightfall is just one example of the growing movement towards enhancing privacy on Ethereum.The Ethereum community is actively working on various privacy-enhancing technologies, including:

Zero-Knowledge Rollups (ZK-Rollups): A more advanced type of layer-2 rollup that uses ZKPs to achieve both privacy and scalability.
Privacy-Preserving Smart Contracts: Smart contracts that can execute code without revealing the underlying data.
Confidential Transactions: Transactions that hide the sender, receiver, and amount from public view.

These technologies are expected to play a crucial role in the future of Ethereum, enabling a wider range of applications that require privacy and security.Vitalik Buterin revealed in fall 2025 that a network upgrade had successfully verified a zero-knowledge Snark proof on the Ropsten testnet.As these technologies mature, we can expect to see more and more businesses and individuals adopting them to protect their data and maintain their privacy.

Challenges and Considerations

While Nightfall offers significant benefits, it's important to be aware of the challenges and considerations associated with implementing privacy-focused blockchain solutions.

Regulatory Compliance

Privacy technologies can sometimes raise concerns with regulators, who may worry about their potential use in illicit activities.It's important to ensure that your use of Nightfall complies with all applicable laws and regulations.KYC (""Know Your Customer"") and AML (""Anti-Money Laundering"") procedures need to be integrated thoughtfully to balance privacy with regulatory requirements. Using the latest privacy technology across the power of public blockchain. Implement the power of zero-knowledge proof methodology to help provide critical contract terms, transaction details, and value chain confidential information remain shielded, granting enhanced privacy.As the space matures, new regulatory frameworks and policies are likely to arise.

Performance Trade-offs

Generating and verifying ZKP proofs can be computationally intensive, which can impact performance.It's important to optimize your code and hardware to minimize these performance trade-offs.The ongoing development of more efficient ZKP algorithms is steadily reducing these challenges.Cloud-based infrastructure providers are also offering specialized hardware to accelerate ZKP computations.

Complexity

Implementing privacy-focused blockchain solutions can be complex and require specialized expertise.It's important to have a team of experienced developers and security professionals to ensure that your implementation is secure and reliable.

Scalability Limitations

While rollups significantly improve scalability, they are not a panacea. They are slated to be ready for full-scale product launch by 2025, the press release states.[BREAK] Ethereum's developers have long been working to support zero-knowledge proofs on the network, with Vitalik Buterin revealing in fall 2025 that a network upgrade had successfully verified a zero-knowledge Snark proof on the Ropsten testnetZK-rollups, while offering better privacy, can still face limitations in terms of transaction throughput. Nightfall uses Zero Knowledge Proof technology to provide private transfers of tokens on the public blockchain. It has a built-in, optimistic layer 2 rollup to increase throughput and reduce transaction costs. A private ERC20 transfer using Nightfall is approximately one eighth of the cost of a conventional transfer.Ongoing research and development are focused on addressing these limitations through techniques like recursive SNARKs and sharding.

Real-World Use Cases for Nightfall

Let's explore some specific real-world scenarios where Nightfall can be applied to enhance privacy and security:

Supply Chain Management: A manufacturer can use Nightfall to track the movement of goods through its supply chain without revealing sensitive information about its suppliers or pricing to competitors.This can prevent competitive intelligence gathering and ensure fair pricing agreements.
Healthcare Data Sharing: A hospital can use Nightfall to share patient data with researchers without revealing the patient's identity or medical history.This can enable valuable medical research while protecting patient privacy.
Financial Transactions: A bank can use Nightfall to process cross-border payments without exposing the transaction details to unauthorized parties.This can reduce the risk of fraud and ensure compliance with data privacy regulations.
Voting Systems: Implement secure and private voting systems where voters can cast ballots anonymously, preventing coercion and ensuring the integrity of the election process.
Digital Identity Management: Enable users to prove attributes about themselves (e.g., age verification) without revealing their underlying personal data.This can enhance online privacy and security.

The Role of Starlight

EY contributes the beta version of zero-knowledge-proof compiler Starlight to the public domain to enable secure, private business logic on Ethereum. Big Four auditor EY is rolling out free software designed to help companies use the public ethereum blockchain. BTC $103,184.32-0.02 % ETH $2,493.32 6.84 % USDT $0.This is a vital piece of the puzzle in allowing other developers to build secure, private applications.

Conclusion: Embracing Privacy in the Blockchain Era

EY's launch of its zero-knowledge system for private transactions on Ethereum through Nightfall marks a pivotal moment in the evolution of blockchain technology. Big Four Auditor EY Launches Zero-Knowledge System for Private Transactions on Ethereum. Big Four auditor Ernst and Young has launched the prototypeBy harnessing the power of zero-knowledge proofs, Nightfall offers a compelling solution for enterprises seeking to leverage the benefits of blockchain while maintaining the confidentiality of their sensitive data. Skip to main content Bitcoin Insider. MenuThis development is not just about technology; it's about building trust, fostering innovation, and empowering businesses to participate in the digital economy with confidence.

Key takeaways:

EY's Nightfall enables private transactions on the public Ethereum blockchain.
Zero-knowledge proofs are used to ensure transaction confidentiality.
Nightfall offers reduced transaction costs and improved scalability.
EY is committed to driving blockchain innovation and open-source collaboration.
The future of Ethereum is privacy-focused, with various privacy-enhancing technologies on the horizon.

As blockchain technology continues to evolve, privacy will undoubtedly become an increasingly important consideration.EY's Nightfall is a significant step in the right direction, paving the way for a more secure, private, and trustworthy blockchain ecosystem.Explore the opportunities offered by Nightfall, and consider how you can leverage its capabilities to enhance your business and protect your data.We invite you to delve deeper into the world of zero-knowledge systems and explore how it can transform your approach to data privacy and security.