EY upgrades L2 Nightfall as the slashing orders against Tornado Cash by the United States are relaxed.

The Big Four accounting firm – EY, formerly known as Ernst & Young, has transformed the enterprise-focused Ethereum layer-2 blockchain – Nightfall, into a zero-knowledge rollup design as its business clients feel more comfortable with security solutions amid the easing of U.S. slashing orders.

EY announced on April 2 that the new source code of Nightfall, "Nightfall_4", simplifies the architecture of the network and provides nearly instant transaction finality on Ethereum, making it more accessible for users compared to the previous optimistic rollup-based version.

Paul Brody, the global blockchain leader at EY, revealed that transitioning to a ZK-rollup model "means it provides immediate finality (finality), but also simplifies operations as users do not need to operate a node to secure the network," which verifies the accuracy of transactions.

The transition of Nightfall from optimistic rollup to zero-knowledge rollup eliminates the need for users to dispute potentially inaccurate transactions on Ethereum. According to EY, this change ensures the instant finality of transactions when included in the Nightfall block.

The upgrade marks the fourth major improvement to Nightfall since its launch in 2019. Designed for enterprises, Nightfall allows for the movement of private tokens while leveraging the security of Ethereum at a lower cost compared to the underlying network. The platform also integrates verified identity linkage technology with public keys through digital signatures, aiming to minimize counterparty risk.

OFAC's slashing order against Tornado Cash once discouraged investors

Paul Brody, the head of EY's blockchain division, noted that initially, the slashing orders imposed by the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) on Tornado Cash prevented legitimate business users from participating in the market.

"Although from the very beginning, the company has taken steps to make Nightfall difficult to exploit by bad actors, as it does not allow for anonymous transactions, the removal of OFAC's slashing order has reassured users that security technologies can become safe for business," Brody stated.

The open-source code of Nightfall is available on GitHub, but it remains a closed blockchain, serving exclusively the clients of EY, competing with other enterprise blockchain solutions like Hyperledger Fabric supported by IBM, R3 Corda, and Quorum developed by ConsenSys.

Brody revealed that EY's blockchain team is aiming for a unified, logical, and integrative payment environment. Currently, Nightfall relies on Starlight, a smart contract code modification tool that enables the use of zero-knowledge proofs for complex multi-party business agreements.

"Initially, the company will focus on supporting the deployment of Nightfall_4, and then will shift efforts towards developing Nightfall_5," Brody stated.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do thorough research before making decisions. We are not responsible for your investment decisions.

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Viet Cuong

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