StarkWare incorporated EY’s Nightfall privacy protocol into Starknet. This allows institutions to execute private payments and DeFi on public Ethereum-related networks. It targets banks and corporations that require private transactions while maintaining auditability.
In an announcement on Tuesday, the company said that the upgrade allows institutions to utilize a shared open network instead of closed systems that cater to banks.
Nightfall is an open-source protocol developed by EY that is based on zero-knowledge verification. It verifies transactions while keeping transactional details private.
Private DeFi Access Expands for Institutions on Starknet
The integration of Nightfall into Starknet allows private B2B transactions, international payments, and confidential treasury operations.
The protocol also allows for the continuous on-chain movement of tokenized assets. This allows institutions to execute internal movements without revealing transaction details to the public blockchain.
StarkWare said that the integration allows Ethereum DeFi access for institutional users. These users can access DeFi protocols while maintaining the privacy of the transaction.
The protocol allows for privacy while enabling institutions to disclose details to regulators for audit purposes.
StarkWare said that the integration is a major milestone in institutional blockchain adoption. Transparency on public blockchains has always been an issue for institutional adoption because of the risks of losing competitive advantage.
StarkWare Co-founder and CEO Eli Ben-Sasson said that the partnership brings public blockchain utility closer to institutional requirements. He said that blockchains can enable every organization to have its private channel for stablecoins and tokenized deposits.
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According to Alex Gruell, StarkWare’s global business development head, Nightfall is immediately available for KYC-friendly use. This can potentially ease the onboarding of enterprises into blockchain environments.
Source: StarkWare
Starknet–Nightfall Boost Institutional Interoperability
Gruell mentioned that crypto-based teams developed much of the existing zero-knowledge tech stack. He said that EY brings regulatory familiarity that many organizations need to see before engaging with blockchain-based tools.
Gruell also noted that Starknet and Nightfall form an interoperability layer. He compared this to what he called institutional silos on other blockchain networks. “Such models do not offer widespread connectivity between organizations,” he said.
Gruell added that permissioned models like the Canton Network have limited connectivity to Web3 environments. Starknet is an open system that does not suffer from such problems.
Nightfall is an open system on Starknet. The rollout of Nightfall is in phases. The initial phase is private transactions with compliance features and secure sequencing.
The verifiers will be upgraded along with new features as usage increases. Scalability upgrades will be implemented as usage increases.
Starknet is now a leading zero-knowledge rollup in terms of total value locked. TVL is currently around $281 million. Most of the usage is for DeFi protocols and Starknet-based ecosystems.
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