EY releases code for zero-knowledge Layer 2 protocol built on Ethereum

“Big Four” consultancy EY said Friday that it is open-sourcing the prototype code for Nightfall 3, a Layer 2 protocol focused on Ethereum scaling that, like the firm’s past releases, utilizes zero-knowledge proofs. 

At their heart, rollups are intended to move the processing or execution of Ethereum-based transactions from the primary network, or Layer 1, to a secondary layer, the idea being that such an approach can improve transaction throughput. Rollups exist as smart contracts on Ethereum.

One particular form of rollups being pursued by developers in the Ethereum space are so-called optimistic rollups, which, as EY notes, are named as such “because the system assumes the transactions to be valid unless proven otherwise and eliminates the process of having all participants verify all transactions.” This scaling approach has drawn VC interest, being viewed as a means to scale the Ethereum network while work on the next iteration of Ethereum continues.

Per EY’s statement, the company built the new tool in response to “network congestion and raised transaction costs” in light of the platform’s use by DeFi protocols and their user bases.

“Based on EY experience, ZK-Optimistic roll-ups are currently among the most effective in balancing security incentives and mathematical efficiency for running private transactions on the public Ethereum network. As we have in the past, we are again contributing this code into the public domain to speed up enterprise adoption of this technology,” Paul Brody, EY’s global blockchain lead, said in a statement.