Starknet integrates EY Nightfall to offer institutional privacy on

Starknet, the ZK roll‑up built by StarkWare, announced that it will embed EY’s Nightfall privacy protocol to let institutions run confidential payments and DeFi activity on public Ethereum‑aligned infrastructure [1]. The integration is presented as a way for banks and corporates to keep transaction data private without sacrificing auditability or regulatory compliance.

Key takeaways

• Nightfall is an open‑source zero‑knowledge layer created by EY that verifies transactions without revealing underlying data [2].
• The rollout will start with private payments and transfers that include compliance gating and secure sequencing, followed by verifier upgrades and expanded functionality [1].
• Starknet remains permissionless; the protocol is positioned as an interoperability layer for institutions, contrasting with “siloed” rival networks and permissioned models like Canton [1].
• Starknet’s total value locked is about $280 million, driven mainly by DeFi protocols, but the network has faced reliability outages in 2025 that it is working to resolve before courting more institutional flow [2].

Building an institutional‑grade privacy layer on a public roll‑up

StarkWare’s integration brings Nightfall’s zero‑knowledge proofs to Starknet, enabling “private B2B and cross‑border payments, confidential treasury management and 24/7 tokenized asset transfers on‑chain,” according to the company’s release [2]. The protocol also supports “selective disclosure, auditability and Know Your Customer (KYC) protocols,” allowing institutions to meet regulatory requirements while keeping transaction details hidden from the public ledger [2].

Alex Gruell, StarkWare’s global head of business development, said the EY‑built system adds “institutional credibility and regulatory fluency” to the existing ZK infrastructure that crypto‑native teams have built [1]. He framed Starknet plus Nightfall as an “interoperability layer between institutions,” contrasting it with what he described as “siloed” environments on rival networks and with permissioned solutions such as the Canton Network that are not yet integrated with the broader Web3 ecosystem [1].

Eli Ben‑Sasson, StarkWare co‑founder and CEO, described the vision as giving each institution “the equivalent of a private superhighway for stablecoins and tokenized deposits,” positioning Nightfall on Starknet as a concrete step toward that goal [2].

Why it matters

The partnership seeks to address a core barrier for institutional capital: the tension between blockchain transparency and the need for confidentiality. By offering a permissionless, audit‑ready privacy layer, Starknet hopes to attract banks and corporates that have so far avoided public blockchains due to compliance and competitive risks [2]. However, the network’s recent reliability challenges—major outages in 2025 linked to sequencer and infrastructure issues—highlight the need for continued engineering improvements before large‑scale institutional adoption can be realized [2].