Starknet integrates EY Nightfall for private, auditable DeFi
StarkWare has integrated EY’s Nightfall privacy protocol into Starknet to enable institutions to conduct private payments and decentralized finance (DeFi) activity on public Ethereum-aligned infrastructure while maintaining auditability. The company announced the integration on Tuesday, positioning it as a way for banks and corporates to use a shared, open layer-2 network rather than closed, institution-only systems.
Nightfall, an open-source zero-knowledge (ZK) privacy layer developed by EY, allows transaction verification without disclosing underlying data. Running Nightfall on Starknet is intended to support private B2B and cross-border payments, confidential treasury operations, and 24/7 on-chain transfers of tokenized assets.
According to StarkWare, institutions will also be able to access Ethereum-based DeFi services such as lending, swaps, and yield strategies. Transactions are private by default, with options for selective disclosure, audit trails, and Know Your Customer (KYC) controls.
Institutional adoption focus
StarkWare characterized the move as a significant step toward making public blockchains workable for institutional capital that has been hesitant due to full on-chain transparency and related compliance and competitive concerns.
Eli Ben-Sasson, StarkWare co-founder and CEO and a founding scientist of Zcash (ZEC), said the combination could give institutions the functional equivalent of a private “superhighway” for stablecoins and tokenized deposits, describing Nightfall on Starknet as progress toward that objective.
Alex Gruell, StarkWare’s global head of business development, said Nightfall is particularly useful for institutions that require built-in KYC verification as part of blockchain onboarding and noted it forms part of a broader privacy initiative on Starknet. He added that EY’s system brings additional institutional credibility and regulatory familiarity to the stack.
Gruell also presented Starknet combined with Nightfall as an interoperability layer for institutions, contrasting it with what he described as siloed institutional environments on competing networks and permissioned models such as Canton Network, which he said are not yet fully integrated with the broader Web3 ecosystem.
He emphasized that Nightfall will remain permissionless and fully integrated within Starknet. The rollout will be staged, initially focusing on private payments and transfers with compliance gating and secure sequencing, followed by verifier upgrades and expanded features as the system scales.
Starknet growth and reliability
Starknet has grown into one of the larger ZK rollups by total value locked (TVL), currently about $280 million, with activity largely driven by DeFi protocols and native ecosystem applications.
Rapid scaling has also highlighted reliability challenges. In 2025, the network experienced major outages linked to sequencer and infrastructure issues, leading to public post-mortems and commitments to strengthen reliability before pursuing broader institutional adoption.
Stay informed, read the latest news right now!
Disclaimer
The content on TrustsCrypto.com is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are highly volatile, always do your own research before making decisions.
Some content may be assisted by AI and reviewed by our editorial team, but accuracy is not guaranteed. TrustsCrypto.com is not responsible for any losses resulting from the use of information provided.
