StarkWare developer StarkWare has partnered with EY’s Nightfall privacy protocol to enable institutions to conduct private payments and decentralized finance (DeFi) activities on public Ethereum-aligned rails. This collaboration is aimed at banks and corporates seeking confidentiality without compromising auditability.
In a recent announcement shared with Cointelegraph, StarkWare emphasized the importance of utilizing a shared, open layer-2 solution instead of closed, bank-exclusive networks. By teaming up with a Big Four firm known for auditing many of the organizations it aims to onboard, StarkWare aims to provide a more inclusive and transparent ecosystem.
The integration of Nightfall, a zero-knowledge (ZK) privacy layer developed by EY, onto Starknet enables private B2B and cross-border payments, confidential treasury management, and onchain tokenized asset transfers. This integration also grants institutions access to Ethereum DeFi services such as lending, swaps, and yield strategies, with transactions designed to be private by default while still supporting selective disclosure, auditability, and Know Your Customer (KYC) protocols.
Related: Arbitrum, Optimism, and Base share insights following Vitalik’s L2 scaling inquiry
Starknet and Nightfall’s Focus on Institutional Flows
StarkWare views this collaboration as a significant advancement in making public blockchains suitable for institutional capital that has been hesitant due to concerns regarding onchain transparency and associated compliance and competitive risks. Eli Ben-Sasson, co-founder and CEO of StarkWare and a founding scientist of Zcash (ZEC), believes that blockchains have the potential to provide institutions with a private superhighway for stablecoins and tokenized deposits, with Nightfall on Starknet serving as a key step towards realizing this vision.
Alex Gruell, StarkWare’s global head of business development, highlighted Nightfall’s utility for institutions requiring seamless KYC verification as part of their blockchain onboarding process. He also emphasized Starknet’s broader privacy initiatives and the added credibility and regulatory compliance that the EY-built system brings to the table.
Alex Gruell, global head of business development. Source: StarkWare
Gruell positioned Starknet and Nightfall as an interoperability layer for institutions, contrasting it with siloed environments on other networks and permissioned models like Canton Network that are not yet integrated with the Web3 ecosystem. He assured that Nightfall would remain permissionless and fully integrated into Starknet, with a phased rollout plan focusing initially on private payments and transfers before expanding functionality as the system scales.
Starknet’s Growth and Challenges
Starknet has emerged as one of the leading ZK rollups by total value locked (TVL), currently standing at around $280 million. Its usage is primarily driven by DeFi protocols and native ecosystem applications. However, the network has faced reliability issues during its rapid scaling efforts, with major outages in 2025 linked to sequencer and infrastructure issues. Public post-mortems were conducted, and efforts to enhance reliability were made before attracting more institutional flow.
Magazine: Return to Ethereum — Exploring the journeys of Synthetix, Ronin, and Celo
