Starknet developer StarkWare has integrated EY’s Nightfall privacy protocol to let institutions run private payments and decentralized finance (DeFi) activity on public Ethereum-aligned rails, targeting banks and corporates that need confidentiality without giving up auditability.
In a Tuesday release shared with Cointelegraph, StarkWare positioned the move as a way for enterprises to use a shared, open layer-2 rather than closed, bank-only networks, while working with a Big Four firm that already audits many of the organizations it wants to onboard.
The integration brings Nightfall, an open-source zero-knowledge (ZK) privacy layer built by EY, that lets transactions be verified without revealing underlying data, onto Starknet to enable private B2B and cross-border payments, confidential treasury management and 24/7 tokenized asset transfers onchain.
StarkWare said that institutions will also be able to access Ethereum DeFi for activities such as lending, swaps and yield strategies, with transactions private by default but supporting selective disclosure, auditability and Know Your Customer (KYC) protocols.
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Starknet and Nightfall target institutional flows
StarkWare frames this as a “major breakthrough” in making public blockchains usable for institutional capital that has so far been deterred by full onchain transparency and the resulting compliance and competitive risks.
Eli Ben-Sasson, StarkWare co-founder and CEO and a founding scientist of privacy-focused cryptocurrency Zcash (ZEC), said in the release that blockchains could give every institution “the equivalent of a private superhighway for stablecoins and tokenized deposits,” positioning Nightfall on Starknet as a concrete step toward that vision.
Alex Gruell, StarkWare’s global head of business development, told Cointelegraph that Nightfall was “particularly useful for institutions requiring ready-to-go KYC verification as part of their onboarding to the blockchain,” and part of a broader privacy push on Starknet.
Alex Gruell, global head of business development. Source: StarkWare
He said that while crypto native teams had “moved mountains” building ZK infrastructure, the EY-built system added a complementary layer of institutional credibility and “regulatory fluency.”
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Gruell also cast Starknet plus Nightfall as an interoperability layer between institutions, contrasting it with what he claimed are “siloed” institutional environments on rival networks, which he said “do not serve as an interoperability infrastructure,” and permissioned models such as Canton Network, which are “not yet integrated with the Web3 ecosystem.”
He stressed that Nightfall would remain permissionless and fully integrated into Starknet, with a staged rollout, where initial deployment focused on “private payments and transfers with compliance gating and secure sequencing in place,” while “verifier upgrades and expanded functionality follow as the system scales.”
Starknet’s growth and teething trouble
Starknet has steadily grown into one of the larger ZK rollups by total value locked (TVL), currently about $280 million, with usage primarily driven by DeFi protocols and native ecosystem apps.
At the same time, Starknet’s rapid scaling push has exposed reliability challenges. In 2025, the network suffered major outages tied to sequencer and infrastructure issues, prompting public post-mortems and commitments to harden reliability before courting more institutional flow.
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