Layer-2 scaling solution Polygon has launched Nightfall to lower the transaction cost of private transfers of ERC20, ERC721, and ERC1155 tokens. This update to the original Nightfall network uses Optimistic Roll-up technology to reduce costs with privacy achieved by leveraging zero-knowledge proofs.
Due to rising demand from companies needing to interact with one another by utilizing smart contracts to manage the exchange of goods or services, Polygon has launched a public, privacy-focused Layer 2 roll-up solution called Polygon Nightfall.
In collaboration with Ernst & Young (EY), the project will enable accessibility and privacy for companies wanting to use Ethereum.The Polygon team launched the Nightfall Beta Mainnet on 17th May, which will test in collaboration with EY.
EY teamed up with Polygon to research and build permissioned, private industry blockchains for enterprises. EY already has two flagship blockchain-related services in EY OpsChain and its Blockchain Analyser.
Both now connect to Polygon Nightfall, and current users can access them by connecting to the Polygon Network.
Slow down, what’s a roll-up?
A roll-up allows off-chain aggregation of transactions inside an Ethereum smart contract, which reduces fees and congestion by increasing the throughput of the blockchain from its current 15 transactions per second (tps) to more than 1,000 tps.
The two approaches to rollups are Optimistic Roll-ups, and ZK-Roll-ups and they differ in the way they ensure validity. For Optimistic Roll-ups, validity is ensured by a fraud-proof and synchrony assumption, while for ZK-Roll-ups, validity is ensured by zero-knowledge proofs, which is the system Nightfall will use.
ZK-Roll-ups are a layer-2 scaling solution in which all funds are held by a smart contract on the main Ethereum chain. Meanwhile, it performs processes and storage off-chain where the validity of the sidechain is ensured by zero-knowledge proofs.
Zero-knowledge proof is a method by which one party (the prover) can prove to another party (the verifier) that they know a value X, without conveying any information apart from the fact that they know the value X.
Think of the way that your debit card or credit card operates when moving funds. These days it’s possible to push your money through several applications within a few minutes. For example, from your fiat bank account to a top-up card like Revolut or Monzo to an exchange like Coinbase.
These transactions seemingly occur in seconds but there are processes happening in the background that take longer. But as a user, you just need peace of mind that the money is available and safe.
Private transfer of crypto and NFTs
Nightfall enables the transfer of three essential cryptocurrency and NFT token classes in the blockchain industry. ERC20 is the most common standard used for creating and issuing smart contracts on the Ethereum blockchain.
ERC721 is a standard for representing ownership of non-fungible tokens, where each token is unique, and ERC1155.
A reasonably new token standard aims to take the best from previous standards to create a fungibility-agnostic and gas-efficient token contract.
Polygon Nightfall is part of Polygon’s suite of scalability solutions, including Polygon Hermez, Polygon Miden, and Polygon Zero. Nightfall differentiates itself as a privacy-focused roll-up designed for enterprise use cases.
It combines the concepts of optimistic roll-ups and Zero-Knowledge (ZK) cryptography to offer private and scalable transactions.
No value or destination traceback on Nightfall
Nightfall brings increased scalability and removes a barrier organizations face when using blockchain for daily activities—namely, a lack of privacy in transactions on public blockchains.
Nightfall adds a layer of confidentiality so that key transaction parameters such as the value and destination cannot be traced back.
These two features mean businesses see Nightfall as a way to execute their business logic and coordinate with their supply chain in a decentralized network at a sustainable price, all while maintaining the inherent security and privacy of the Layer-1 Ethereum network.
Nightfall is Polygon’s first blockchain solution for enterprises, enabling them to do their complex day-to-day functions easily. It uses a hybrid ZK – Optimistic roll-up to provide the following features to enterprises:
- Security: Security of Ethereum as a settlement layer
- Efficiency: Fast transactions & low fees
- Privacy: No third-party access to transactions and data
Why Polygon and Nightfall matter
The last 2 years have seen Polygon set new levels with the B2C side of its operations to become a leading blockchain with a well-developed and used ecosystem of dapps.
Through DappRadar users can track thousands of Polygon dapps across all the major categories as well as track Polygon NFTs through our dedicated NFT explorer.
The DappRadar Portfolio Manager tracks your Polygon assets so that users can keep tabs on all their Polygon activity, buy and sell NFTs, and more.
Fast transactions, low fees, and supporting dapps offering the same services as Ethereum counterparts have helped Polygon stay relevant and build a strong presence as the go-to Layer-2 solution.
However, Polygon recognizes that public blockchains are not suitable for commercial use since all transactions are visible to outside parties. Fundamentally, businesses will not want their transactional data to be on show to the public. This has nothing to do with hiding shady business. Simply, it’s about organizations’ direct competition with one another, and revealing critical financial strategies could lead to problems.
See your tokens, NFTs and DeFi positions across different blockchains, all in one place. Connect your Web3 wallet and check out your portfolio!
Smart contracts improve the supply chain industry
The global supply chain industry is worth an estimated $50 trillion and blockchain technology, more importantly, immutable ledgers and smart contracts can streamline things massively. OpsChain from EY is already helping companies track and manage their supply chains.
Nightfall will allow them to create NFTs representing real-life assets, traceable on-chain, and verifiable within the inventory. Moreover, using Nightfall will be faster and cheaper for organizations than legacy solutions.
A fact that will become increasingly important under the harsh economic conditions of the coming years. Simultaneously, the privacy of sensitive data is preserved.
Apart from this, there are use cases in industries, such as finance, healthcare, and education. Polygon matters because it has proven itself as a solid blockchain for smart contract applications to onboard users, while a solution like Nightfall matters because it can empower enterprises to transform the way they work.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.
