Ernst & Young unveiled an enterprise contract management service that allows customers to post contracts on a public blockchain while keeping company information private through zero-knowledge circuits. The company markets its OpsChain Contract Manager as running on Ethereum, although it currently runs on Polygon proof-of-stake (PoS).
The accounting firm – one of the ‘big four’ alongside Deloitte, KPMG and PwC – has been playing with business implications for zk-proofs since 2018. The announcement could signal another concrete step toward the institutional use of public blockchains a month from now. after asset management giant BlackRock launched a tokenized fund on Ethereum.
Read more: Circle introduces a way to trade BlackRock tokenized fund shares for USDC
In a press release, EY said the service would bring business agreements to Ethereum, but this is not exactly the case. Nightfall, the zero-knowledge rollup that EY developed to do things like manage business contracts, actually runs on Polygon PoS, an independent blockchain.
EY Blockchain plans to move Nightfall to the Ethereum mainnet and to a layer 3 in Nightfall’s next upgrade, says Paul Brody, who has led EY’s blockchain department since 2016.
Brody, reached through a spokesperson, added that Nightfall was developed on Ethereum and is deployed on Ethereum’s test network, but so far EY industrial users have been attracted to Polygon because of its low transaction fees.
Private blockchains are not private
During a previous career stop, Brody was partially responsible for building IBM’s first blockchain based on the alpha version of Ethereum with the help of Ethereum co-founder Vitalik Buterin, Brody told Blockworks in an interview.
Using blockchain technology for businesses is not a new idea. In the earlier days of Bitcoin and blockchain, groups like the Distributed Ledger Group emerged to find ways for companies to leverage distributed ledger technology, often using private blockchains.
This era of the so-called enterprise blockchain has largely fallen out of view for the leading crypto industry. Brody said a future for blockchain applications for large companies will be on public blockchains like Ethereum.
Read more: Goldman Sachs head of digital assets: The future is in public blockchains
“The problem with private blockchains is that they actually offer no privacy,” says Brody. “People jumped into this without really understanding the technology, and it wasn’t until after they got into it that I thought, ‘Oh, everyone in the private chain can still see everything.'”
Private blockchains discouraged rivals from collaborating, in part because they would reveal sensitive information, such as the quantity and prices of a company’s purchases, Brody explained.
In addition to Nightfall, EY has also created Starlight, a zero-knowledge compiler that takes existing smart contracts and privatizes them with hashing.
With these tools, EY will let companies execute business contracts using Polygon’s smart contracts. Nightfall is only accessible to companies. The testnet is free and the entire product is priced by EY, Brody said, adding that using a public blockchain makes implementation costs cheaper for enterprise purposes because the underlying infrastructure has already been built.
A promotional document for the contract manager states that EY’s product “revolutionizes the way companies help manage their contracts by using privacy-based blockchain technology to streamline processes and increase transparency.”
