The accounting firm Ernst & Young (EY) has published a zero-knowledge-proof-layer-2 protocol to solve the problem of rising transaction fees with Ethereum.
The Zero Knowledge Proof (ZKP) protocol aims to realize the private transfer of ERC-20 tokens while improving overall efficiency.
The project is called Nightfall 3 and combines zero-knowledge proofs with a new model that handles transaction verification. The combined protocol is called ZK-Optimistic Rollup, which combines ZKP transactions into groups, so-called rollups.
According to reports, the Ernst & Young (EY) team had previously brought ZKP contracts to the public.
Details of the ZK-Optimistic Rollup
Optimistic Rollup is one of many Layer 2 technologies introduced this year. The network does not check every transaction, but assumes that all transactions are correct and only intervenes if the user sees a wrong transaction by submitting “proof of fraud”.
The blog post added that with ZK-Optimistic Rollups, the protocol can cost around 8,200 gas per transaction while maintaining privacy.
“This is almost one-eighth of the cost needed to make a conventional, public ERC20 token transfer.”
Nightfall 3 is also reported to be designed to reduce the learning curve it takes developers to achieve data protection. It provides them with a standardized application programming interface (API) that is similar to other token transfer tools.
Paul Brody, Head of EY Global Blockchain, said:
“Based on EY experience, ZK-Optimistic roll-ups are currently among the most effective in balancing security incentives and mathematical efficiency for running private transactions on the public Ethereum network.”
Ernst & Young is a multinational professional services network headquartered in London, England.
Ethereum Gas Fee Update
A few months later, Ethereum’s average transaction fees returned to unsustainable levels.
According to data from BitInfoCharts, the average fee is currently $2.65 and was around that level last month.
Gas costs can vary from farm to farm, so simple ERC-20 transfers are cheap (currently), while complex smart contract interactions can cost more. Etherscan reports that the average price of Uniswap token exchanges is currently around $4.50. DEX users had to pay three-digit transaction fees in mid-May.
According to data from CoinGecko, Ethereum (ETH) did well even over the weekend, hitting a two-week high of just under $2,400. At the time of writing, it has fallen to4⁴ tv $ 2,260 and is near the support.
