At this year’s Messari Mainnet Summit, Paul Brody, head of blockchain at Big Four accounting firm Ernst & Young (EY) told Decryption if the companyall on public blockchains.”
Recounting EY’s involvement in crypto, he emphasized that the firm was one of the earliest adopters in the world of traditional finance.
In 2015, EY formed a blockchain division to pursue work on public blockchains. At first, it worked with private blockchains, but that has “really slowed down over the years,” Brody said Decryption.
He explained: “Unlike others, we really create tools and applications in this space, so we build, for example, our own blockchain audit platform, where we can do on-chain and off-chain transaction reconciliation.”
EY’s in-house arsenal now contains a smart contract testing tool developed by the security team in Israel, the system is called EY Ops Chain which uses tokenization for traceability and transparency in the supply chain, and a Zero Knowledge (ZK) Optimistic Layer 2 Rollup for affordable transaction privacy for enterprises.
This last tool was donated to the public domain and refashioned into it Polygon Nightfall.
7 years of EY blockchain services
Brody attributes EY’s early adoption of crypto to the fact that senior leadership is convinced of the power of blockchain technology. “This is going to be the way of the future for most business-to-business transactions and we need to be more than just aware of it,” Brody said. “We have to go all in.”
According to Brody, approximately 65% of EY’s work on blockchain revolves around auditing.
The remaining slices are wider and more inclusive NFT tools, food traceability, and improving environmental, social, and governance (ESG) factors. Brody also said the company is creating a market for carbon offsets and carbon tracking tools.
“The pattern we see over and over again is that the first companies want to dip their toes in with the easy stuff. If you’re a bank that means you can sell Bitcoin and for clients, “he said. “Over time they move to more substantive activities: publishing assets, selling products and services, building. DeFi gear. I like to think of it as a slippery slope.
Bear market and Ethereum
Finally, Brody spoke at length about how the current bear market is affecting EY’s blockchain division, adding that clients in financial services are particularly concerned about large price fluctuations. Still, he said, he sees volatility as “a feature, not a bug.”
However, industrial clients are very different. However, “they see Ethereum as a common infrastructure for computing and business operations and what matters is the price of gas and the scalability of the network, not the price of the asset.”
Brody also said that EY has taken a “very hard line” against private blockchains and proprietary technology even though some clients occasionally question it.
This also makes the company particularly bullish on Ethereum.
“We made a very strategic decision to only build Ethereum. I have a limited engineering budget. I want us to be the best on earth in Ethereum-which is the biggest market-not pretty good in the other 20. The best on earth,” said Brody . “How long will it take for the competition to implement this strategy? I hope it will be a very long time.”