This paper presents a rigorous performance evaluation of an all-photonic format conversion framework designed to transition a 40-Gbps return-to-zero on–off keying (RZ-OOK) data stream directly into a binary phase-shift keying (BPSK) format using a nonlinear optical loop mirror (NOLM). Operating entirely within the photonic transport layer, the proposed subsystem exploits cross-phase modulation (XPM) inside a 500 m highly nonlinear fiber (HNLF) loop to achieve a precise nonlinear \(\pi\) -phase shift at a calibrated control pump peak power of 21.5 dBm. To validate its operational viability under realistic wavelength division multiplexing (WDM) deployment constraints, the continuous-waveform propagation is simulated under severe localized inter-symbol interference (ISI), chromatic dispersion, and stochastically distributed amplified spontaneous emission (ASE) noise floors. The performance of the restored constellation space is benchmarked via decision-directed tracking, demonstrating a highly compliant corrected signal Error Vector Magnitude (EVM) of 12.44%, falling comfortably beneath the 17.50% Forward Error Correction (FEC) limit. Compared to conventional software-defined electronic transceivers, this hardware-driven format converter eliminates power-hungry Optical–Electrical–Optical (O-E-O) bottlenecks and digital signal processing latency, establishing a scalable, highly sustainable, and physically secure solution for next-generation, high-density optical routing backbones.
