Taiko is a Layer2 project built on Multi-proofs, praised by Vitalik as one of the important development directions for Ethereum’s finality. What makes it special?
What is Multi-proofing? How is Taiko different from other Layer2 solutions?
Many well-known VCs favor Taiko, what are the technical advantages of Taiko?
Vitalik highly praised Taiko, is Taiko expected to open the way for Ethereum’s finality?
Due to the inability of single-proof solutions to handle the bugs hidden in the complex code of zkEVM, Vitalik proposed Multi-proofs as one of the important development directions for the future finality of Ethereum.
Taiko is one of the few Layer2 projects built on Multi-proofs. On May 27th, Taiko went online on Ethereum, and tokens of the project have successively been listed on mainstream exchanges recently, generating continuous market discussion. So, what sets Taiko apart from other Layer2 solutions? What are the technical advantages and innovations behind Taiko?
Taiko is a Type-1 zkEVM, providing the same opcodes and functions as Ethereum, ensuring high compatibility with the existing Ethereum ecosystem. One of the main differences between Taiko and other Rollups is that Taiko adopts the Based Rollup mechanism, which does not rely on centralized sequencers but relies on Ethereum validators to order transactions and blocks.
At the end of 2023, Taiko co-founder Daniel Wang proposed the concept of “Based Contestable Rollup (BCR)”, which introduces a Contestable mechanism. The Taiko team chose the Contestable design for three main reasons:
Firstly, Based Rollup does not require permission and must introduce “higher-level proofs” to resolve potential bugs in the software. This avoids the need for a centralized network to shut down for data reconciliation. Of course, as the Taiko network runtime increases, this reconciliation mechanism can gradually be eliminated.
Secondly, although SGX proofs are thousands of times cheaper compared to zero-knowledge proofs, they are not the most ideal or decentralized verification method. The Contestable design allows challenges to be raised when there are doubts about SGX proofs, requiring higher-level proofs to re-verify blocks. This not only reduces costs but also increases the credibility of verification.
Lastly, Contestable Rollup offers flexibility and extensibility, serving as an abstraction of zkRollup and Optimistic Rollup. For example, if zero-knowledge proofs become cheaper in the future, Contestable Rollup can be configured as a pure zkRollup, or tailored to pure Optimistic Rollup based on application needs, adapting to different verification requirements.
In March of this year, Taiko completed a $15 million Series A funding round, with investors including Sequoia China, Generative Ventures, Hashed, Lightspeed Faction, Token Bay Capital, and Flow Traders. So why are so many VCs optimistic about Taiko?
Previously, Vitalik has always believed that Ethereum will eventually move towards zkEVM. However, the single-proof solution of zkEVM cannot handle the bugs hidden in the complex code of zkEVM. Vitalik believes that Multi-proofs generate multiple proof types for a single block, so even if one type of proof encounters issues, other proof types can continue to ensure the normal operation of the system and promptly detect any error state transitions. Taiko is essentially the practice and application of Multi-proofs, with its BCR framework involving Multi-proofs. Specifically, Taiko is divided into three main modules: Multi-Prover, Layer 2 Rollup, and Taiko Protocol.
Multi-Prover: Using multiple integrated proof systems such as zkVM and SGX, directly compiling and executing the Ethereum Virtual Machine based on Rust, generating zero-knowledge or TEE proofs to verify the accuracy and integrity of Ethereum block execution.
Layer 2 Rollup node: Responsible for managing and executing transactions on Layer 2, while interacting with Ethereum Layer 1 (L1). Through Layer 2 Rollup technology, Taiko can increase Ethereum’s transaction throughput, reduce transaction costs, and maintain decentralization and security.
Taiko Protocol: Defines and enforces the rules of Layer 2 Rollup, ensuring transaction accuracy and network security. Through smart contracts and decentralized verification, the Taiko Protocol achieves efficient extension of Ethereum while preserving its decentralization and security features.
Overall, the key innovation of the Taiko Protocol is the BCR framework (Based Contestable Rollup), built on Multi-proofs (interactive proofs by multiple provers). The core of the BCR framework is “competition”: anyone can become a proposer, submit block proposals, and any verifier who disagrees with the state transition results can submit security-level challenge proofs, changing L2 block states and choosing between correct and incorrect forks.
Proposers need to package user transactions and generate zero-knowledge proofs, multiple proposers can compete to submit blocks; verifiers are responsible for verifying the blocks and zero-knowledge proofs submitted by proposers, with multiple verifiers able to compete to verify blocks. This process not only ensures decentralization of block generation and submission but also further enhances network security.
Since 2022, Taiko has been in development, with over 1.1 million unique wallets, over 30,000 decentralized proposers, and over 14,000 decentralized verifiers in the testing network phase. On May 27th, Taiko officially went live on the mainnet. According to data from the official Taiko website, there are currently over 100 projects in the Taiko ecosystem, covering categories such as wallets, NFT markets, oracles, DeFi, AI applications, and more. Recently, the rapid development of the Taiko ecosystem has attracted a group of high-quality projects, including Pyth, Etherscan, Pancakeswap, Layer Zero, and others.
The market also holds a positive attitude towards the launch of Taiko’s mainnet. In an article released by Vitalik titled “Layer 2s as cultural extensions of Ethereum”, when mentioning Taiko, he stated: “Every Ethereum L2 has its unique soul, Taiko emphasizes ‘seamless user experience,’ ‘community-centric,’ ‘security-first,’ and ‘Based.’ I am delighted to see Taiko as a Based Rollup platform being launched, Ethereum benefits from the adoption of various L2s using different methods, and I appreciate that Taiko is one of the first projects moving in this direction.”
The well-known VC Hashed stated: “Imagine a world where Ethereum’s scalability knows no bounds, transaction speeds are as fast as lightning, and user privacy is sacred and inviolable. This is not a distant dream but a rapidly approaching reality, all thanks to Taiko.”
From the above, it can be seen that Taiko has many technical advantages, although it is favored by many big VCs. However, Taiko has a relatively short time since its launch, which still needs to be validated by the market. In addition, there have been controversies within the community regarding the token economics announced by Taiko, with some believing the rules are opaque. Taiko co-founder and CEO Daniel Wang replied in a post on Discord that the opaque rules are due to the fact that transparency also cannot resolve disagreements, and everyone has a strong subjectivity in defining “fairness”, which cannot be unified, nor are they attempting to reach a consensus.
Looking at long-term development, the zkEVM ecosystem has been slow to develop, while Op-based Layer2 solutions like Arbitrum and Optimism have taken the lead in ecosystem construction. Optimism has built a strong ecosystem through Op Stack open-source, while Arbitrum has constructed a permissioned ecosystem through L3. This is similar to the situation where public chain technologies like Solana may be more advanced than Ethereum, but Ethereum’s development is still better than Solana. From the current development status, the zk-based ecosystem lags behind the Op-based ecosystem in ecosystem construction, although Zk has technical advantages, it is undeniable that the Op-based ecosystem is still making efforts and there is no exclusion that the Op-based ecosystem may further innovate technically.