On May 23rd, Taiko released its first round of airdrop query page, sparking a debate in the community about fairness. Despite the response from Taiko’s founder, Daniel Wang, the community seems skeptical.
Meanwhile, on May 25th, Vitalik Buterin, co-founder of Ethereum, proposed the first block on the Taiko mainnet as a block proposer, stating in the note attached to the block, “I am glad to see Taiko launching as a Based Rollup platform. Ethereum benefits from the adoption of various L2s using different methods, and I appreciate Taiko being one of the first projects to move in this direction.”
With the upgrade of Cancun, Ethereum’s focus has once again shifted to the L2 field. Unlike other Rollup projects, Taiko is developing a solution based on Based Rollup and has attracted the attention of several VCs, including Sequoia China, Generative Ventures, Hashed, Lightspeed Faction, Token Bay Capital, and Flow Traders. It raises the question: what sets Taiko apart from other well-known ZK scaling projects, and how will its scaling solution impact the L2 ecosystem?
With these questions in mind, ChainFeeds conducted an interview with the Taiko team to explore the origin of Taiko, its vision, and Ethereum’s scaling solution.
Key takeaways:
Taiko founder Daniel Wang aims to expand Ethereum without sacrificing decentralization, achieving a balance between centralized and decentralized Layer 2 networks, allowing dApps to make decisions between the two options.
Contestable Rollup is an abstraction of zkRollup and Optimistic Rollup. In the future, if zero-knowledge proofs become cheap enough, Contestable can be configured as a pure zkRollup.
During the development of SGX proofs, the Taiko team gradually realized the importance of stateless clients and believed in the feasibility of running stateless clients to generate zero-knowledge proofs in zkVM.
Taiko has already launched its mainnet, where block submission and proof are permissionless, but the contracts still have owners. The Taiko team plans to transfer ownership of the contracts to Taiko DAO within about a year, completely giving up ownership and control of the network.
Origin of Taiko: Expanding Ethereum without sacrificing decentralization
Taiko founder Daniel Wang created the first Ethereum ecosystem DEX protocol, Loopring, based on ZKRollup in 2017. However, Loopring’s architecture did not align completely with Daniel’s vision. Daniel wanted to expand Ethereum without sacrificing decentralization, achieving a balance between centralized and decentralized Layer 2 networks, allowing decentralized applications to make wiser decisions between the two options. However, Loopring could only be built as a non-programmable Layer 2 network, lacking a virtual machine structure, and its block generation mechanism was centralized to reduce costs.
Before founding Taiko, Daniel Wang and like-minded developers had multiple discussions focusing on two directions: decentralized social networks or the infrastructure needed for decentralized social networks, “permissionless Layer 2 networks.” After careful consideration, everyone generally believed that entering the field of decentralized social networks carried higher risks, while permissionless Layer 2 networks had greater differentiation and competitive space, leading to the birth of Taiko.
Taiko is a Type-1 zkEVM that provides the same opcode and functionality as Ethereum, ensuring high compatibility with the existing Ethereum ecosystem. The Taiko team emphasizes that Taiko was designed as a Based Rollup from the beginning, where Ethereum validators are ultimately responsible for block production, achieving decentralized proposers. So far, Taiko has over 30,000 decentralized proposers and 14,000 decentralized validators. In March of this year, Taiko completed a $15 million Series A financing led by Lightspeed Faction, Hashed, Generative Ventures, and Token Bay Capital, with a total funding of $37 million. The Taiko team values the synergy between investment institutions and Taiko’s strategy. The team also attributes their success in becoming one of the largest Discord communities (with over 1.07 million members) and attracting hundreds of dApps for deployment to the advantages of being a Type-1 platform and having a fully decentralized architecture, as well as the support of investors.
Exploring the Ethereum Rollup Design Framework: BCR and BBR
One of the main differences between Taiko and other Rollups is that Taiko has chosen the Based Rollup mechanism, relying on Ethereum validators to order transactions and blocks instead of relying on a centralized sequencer. Furthermore, Taiko co-founder Daniel Wang introduced the concept of “Based Contestable Rollup (BCR)” at the end of 2023. This concept introduces the Contestable mechanism because ZK-EVM code cannot be error-free forever, and Taiko is decentralized with low fault tolerance, so a cautious approach is needed.
The Taiko team also explained the main considerations for choosing the Contestable design:
Firstly, Based Rollup is permissionless and requires “higher-level proofs” to address potential bugs in the software. This avoids the need for centralized networks to shut down for data correction. Of course, as the Taiko network runs for a longer time, this error correction mechanism can gradually be removed.
Secondly, although SGX proofs are thousands of times cheaper than 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 revalidate the blocks. This reduces costs while increasing the trustworthiness of verification.
Lastly, Contestable Rollup has flexibility and scalability and can be seen 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 it can be configured as a pure Optimistic Rollup based on the needs of the application, adapting to different verification requirements.
Regarding the architecture of Based Contestable Rollup, Daniel Wang provided a detailed overview in his article. BCR is a Rollup with contestable features and Based ordering. In this design, anyone can dispute state transitions in a block but must pay a dispute bond in Taiko tokens and provide higher-level proofs to validate the block. If the challenger wins, they can reclaim the dispute bond and receive 1/4 of the original prover’s validity bond. The new prover will also receive 1/4 of the original prover’s validity bond as a proof fee, and the remaining 1/2 will be confiscated. The same applies in reverse. It is worth noting that in this mechanism, multiple signers act as high-level proofers in the initial years. As the highest level of proof, in this case, state transitions are considered final and further questioning is not allowed.
Additionally, Taiko’s BCR architecture has a core feature that allows each level to use its own proof system. The Taiko team states that in a Contestable Rollup-based architecture, different levels of proofs can be constructed, such as low-cost optimistic proofs, followed by SGX proofs, and then zkEVM or zkVM proofs. These different proof types embody the Contestable concept and can be combined into a mixed multi-proof system, such as “SGX+zkVM,” which can be seen as a more trustworthy proof than using zkVM alone.
As a significant milestone, Taiko plans to test the practical operation of BCR on the Alpha-6 testnet, Katla, and then launch it on the mainnet. After that, Taiko plans to either upgrade the protocol to Boosted Based Rollup (BBR) or launch an independent BBR Layer 2 as the second major milestone. Taiko states that Boosted Based Rollup is a wise choice to achieve Ethereum’s native scalability. By allowing L1 validators to propose new blocks for the entire network, Ethereum will have out-of-the-box scalability. For developers, BBR can shard transaction execution and storage. For users, the user experience will be improved as dApps are distributed across all L2s.
Narrative Upgrade: Transitioning to ZKVM?
While zkEVM is well-known, the EVM was not designed to run in zero-knowledge circuits, so implementing zkEVM often requires trade-offs. In contrast to zkEVM, zkVM is a virtual machine implemented as a zero-knowledge proof system circuit. Its advantages include being easy to use, as it does not require knowledge of cryptography and ZKP systems; being general-purpose, with a Turing-complete ZK-VM that can serve as proof computation for any computation; being simple, with a set of simple constraints sufficient to describe the entire VM; and being able to take advantage of recursion, where proof verification is just another program executed on the VM.
Taiko has begun transitioning from using the zkEVM model to using the zkVM model. With the transition to the zkVM model, Taiko can modify and run a client to generate ZK proofs. To ensure robustness, Taiko diversifies encryption assumptions by building a multi-proof system and contributing to multiple zkVMs (such as RISC Zero, SP1, Powdr) and uses SGX to enhance privacy and security without leaking data.
The Taiko team states that they were one of the earliest teams involved in the Ethereum Foundation’s PSE zkEVM development and made contributions and optimizations to critical circuit codes such as Keccak and Moorlock. However, they also realized the limitations of this development approach during the process, such as the low-level nature of the code, making testing and verification difficult, and not being beginner-friendly. Through continuous exploration during the development of SGX proofs, the team gradually realized the importance of stateless clients and, influenced by the progress made by the Risc0 team, firmly believed in the feasibility of running stateless clients to generate zero-knowledge proofs in zkVM. Taiko has already started collaborating with Risc0, and will continue to collaborate with SP1 and more zkVM teams to aggregate these different proof systems through Contestable Rollup, while keeping Taiko’s Layer 2 design sufficiently decoupled from each zkVM.
Furthermore, Taiko has launched on the Ethereum mainnet on the 27th and has already processed about 15% of the data blocks on the entire Ethereum network. The team emphasizes that although block submission and proof are permissionless in Stage 1 of the mainnet mode, the contracts still have owners. The team plans to transfer ownership of the contracts to Taiko DAO within about a year, completely relinquishing ownership and control of the network. The Taiko team also states that they will allocate more resources to the development of Preconfirmation, MEV, and the Taiko BBR solution, hoping to bring more surprises to ecosystem projects and community users in the future.
Airdrop Controversy: Can Taiko regain community trust?
On May 23rd, Taiko announced the TKO token economics and revealed that 5% of the initial token supply would be used for a genesis airdrop. According to the official FAQ, there will be 300,000 addresses eligible to claim over 50 million tokens. Although this measure was intended to give back to the community, it sparked controversy about the fairness of the airdrop. Some community members reported receiving fewer tokens than expected, and others claimed they participated in related tasks but did not receive the airdrop.
In response to the dissatisfaction of community members, Taiko co-founder Daniel Wang also responded, stating that Taiko’s goal is fairness but cannot satisfy everyone, and apologized to users who did not receive TKO tokens. However, it seems that the community is not convinced by his statements. Daniel Wang made another response in the Discord community, stating that if someone did not receive the airdrop, it’s because others scored more. As for the lack of transparency in the airdrop rules, it is because transparency cannot resolve differences, and the definition of “fairness” is highly subjective. These remarks once again put Taiko at the center of public opinion, with some community members calling for a boycott of Taiko. However, it is not uncommon for projects that have released airdrops to face community questioning, especially when airdrop manipulation has become an industry involving a large number of professional teams. These teams have become part of the ecosystem, and community opinions can be influenced by these teams. In the future, Taiko also plans to conduct two more rounds of airdrops.