The growing popularity of Ethereum and the surge in transaction volumes have highlighted the need for effective scaling solutions. Taiko, a groundbreaking project in the crypto space, promises to address these challenges while maintaining Ethereum's core principles of decentralization and security.
What is Taiko?
Taiko is a decentralized Layer 2 blockchain protocol that utilizes a Zero Knowledge Ethereum Virtual Machine (ZK-EVM). The project aims to be a fully Ethereum-equivalent ZK-Rollup, providing a scalable and efficient platform for decentralized applications (dApps) developers and users. The primary goal of Taiko is to allow dApp developers and users to leverage the power of Ethereum Layer 1 (L1) without making any changes to their existing dApps.
Taiko addresses the scalability issues of Ethereum, which, despite its decentralized and secure nature, suffers from high transaction fees and low throughput. The increased demand on the Ethereum network, particularly during the surge of memecoins for example, has led to network congestion and exorbitant gas fees. Taiko aims to solve these challenges by providing an Ethereum-equivalent scaling solution that maintains the technical and fundamental principles of Ethereum.
The concept of ZK-rollups, which execute, aggregate, and prove transactions off-chain while relying on Ethereum for data availability and validity proof verification, is at the heart of Taiko's approach. Unlike other ZK-rollups that are application-specific and break compatibility with existing Ethereum L1 smart contracts and dApps, Taiko is designed to support generalized computation of the EVM exactly, ensuring seamless compatibility.
Taiko's Type 1 ZK-EVM is engineered to achieve complete compatibility with Ethereum by incorporating all EVM opcodes. This compatibility allows developers to deploy their existing Ethereum dApps on Taiko without modifications, saving time and effort. Taiko's focus on Ethereum-equivalence over the speed of ZK-proof generation ensures that developers can reuse execution clients with minimal adjustments.
How Taiko Works
Taiko utilizes Zero Knowledge Rollup (ZK-Rollup) technology to enhance the scalability and efficiency of the Ethereum network. Here’s a detailed breakdown of how Taiko works:
ZK-Rollup Technology
- Off-Chain Transaction Processing: ZK-rollups execute transactions off-chain and then batch them together into a single proof, which is submitted on-chain. This method reduces the amount of data processed on-chain, leading to lower gas fees and higher transaction throughput.
- Cryptographic Proofs: Taiko uses cryptographic proofs to validate transactions off-chain. These proofs are called Zero Knowledge Proofs (ZKPs), which provide a way to verify the correctness of computations without revealing any additional information. This ensures both security and privacy.
Ethereum-Equivalent ZK-EVM
- Type 1 ZK-EVM: Taiko's ZK-EVM supports all EVM opcodes and maintains complete compatibility with Ethereum. This means that developers can deploy existing Ethereum dApps on Taiko without any changes.
- Seamless Integration: The ZK-EVM circuits are responsible for generating proofs, the Layer 2 rollup node manages the rollup chain, and the protocol on Layer 1 connects these components to ensure seamless operation and compatibility with Ethereum L1.
Taiko's Features
Ethereum-Equivalent ZK-EVM
Taiko is building a Type 1 ZK-EVM to achieve complete compatibility with Ethereum, supporting all EVM opcodes without altering the Ethereum framework. This enables developers to deploy existing dApps on Taiko without modifications.
High Speed and Scalability
Utilizing ZK-rollup technology, Taiko enhances transaction speed and scalability by maintaining the state of all L2 transfers with minimal data, simplifying block validation and data transfer to L1.
Security and Decentralization
Taiko plans to launch with a fully decentralized proposer and prover set, allowing anyone to perform these roles without restrictions. The governance will eventually transition to the Taiko DAO, ensuring a community-driven approach.
Open Source
Taiko's code is fully open-sourced on GitHub, primarily using the permissive MIT license, which promotes compatibility and collaboration.
Advantages of Taiko
Ethereum Compatibility
One of the primary advantages of Taiko is its seamless integration with Ethereum. Taiko's Type 1 ZK-EVM ensures full compatibility with Ethereum by supporting all EVM opcodes. This level of compatibility allows developers to deploy their existing Ethereum dApps on Taiko without any modifications, preserving the functionality and user experience of the original applications.
This compatibility is crucial as it saves developers significant time and effort, allowing them to leverage their existing work without extensive rewrites. The ease of integration makes Taiko an attractive option for developers who are already familiar with the Ethereum ecosystem, thereby promoting wider adoption.
Enhanced Scalability
Taiko addresses one of Ethereum's most pressing issues: scalability. By leveraging ZK-Rollup technology, Taiko processes transactions off-chain and then batches them together into a single proof that is submitted on-chain. This method significantly increases transaction throughput, allowing more transactions to be processed in a shorter period compared to the traditional Ethereum network. As a result, users experience reduced delays and faster transaction times.
Additionally, the batching process and reduced on-chain data lead to lower gas fees for users, making transactions on the network more cost-effective. This enhanced scalability makes Taiko a compelling solution for developers and users seeking a more efficient blockchain experience.
Robust Security
Security is a cornerstone of Taiko's design. The project employs Zero Knowledge Proofs (ZKPs) to validate transactions off-chain. These cryptographic proofs ensure the correctness of transactions without revealing any additional information, thereby maintaining the privacy and security of user data.
Taiko also plans to launch with a fully decentralized proposer and prover set, which allows anyone to perform these roles. This decentralization enhances the network's security by eliminating single points of failure and reducing the risk of censorship. The decentralized nature of Taiko's architecture ensures a robust security framework that protects user transactions and data.
Community-Driven Governance
Taiko is committed to a community-driven governance model. The governance of Taiko will gradually transition to the Taiko DAO, ensuring that decision-making processes are transparent and inclusive.
This approach allows stakeholders to have a meaningful say in the future direction of the project, fostering a sense of ownership and responsibility within the community. Taiko aims to start from a completely decentralized structure and, if necessary, move towards a more centralized one. This leaderless approach ensures that the network remains true to its decentralized ethos, promoting long-term sustainability and resilience.
Taiko’s Teams and Investors
The Taiko project was founded by Daniel Wang, who also serves as the CEO of Taiko. Previously, Wang was also the founder and CEO of another layer-2 project named Loopring. His other experiences include working as a Tech Lead and Software Engineer at Google from 2006 to 2010.
Taiko successfully raised US$37 million from two funding rounds, namely an undisclosed funding on June 8, 2023, totaling US$22 million, and a Series A funding on March 2, 2024, totaling US$15 million. Investors involved in funding the Taiko project include: Hashed, Lightspeed Ventures, OKX Ventures, Generative Ventures, Wintermute, Token Bay Capital, IOSG Ventures, KuCoin Ventures, HongShan, Amber Group, and Mirana Ventures.
TAIKO Tokenomics
The TAIKO token serves as the native currency within the Taiko platform, facilitating a range of transactions across its ecosystem. Its primary functions encompass transaction payments, enabling users to utilize TAIKO tokens for covering transaction fees incurred while accessing services on the Taiko platform.
Additionally, TAIKO token holders are granted the opportunity to engage in voting processes, thereby influencing decision-making concerning project development initiatives. Moreover, Taiko implements reward mechanisms for TAIKO token holders, offering incentives through avenues such as staking, yield farming, and airdrop programs.
The TAIKO token has maximum supply of 10 billion tokens, with distribution’s details as follows:
Conclusion
Taiko represents a significant advancement in the quest to scale Ethereum while preserving its core values of decentralization and security. By offering a fully Ethereum-equivalent ZK-Rollup solution, Taiko provides developers with a seamless platform to deploy their dApps without modification, ensuring high speed, scalability, and robust security.
With its commitment to open-source development and community-driven governance, Taiko is well-positioned to play a pivotal role in the future growth of the blockchain ecosystem.
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