Ethereum is the product of significant progress in promoting human collaboration and individual autonomy mechanisms. As a globally recognized settlement network, Ethereum fundamentally changes the concepts of digital ownership and data immutability. Its permissionless nature enables individuals around the world to conduct seamless transfers across time zones and regions freely and without restraint.
The system's main strength is its commitment to decentralization and security, prioritizing these factors over speed and scalability. However, when a public blockchain lacks scalability, high transaction fees and limited throughput hinder the ability of developers, users, and various applications to fully utilize the network. This scalability limitation ultimately limits the potential of Ethereum as a whole.
In order to reach its full potential, Ethereum must overcome its scalability limitations and become a network capable of supporting a large ecosystem of dApps. To achieve this goal, Ethereum is actively researching Rollups as a highly optimized scaling solution, with a particular focus on Ethereum’s equivalent of ZK-rollups as the most viable option for developers.
If you have been paying any attention to the latest developments in the Ethereum zero-knowledge space, you may be familiar with some well-known projects such as Polygon, Starkware, Scroll, and zkSync. However, there is an emerging, relatively low-key but equally promising competitor that is rapidly emerging. Taiko is such a zero-knowledge extended virtual machine (zkEVM) project that aims to become a fully decentralized Ethereum equivalent ZK-rollup and strives to establish its position in the field.
Let’s explore the essence of Taiko and gain a deeper understanding of its unique characteristics.
Introduction to Taiko
Founded in early 2022, Taiko, named after the Japanese word for “drum,” was founded by Daniel Wang (CEO) and Brecht Devos (CTO), both seasoned veterans in the field. Daniel and Brecht previously worked together at Loopring, an application-specific ZK-rollup first deployed on Ethereum in 2018. After leaving Loopring in 2021, Daniel initially planned to build a decentralized social network, but quickly realized that the existing infrastructure could not support such an application. Daniel and Brecht brought their experience from Loopring to Taiko, along with a team of over 20 exceptional blockchain developers, ZK researchers, and crypto-native operators in over 16 countries, with the goal of building a truly decentralized Ethereum equivalent ZK-rollup together.
Taiko differs from its competitors in that it is a general-purpose ZK-rollup project that aims to build a Type-1 zkEVM to provide a seamless experience for developers.
But what is Type-1 ZK-rollup and why is it important?
Type-1 zkEVM
In Vitalik Buterin's classification of ZK-rollup, Type-1 ZK-rollup prioritizes compatibility with EVM over fast proof generation. This means that Type-1 ZK-rollup does not make any changes to the existing Ethereum system, and uses the same hash function, state tree, transaction tree, precompilation, and consensus logic used by Ethereum. Due to this feature, Type-1 ZK-rollup can be considered equivalent to EVM, so it is called zkEVM.
The advantage of Type-1 zkEVM is that it can fully leverage Ethereum's established development tools and infrastructure, including clients. While Type-2/2.5 zkEVM is also considered compatible with EVM, they will change some parts of the Ethereum stack, which may have adverse effects on gas fees or Keccak hash functions, etc. Depending on the type of project, these changes may have a negative impact on security mechanisms or the efficiency of smart contracts. Therefore, for projects that are sensitive to changes in gas fees or require the proven security of Keccak hash functions, Type-1 zkEVM may be more suitable.
However, the EVM itself is not specifically designed to perform ZK-friendly operations, which results in a large number of computations required to generate zero-knowledge proofs (ZKPs). Currently, generating a single ZKP for an Ethereum block can take hours, but there is potential for improvement through parallel operation of proof generators (the entity responsible for creating ZKPs) and the long-term development of hardware acceleration solutions like ASICs.
Technical Overview
Taiko aims to be a Type-1 zkEVM specifically designed to seamlessly execute Ethereum smart contract code without any modification. This will enable developers to easily transition existing applications to Layer 2 without having to implement new code.
Taiko consists of three main components:
zkEVM: zkEVM verifies the correctness of EVM calculations through validity proofs. Taiko can run EVM directly without any modifications. It is very beneficial for developers to leverage battle-tested code from the Ethereum network and keep it in its original state with existing development tools. Developers can easily migrate existing Solidity contracts to Taiko without compiling them into different languages or adjusting the framework. In addition, Taiko-client is built on Geth, ensuring compatibility with future Ethereum protocol upgrades.
Layer 2 rollup nodes: Taiko nodes are responsible for collecting and executing user transactions on the L2 chain. These nodes oversee the management and state progress of the rollup chain.
Taiko Protocol: The Taiko Protocol defines and enforces rollup rules and identifies potential participants. Smart contracts deployed on Ethereum Layer 1 act as a data availability mechanism and verify ZKP.
These components work together to ensure smooth compatibility with Ethereum Layer 1 and provide a familiar experience for developers and users.
Decentralization
In addition to prioritizing EVM compatibility, Taiko also places a strong focus on decentralization. Many rollup networks initially prioritize performance and then gradually introduce decentralization, but Taiko intends to use decentralized proposers (serializers) for block submissions from the beginning and decentralized provers for ZKP generation. This approach highlights Taiko's strong commitment to decentralization, as no other rollup network currently uses a decentralized serializer.
Taiko’s focus on decentralization ensures a solid foundation for dApps while remaining true to Ethereum’s core values. The team also revealed their plans to launch a decentralized autonomous organization (DAO), with more details to be discussed in the future.
Taiko's current situation
On June 7, 2023, Taiko achieved a significant milestone in its pursuit of decentralization and an Ethereum-equivalent zkEVM by launching an alpha-3 testnet called Grímsvöt. This testnet plays a key role in fully testing the network design and components, with the primary goal of decentralizing proposers and attesters while developing supporting Layer 3 technologies. As outlined in Taiko’s development roadmap, the team has scheduled multiple testnets, each focused on testing a specific component of the technology stack in preparation for the mainnet launch in Q1 2024.
In addition, Taiko Labs announced the successful completion of a $22 million fundraising round. Sequoia China led a $10 million seed round in Q3 2022, while Generative Ventures led a recently closed $12 million Series A round. Other investors in both rounds include IOSG Ventures, GSR, and GGV Capital, as well as several angel investors from the Ethereum community. The funds will be used to set up an ecosystem investment fund to attract dApps and developers to join the ecosystem.
Summarize
There is no doubt that Type-1 zkEVM provides the smoothest experience for developers who are familiar with Ethereum, and therefore have the least friction for them to build applications on the Layer 2 network. In the short term, Taiko undoubtedly has the advantage of providing developers with the easiest way to migrate their applications to Rollup. However, this compatibility comes at the cost of efficiency, and as developers become more familiar with ZK-rollups, they may prefer to build applications on higher-performance Type-3 and Type-4 ZK-rollups. However, this may not happen soon, as most developers still prefer to develop on EVM-compatible chains, and in the blockchain industry, speed is of the essence, and many developers are willing to stay in their familiar fields and focus on other aspects of their applications, putting migration to rollups on the back burner for the time being.
Taiko is still working hard to pursue an ambitious goal and stand out as a unique project aimed at achieving outstanding results. As the alpha test network continues, Taiko is making significant progress toward becoming a platform that is both accessible and user-friendly for Ethereum developers and users. It upholds the core values of Ethereum while providing scalability and efficiency, making an important impact on the future of Ethereum. The project is expected to promote wider adoption, foster a thriving ecosystem, and play a key role in shaping Ethereum’s trajectory.
