Taiko Lianchuang: Ethereum expansion plan should be more decentralized

Original author: Climber, Golden Finance

On July 23, Taiko announced its future development roadmap, which mentioned that the Ontake upgrade plan will be launched on the mainnet in Q4 this year, and new transaction types and other functions will be introduced. This also makes the community have more expectations for Taiko.

Since the launch of Taikos mainnet at the end of May this year, it has attracted much attention and has achieved many impressive performance data, such as reducing L1 Gas costs by more than 30%, TVL reaching nearly US$200 million, and the coin price rising against the market trend to break through US$3.

Founded in early 2022, Taiko (drum in Japanese) is an Ethereum layer-2 protocol designed to be the most Ethereum-equivalent and universal ZK-Rollup (Type-1 ZK-EVM). The protocol aims to make Ethereum transactions cheaper while retaining its core features to help developers build dApps better.

In order to better understand the mechanism and value of the Taiko project, Golden Finance interviewed Taikos co-founder and CEO Mr. Daniel Wang, and talked with him through several questions about Taikos project mechanism characteristics, future plans and views on the entire L2 track.

Golden Finance: First of all, congratulations on the Taiko public chain mainnet being online for nearly two months. Please briefly introduce Taiko.

Daniel Wang: Thank you very much for your attention to the Taiko mainnet launch. Let me briefly introduce Taiko.

Taiko is a Type-1 zkEVM, which means we provide exactly the same opcodes and functions as Ethereum, ensuring seamless compatibility with the existing Ethereum ecosystem. This allows developers to easily migrate their applications from Ethereum to Taiko without any modifications.

Taiko is unique in that we implemented based rollup technology. This innovation allows Ethereum validators to be ultimately responsible for Taikos block generation, thereby achieving decentralization of proposers. Our goal is to scale Ethereum without sacrificing decentralization, creating an ecosystem where centralized and decentralized second-layer networks coexist. This provides dApp developers and users with more options to choose between different types of networks based on their needs.

Taiko completed a $15 million Series A round led by Lightspeed Faction, Hashed, Generative Ventures and Token Bay Capital in March this year, bringing our total funding to $37 million. These investments not only provide us with financial support, but more importantly, they bring us strategic partnerships. We attach great importance to the synergy with investment institutions, and their industry insights and network resources are crucial to Taikos development.

It is truly inspiring that Taiko has become one of the largest Discord communities in the world (over 1.07 million members) and attracted hundreds of dApps to be deployed in a short period of time. This achievement is the result of a combination of factors: our technological advantages (Type-1 zkEVM), commitment to decentralization, community building strategy, and investor support and trust.

We believe that Taiko’s success depends not only on technological innovation, but also on how we empower the entire ecosystem. We are committed to providing developers with the best tools and environment, while also constantly exploring how to better serve end users so that the advantages of blockchain technology can truly benefit the public.

Golden Finance: What factors prompted your team to decide to create and develop this decentralized Ethereum zk L2 public chain? What is its past development history? In this process, what do you think are the biggest difficulties in the development of the project? How did you solve them?

Daniel Wang: The core motivation for our decision to create Taiko stems from our deep understanding and persistence of the essence of blockchain technology. In 2017, I founded the Loopring project, which later became the first zkRollup in the blockchain world. Although due to the technical limitations at the time, Loopring could only be made into an unprogrammable second-layer network and the block generation mechanism was centralized, this experience provided us with valuable experience and even some insights into Ethereum expansion.

The successful launch of Loopring has provided an important reference for Ethereums roadmap centered on Rollup. This experience has made us deeply realize that the core charm of blockchain lies in permissionless and decentralization. Therefore, when building Taiko, we took these two features as the primary design principles.

We firmly believe that an L2 can add new features on the basis of guaranteeing permissionlessness and decentralization, but the reverse is difficult to achieve. This is why Taiko adopted a permissionless and decentralized model as soon as the mainnet was launched. We believe that many applications, especially the popularity of decentralized social networks, require a more permissionless and decentralized network layer as a foundation. Just like a high-rise building cannot be built on a sand dune, it can also be said that the skin cannot exist without the hair. The skin here is the second-layer network that needs permissionlessness and decentralization, and the hair is the decentralized application.

The main difficulty in building Type-1 zkEVM lies in combining Type-1 and zkEVM, as well as the scarcity of relevant talents. We not only need to design the overall rollup, but also need to write zk circuits and develop zk proof programs, and even distributed zk proof systems.

We did take some detours in choosing the zk solution. Fortunately, we soon realized that the proof system must be decoupled from the system design to ensure that the proof system is pluggable. Therefore, about a year ago, we made a key decision: to abandon the independent development of zkEVM and choose to wait and adopt a third-party general zk proof solution, namely the zkVM solution.

This decision may disappoint some community members in the short term, thinking that we have given up on zk research and development.

But in the long run, this is a very wise choice. It allows us to focus more on optimizing the overall system design and user experience, while also enabling us to more quickly adapt and integrate more advanced zk proof technologies that may appear in the future.

Another important challenge we are facing is how to provide a better user experience and reduce the frequency of block generation through transaction preconfirmation. Transaction preconfirmation allows users to experience sub-second transaction confirmation, which is especially important for applications such as games and payments. At the same time, reducing the frequency of block generation can further reduce our operating costs as a Based Rollup.

Golden Finance: Please introduce the current main products and business progress of the project. What are the outstanding data performances of the project so far? For example, TVL, on-chain projects, interaction data, etc.

Daniel Wang: Nearly two months after the launch of the mainnet, Taiko has achieved amazing performance in many aspects. We at Taiko Labs have compiled relevant data, as follows:

In the first month of its independent online launch, Taikos total locked value (TVL) reached US$138.7 million, with an average daily transaction rate of 19.53 transactions per second, a maximum of 45.3 transactions per second, a total transaction volume of more than 21.57 million, and the number of independent wallets approaching 700,000.

In addition, in terms of games and DeFi applications, Taiko has integrated more than 80 projects such as LayerZero, Stargate, Oku Trade, etc. The Trailblazers loyalty program launched by Taiko has attracted nearly 600,000 participants and minted more than 220,000 badges.

Golden Finance: What is the main difference between Taiko’s expansion plan and other Rollup projects?

Daniel Wang: There are mainly the following differences:

1. Based Rollup Mechanism

One of Taikos core features is the adoption of the Based Rollup mechanism. This means that we do not rely on a centralized sorter, but instead use Ethereum validators to sort transactions and blocks. This design significantly improves the decentralization of the network, making Taiko the only rollup that currently implements decentralized proposing and proving.

2. Based Contestable Rollup (BCR) Concept

At the end of 2023, we proposed the concept of Based Contestable Rollup (BCR), which is an important innovation of Taiko. BCR introduced a contestable mechanism based on the following considerations:

ZK-EVM code may have unknown errors, and Taiko, as a decentralized network, has a low fault tolerance.

A mechanism is needed to resolve potential software bugs without having to stop operations for repairs like a centralized network.

While ensuring network security, it is necessary to balance verification costs and the degree of decentralization.

In BCR, anyone can dispute a block state transition, but they need to pay Taiko tokens as a deposit. Disputes are resolved through higher-level proofs, which not only ensures the security of the network, but also provides an economic incentive mechanism.

3. Multi-level proof system

Taikos BCR architecture allows each level to use its own proof system. This flexibility enables us to combine different types of proofs as needed, such as Optimistic proofs, SGX proofs, zkEVM or zkVM proofs, etc. This design not only improves the credibility of the system, but also reserves space for future technological developments as well as Layer 3 and application-specific blockchains (appchain).

4. Flexibility and scalability

Contestable Rollup can be seen as an abstraction of zkRollup and Optimistic Rollup. This design gives Taiko great flexibility and scalability. We can configure the system as pure zkRollup or Optimistic Rollup, or a hybrid of the two, based on future technological developments and application requirements.

Golden Finance: Currently, the competition in Ethereum L2 is fierce. As a new player, how do you view the current development status of L2? Compared with other competitors, what are Taikos biggest advantages and characteristics?

Daniel Wang: Before Taiko went online on the mainnet, most L2 solutions were highly centralized. Whether it is zkRollup represented by zkSync and StarkNet, or Optimistic Rollup represented by Optimism and Arbitrum, they are relatively centralized solutions. These projects are usually operated by companies and rely on operations to obtain data and users.

We believe that if you really believe that Rollup is the core of Ethereums expansion, then you should not stop at these centralized second-layer networks. Ethereums expansion plan should be more decentralized, which is also the goal that Taiko is committed to achieving.

Although there are many second-layer applications, the actual technical solutions are still limited. We believe there is still a lot of room for innovation in this field, especially in terms of improving decentralization and security.

Compared with other competitors, Taikos greatest advantages and features include the following points.

First of all, Taiko uses Based Rollup technology, which is a more thorough decentralized solution. We hope to provide a truly decentralized expansion solution for Ethereum in this way.

Secondly, our goal is to achieve ownerless as soon as possible. This means that Taiko Labs, as the development entity, will gradually give up all special permissions. We hope that even if Taiko Labs or its members are no longer trusted, the Taiko network itself will still be trustworthy. Once we give up all permissions, Taiko as a mature network cannot be killed, so that the applications on it can also be indestructible. I believe that once we achieve this milestone, Taikos advantages will be very obvious.

At the same time, we also hope to influence the decentralization process of other second-layer networks through our own accelerated decentralization and ownerless efforts. Ethereum has not gone too far on the rollup-centric roadmap, and I don’t think the currently popular rollup is necessarily the ultimate solution in the future. There are still many problems to be solved, and Taiko is working hard to be part of this solution.

Golden Finance: Bitcoin L2 is developing rapidly. Do you think this trend will have an impact on Ethereum L2 ? The attention of the crypto market has shifted. Will it affect Taikos progress and development strategy?

Daniel Wang: I think Bitcoins second-layer network projects have no substantive significance in the long run, and should even be stopped. The short-term impact of these projects on Ethereum is mainly reflected in attracting a part of the people who might have participated in the construction of the Ethereum ecosystem, causing a certain degree of distraction. However, from a long-term perspective, these projects will not pose a real challenge to Ethereums second-layer network.

The Bitcoin network was originally designed primarily as a digital currency, not a smart contract platform. Although some people have tried to build complex application layers on Bitcoin, these efforts often encounter many technical limitations and challenges. In contrast, Ethereum was designed from the beginning as a general-purpose smart contract platform with greater programmability and flexibility.

For Taiko, the short-term shift in the crypto markets attention will not affect our development progress and strategy. We firmly believe in the long-term value and potential of the Ethereum ecosystem. As a project dedicated to providing decentralized and efficient Ethereum Layer 2 solutions, Taikos goals and roadmap will not change due to changes in short-term market sentiment.

Vitalik proposed the first block on the Taiko mainnet and expressed his appreciation for Taiko. After the launch of the tiako mainnet, he repeatedly mentioned and recognized Taikos technical implementation. During the ethcc, Vitalik once again recognized Taikos unique positioning in his speech PPT. Previously, Taiko has also won the favor of many institutions including Sequoia, OKX, IOSG, etc., and has raised a total of 37 million US dollars in three rounds. The reason why Taiko has become one of the largest Discord communities in the world (over 1.07 million members) in a short period of time and attracted hundreds of dApps to deploy, in addition to the advantages of Type-1 type and completely decentralized architecture, the support of investors is indispensable.

Golden Finance: What is the main reason why Taiko is recognized by industry celebrities and capital?

Daniel Wang: As the founder of Taiko, I am very grateful to Vitalik, the Ethereum Foundation and our investors for their recognition and support of Taiko. I think they value our commitment and execution to expand Ethereum in the most native and decentralized way. Taikos recognition by industry celebrities and capital is mainly due to our technological innovation and persistence in decentralization.

We use Type-1 and Based Rollup technology, which is a more thorough decentralization solution. Our continuous technological breakthroughs, coupled with our pursuit of achieving an ownerless state, are highly consistent with Ethereums core values, and therefore have attracted the attention of industry professionals.

Our community building is also an important factor. Taiko has a Discord community of over 1.07 million members, which is not only the largest cryptocurrency Discord community, but also one of the top Discord servers in the world. We keep the community active and cohesive through regular content series, community dialogues, tea parties, weekly tests and games. We also incentivize the participation of community members through special role rewards. This open attitude and community building strategy has attracted a large number of developers and users to participate in Taikos ecosystem.

We have also been recognized for our support of developers. We provide a space for developers to collaborate and discuss through platforms such as GitHub and Discord, and at the same time increase Taikos visibility through conferences, hackathons, and sponsorships to attract more developers to join.

I believe that our efforts to build an open and positive community are one of the important reasons for attracting investors recognition. We not only focus on technological innovation, but also attach importance to community building and the development of the ecosystem. This comprehensive development strategy has won the favor of investors.

In general, the core of Taikos recognition lies in our comprehensive performance in many aspects such as technological innovation, decentralized concept, community building and open attitude.

Golden Finance: In February this year, Coindesk published an article quoting Taiko CEO saying that the Year of the Dragon has opened a new door for Ethereum, especially the expected impact of ETFs. Now that the ETF has been approved, what do you think about the prospects of Ethereum and L2? When do you think the big explosion of L2 will come?

Daniel Wang: I am very optimistic about the prospects of Ethereum ETF after its approval. The approval of ETF opens new doors for Ethereum and its L2 ecosystem, which will bring in wider participation from institutional and individual investors.

As more funds and talent flow into the Ethereum ecosystem, we will see further acceleration of innovation and development in the L2 space. The passage of the ETF not only increases confidence in Ethereum, but also brings more legitimacy and recognition to the entire cryptocurrency industry. This recognition will attract more outstanding engineers and researchers to the second-layer expansion field, which may give rise to new and revolutionary rollup designs.

Regarding the explosion of L2, I think this process has already begun, but the real peak may take some time. As more institutional investors participate in Ethereum through ETFs, they will gradually realize the importance and potential of L2 solutions. I expect that in the next 12 to 24 months, we may see a significant increase in the use and adoption of L2.

This development is both an opportunity and a challenge for existing L2 projects, including Taiko. We need to continue to innovate and improve our technology to remain competitive. But from a more macro perspective, this competition and innovation will greatly promote the development of the Ethereum ecosystem and bring users a more efficient and economical blockchain experience. As industry participants, we welcome this healthy competition because it will ultimately benefit the entire Ethereum ecosystem.

Golden Finance: What plans and prospects does the team have for Taiko’s future development?

Daniel Wang: Our primary goal is to support transaction pre-confirmation as soon as possible, which is crucial to the user experience of based rollup. This requires not only the improvement of Taiko technology, but also the improvement of ecological infrastructure such as restaking. At the same time, we are working to further optimize the protocol and reduce fees. We hope that the Taiko BRC protocol will be easier to upgrade and reduce gas consumption on Ethereum to achieve profitability for proposers.

In terms of governance, we plan to give up the owners rights as soon as possible and introduce a community voting mechanism to allow token holders to participate in the management of Taiko through DAO. In addition, we will continue to improve the ecological construction and attract more developers and users. Finally, while ensuring the stability of the Taiko BCR mainnet, we are also exploring more radical rollup solutions through the Taiko BBR project.

These goals reflect our comprehensive consideration of technological innovation, user experience, decentralization, and ecological development, which we believe will drive Taiko to maintain its leading position in the highly competitive L2 market.