1. About Project

Taiko is a decentralized Ethereum-equivalent zkRollup project aimed at scaling Ethereum through zkEVM technology.

Taiko is committed to becoming a fully Ethereum-compatible zkRollup, enabling the expansion of Ethereum without altering existing decentralized applications (dApps). As a fully Ethereum-compatible zkRollup, Taiko allows developers and users to leverage the powerful features of Ethereum Layer 1 (L1) without changing existing dApps.

Key features:

1. Fully compatible zkEVM type 1: Taiko adopts type 1 zkEVM that is fully compatible with Ethereum, allowing developers to migrate dApps between Ethereum and Taiko without worrying about smart contract failures.
2. Open-source: All Taiko source code is available on GitHub for viewing, building, or editing, ensuring blockchain development is not limited to a small team but includes a global community of developers.
3. Fully decentralized: In addition to high compatibility with EVM, Taiko attach great importance to protocol decentralization, planning to generate zkPs through decentralized proposers and validators submitting blocks and proofs.

2. Core technology structure

2.1 zkEVM circuit

The zkEVM (zero-knowledge Ethereum Virtual Machine) circuit is one of the core components of Taiko’s technology architecture. It utilizes zero-knowledge proofs (ZKPs) to verify the accuracy and integrity of Ethereum Virtual Machine (EVM) calculations. Through zkEVM, Taiko can scale Ethereum without changing existing smart contracts and decentralized applications (dApps), while maintaining Ethereum’s security, decentralization, and compatibility.

2.1.1 Functions and features

1. Zero-knowledge proofs (ZKPs)

Verify transaction: The zkEVM circuit uses ZKPs to verify the correctness of transactions without revealing transaction-specific data. In this way, the amount of data processing on the Ethereum mainnet can be reduced, thereby reducing transaction costs and increasing transaction speed.

Confidentiality: ZKPs ensure the privacy of transactions, and only verified proofs are submitted to the Ethereum mainnet.

1. Fully compatible with EVM opcodes

Supports all EVM opcodes: The zkEVM circuit fully supports all EVM opcodes, meaning developers can seamlessly migrate their smart contracts and dApps to Taiko without any modifications.

Maintains Ethereum compatibility: This high level of compatibility allows existing Ethereum development tools and ecosystems to be used directly on Taiko, greatly facilitating developers.

1. Decentralization and security

Decentralized verification: The zkEVM circuit supports a decentralized verifier model, where anyone can participate in generating and verifying zero-knowledge proofs. This decentralized approach ensures the security and integrity of the system.

Ethereum L1 validator: Taiko’s zkEVM circuit utilizes Ethereum Layer 1 validators for transaction sequencing, ensuring that Ethereum’s decentralization and security attributes are inherited.

1. Efficient and scalable

Reduces data processing: By executing transactions on Layer 2 and generating zero-knowledge proofs, Taiko reduces the data processing load on the Ethereum mainnet, thereby improving transaction efficiency and scalability.

Fast generation of zk proofs: The zkEVM circuit design optimizes the speed of zk proof generation, ensuring efficient handling of a large volume of transactions.

1. Smart contracts and protocol rules

Smart contract execution: The zkEVM circuit supports the execution of smart contracts, ensuring Ethereum’s programmability and flexibility. These smart contracts are responsible for verifying zk proofs and enforcing protocol rules.

Protocol verification: The zkEVM circuit, through integration with Ethereum L1, ensures that all proofs and transaction states are rigorously verified, maintaining system consistency and security.

2.1.2 How It Works

1. Transaction Execution and Data Collection

The transaction is first executed on Layer 2, generating corresponding transaction data.

This transaction data is collected and prepared for ZK proof generation.

1. Zero-knowledge proof generation

The zkEVM circuit utilizes zkSNARKs or zkSTARKs technology to generate zero-knowledge proofs that can verify the correctness of a transaction without revealing the specific content of the transaction.

After the proof is generated, the proof and related data will be submitted to Ethereum L1.

1. Verification and status updates

Ethereum L1 validators verify the submitted zero-knowledge proof to ensure the validity of the proof.

Once the proof is verified, the transaction status is updated on the Ethereum mainnet, ensuring that all participants see consistent transaction results.

2.2 Layer 2 Rollup Node

Layer 2 Rollup nodes are a key component in Taiko’s technical architecture, responsible for managing and executing transactions on Layer 2 while interacting with Ethereum Layer 1 (L1). Through Layer 2 Rollup technology, Taiko is able to increase Ethereum’s transaction throughput, reduce transaction costs, and maintain decentralization and security.

2.2.1 Functions and features

1. Data collection and trade execution

Trade execution: Layer 2 Rollup nodes execute transactions on Layer 2, and these transactions are first processed in the Layer 2 network, reducing the direct burden on the Ethereum mainnet.

Data collection: The node collects data transmitted from Ethereum Layer 1, and performs transaction processing and status updates based on these data.

1. State management

State Display: After each transaction is executed, the Layer 2 Rollup node will update and display the transaction status to ensure that all participants see consistent status information.

State maintenance: Ensure the consistency and data integrity of the entire network by managing the status after transaction execution.

1. Execution of protocol rules

Protocol verification: Layer 2 Rollup nodes perform transactions and verification processes according to the rules of the Taiko protocol. These rules ensure the validity of transactions and the security of the network.

Smart contract support: Nodes can execute smart contracts deployed on Ethereum Layer 1 and use these contracts for data transmission and zk proof verification.

1. Efficient and scalable

Increase Throughput: Executing transactions on Layer 2 significantly enhances the network’s transaction processing capacity, reducing congestion on the Ethereum mainnet.

Lower Costs: Processing transactions on Layer 2 can substantially reduce transaction fees, making small transactions more economically feasible.

1. Decentralization and security

Decentralized Validation: Layer 2 Rollup nodes support a decentralized validator model, allowing anyone to participate in transaction validation and zk proof generation, ensuring the network’s decentralization and security.

Data Transmission: Nodes are responsible for transmitting transaction data from Layer 2 to Ethereum Layer 1 and updating the state based on L1 feedback.

2.2.2 How it works

1. Data collection and trade execution

Receive Transactions: Nodes receive transactions submitted by users on Layer 2 and execute these transactions according to protocol rules.

State Update: After transaction execution, nodes update the transaction status and maintain the latest state information on Layer 2.

1. Zero-knowledge proof generation

Generate zk Proofs: Nodes generate zero-knowledge proofs for each transaction, ensuring transaction correctness and privacy.

Submit Proofs: The generated zk proofs and related data are submitted to Ethereum Layer 1 for validation by L1 validators.

1. Verification and state update

L1 Verification: Ethereum Layer 1 validators verify the submitted zero-knowledge proofs to ensure transaction validity.

State Synchronization: Once proofs are verified, Layer 2 Rollup nodes synchronize and update the state based on L1 feedback, ensuring consistency across the network.

Advantages and Use Cases:

1. Enhancing Ethereum Scalability: By processing a large number of transactions on Layer 2, Taiko’s Layer 2 Rollup nodes significantly enhance the scalability of the Ethereum network, accommodating higher transaction demands.

2. Reducing Transaction Costs: Executing transactions on Layer 2 and generating zk proofs reduce dependency on the Ethereum mainnet, thereby lowering transaction fees, making it particularly suitable for high-frequency, small-value transactions.

3. Enhancing Security and Privacy: Zero-knowledge proof technology ensures transaction privacy and security, preventing transaction data leaks while maintaining the decentralized nature of the network.

2.3 Taiko Protocol

The Taiko protocol is also a core component of the Taiko technology architecture. It defines and enforces the rules of the Layer 2 Rollup, ensuring transaction correctness and network security. Through smart contracts and decentralized verification, the Taiko protocol achieves efficient scaling of Ethereum while maintaining its decentralized and secure characteristics.

2.3.1 Functions and features

1. Definition of protocol rules

Rule settings: The Taiko protocol defines all operational rules of Rollup, including transaction processing, verification and state updates, etc. All transactions must follow these rules to ensure the consistent operation of the network.

Smart contract execution: The protocol is implemented through smart contracts deployed on Ethereum, ensuring that all rules and operations are open and transparent.

1. Transaction verification and state update

Transaction verification: After each transaction is submitted, the Taiko protocol will be verified according to predefined rules to ensure the validity and correctness of the transaction.

State update: After the verification is completed, the protocol will update the transaction state of Layer 2 and transmit the relevant data to Ethereum Layer 1 to ensure that the state is synchronized and consistent.

1. Decentralization and security

Decentralized validator: The Taiko protocol supports a decentralized verifier model where anyone can participate in the verification process. This decentralized approach enhances the security and integrity of the network.

Zero knowledge proof: The protocol uses zero-knowledge proof technology (zkSNARKs or zkSTARKs) to verify transactions without exposing the specific content of the transaction, ensuring the privacy and security of the transaction.

1. Data transmission and processing

Data submission: The transaction data and the generated zk proof will be submitted to Ethereum Layer 1 for verification by L1 validators.

Data processing: After L1 verification, the protocol will update the state of Layer 2 based on feedback to ensure that all participants see consistent transaction results.

1. Smart contract function

Data transfer mechanism: The smart contract is responsible for transmitting transaction data and zk certificates between Layer 2 and Layer 1 to ensure data integrity and consistency.

Protocol verification: The smart contract is also responsible for verifying the zk certificate to ensure the validity and correctness of the transaction.

1. Governance and community driven

Decentralized Autonomous Organization (DAO): The governance of the Taiko protocol is managed by the Taiko DAO, which is composed of TKO token holders who decide on major updates and changes to the protocol through voting.

Community Involvement: The governance and development of the protocol highly rely on the participation and contribution of the community to ensure that the decision-making of the protocol is transparent, fair and inclusive.

2.3.2 How it works

1. Transaction Submission and Execution

Users submit transactions on Layer 2, and the transactions are first executed on Layer 2 Rollup nodes.

After the transaction is executed, corresponding transaction data and state updates are generated.

1. Zero-knowledge proof generation

Generate zero-knowledge proofs to verify the correctness of transactions. These proofs do not expose the specific content of the transaction, ensuring privacy.

The generated zk proof and transaction data will be submitted to Ethereum Layer 1.

1. L1 verification and state update

Ethereum Layer 1 validators verify the submitted zero-knowledge proof to ensure the validity and correctness of the transaction.

After the verification is passed, the state of Layer 2 will be updated based on the feedback from L1 to ensure the consistency and security of the entire network.

1. Governance and Protocol Updates

Taiko DAO ensures community participation and transparent governance by voting on updates and changes to the protocol.

All protocol updates will be implemented through smart contracts to ensure openness and transparency of the rules.

2.3.3 Advantages and use case

1. Improve the scalability of Ethereum

Through Layer 2 Rollup technology and zero-knowledge proof, the Taiko protocol significantly improves the scalability of the Ethereum network and can handle more transactions and meet higher transaction needs.

1. Reduce transaction costs

Processing transactions on Layer 2 reduces dependency on the Ethereum mainnet, thereby lowering transaction fees. This approach is particularly suitable for high-frequency, small-value transaction scenarios.

1. Enhance security and privacy

Zero-knowledge proof technology ensures the privacy and security of transactions, avoids the leakage of transaction data, and maintains the decentralized nature of the network.

1. Community-driven and transparent governance

Through Taiko DAO, community members can participate in the governance and decision-making of the protocol to ensure that the development direction of the protocol is in line with the interests and needs of the community.

2.4 Base Competitive Rollup (BCR)

Base Competitive Rollup (BCR) is a key innovation in the Taiko protocol, designed to enhance the decentralization and security of the network. The following is a detailed introduction to BCR:

2.4.1 Core idea

BCR is an innovative Layer 2 solution designed to improve the decentralization and security of blockchain networks through competitive mechanisms. In the BCR model, multiple participants can compete to propose and validate blocks, thus eliminating a single entity’s control of the network.

2.4.2 How it works

1. Competitive Proposals

Proposers: Anyone can become a proposer and submit a block proposal. Proposers need to package user transactions and generate zero-knowledge proofs (zkProofs).

Proposal Competition: Multiple proposers can compete simultaneously to submit blocks, ensuring that the block generation and submission process is decentralized and free from any single point of centralized control.

1. Verification process

Verifiers: The verifier is responsible for verifying the blocks and zero-knowledge proofs submitted by the proposer. They ensure the security of the network by verifying the correctness and legality of transactions.

Competitive verification: Multiple validators can compete to validate blocks, which increases the security of the network because competition between validators ensures the accuracy and transparency of the verification process.

2.4.3 Advantages of BCR

1. Enhanced decentralization

Open to participation: The BCR model allows anyone to participate in block proposals and verification, eliminating dependence on a few entities and enhancing the decentralization of the network.

Censorship resistance: With multiple proposers and validators competing, it is difficult for any single entity to censor or control the network.

1. Improved security

Multi-factor authentication: Through the competitive verification mechanism, multiple verifiers independently verify blocks, which ensures the reliability and security of the verification process.

Reduce single points of failure: The BCR model reduces the risk of single points of failure because the operation of the network does not depend on a single proposer or validator.

1. Economic incentives

Fair play: Proposers and validators compete to receive economic rewards. This mechanism ensures that participants have incentives to provide honest and efficient services.

Fee burn: The proposer needs to burn a certain amount of TKO tokens to submit the block, which helps control the token supply and stabilize the token value.

2.5 Booster-Based Rollup (BBR)

Booster-Based Rollup (BBR) is a key component of the Taiko protocol and is designed to further expand the capabilities of the Ethereum network by improving transaction execution and storage efficiency. BBR’s design goal is to create a seamless user and developer experience that enables transactions to be executed as if they were on Layer 1 (L1), while maintaining its own storage on Layer 2 (L2).

2.5.1 Core features and How it works

1. Dual-Layer Structure

Separation of Execution and Storage: BBR implements a dual-layer structure for transaction execution and storage. This design allows transactions to be efficiently executed on L2 while maintaining necessary security and decentralization on L1.

Seamless Integration with L1: Through this dual-layer structure, BBR ensures smart contracts can maintain consistent addresses on both L1 and all BBRs, simplifying deployment and interaction processes.

1. Compatibility and scalability

Full Compatibility with Ethereum: BBR is fully compatible with Ethereum’s existing architecture, including hash functions, state trees, and Gas fees for each opcode. This means existing Ethereum smart contracts and dApps can seamlessly migrate to BBR.

Enhanced Scalability: BBR’s design goal is to improve Ethereum’s scalability, enabling faster transaction processing and lower costs to support larger-scale users and applications.

1. Booster Functionality

Versatility: BBR’s booster functionality can enhance any type of aggregation, whether optimistic or zk-rollup, leveraging BBR’s scalability.

Enhanced Ethereum Scalability: Through BBR, any aggregation can directly enhance Ethereum’s scalability, enabling it to handle more transactions and more complex applications.

2.5.2 Technical details

1. Consistency of smart contracts

Address Consistency: BBR ensures consistency of smart contract addresses between L1 and L2, meaning smart contracts deployed on L1 can seamlessly operate on L2, simplifying the development and deployment process.

Simplified Interaction: The interaction process between users and developers across different layers is streamlined, ensuring consistency in user experience and convenience in the development process.

1. Economic Incentive Mechanism

Fee Structure: BBR’s fee structure is designed to ensure transaction costs are sufficiently low to encourage user and developer adoption, while also ensuring the network’s economic incentive mechanism is robust enough to maintain the participation of validators and proposers.

Reward Distribution: Through a fair reward distribution mechanism, BBR ensures all participants in the network receive equitable incentives, thereby maintaining the decentralization and security of the network.

2.5.3 Advantage

1. Improve transaction efficiency

Fast transaction processing: By executing transactions on L2, BBR significantly increases transaction processing speed and reduces the burden on the Ethereum mainnet.

Reduce transaction costs: Executing trades on L2 significantly reduces transaction costs, making small transactions and high-frequency trading more economically viable.

1. Enhance network security

Decentralized verification: BBR adopts a decentralized verification mechanism to ensure the security and decentralization of the network, avoiding single points of failure and censorship risks.

Multi-factor authentication mechanism: Through the multi-verification mechanism, BBR provides a higher security guarantee to ensure the correctness and legality of all transactions.

1. Optimize user experience

Seamless user experience: BBR is designed to ensure that users have the same experience as L1 when using L2 networks, without having to worry about complex technical details.

Easy to develop and deploy: Developers can leverage existing Ethereum tools and infrastructure to easily develop and deploy smart contracts and dApps on BBR.

3. TKO Token

TKO is the native token of the Taiko network, designed to reward block validators and as part of transaction fees in the Taiko network.

3.1 Token Utility

1. Transaction Fees: Users conducting transactions on the Taiko Layer 2 network are required to pay transaction fees, which are collected by block proposers. Block proposers must burn a certain amount of TKO tokens and pay ETH to Ethereum validators to ensure their blocks are included on the Ethereum Layer 1 network.
2. Bonus system: TKO tokens are used to reward block validators who ensure the validity of transactions by generating and verifying zero-knowledge proofs (zkProofs). The transparency of TKO tokens ensures that the user experience is similar to that experienced on the Ethereum network.
3. Collateral System: TKO tokens are used in the collateral system of BCR and BBR to ensure the integrity and timeliness of network operations. Confiscated collateral is not lost but redirected to the Taiko Treasury on L1.
4. Governance role: TKO token holders can participate in network governance, influence network upgrades and manage Taiko Treasury, maintaining the permissionless nature of the network on L1 and L2.

3.2 Token supply

• Total Supply: 1 billion TKO tokens, divisible up to 18 decimal places.
• Token management: The minting or burning of TKO tokens strictly follows governance rules, ensuring transparent supply changes that reflect the consensus of token holders.

3.3 Token distribution

• DAO Treasury: 20%
• Guardian Prover Bonds: 2%
• Grants & RetroPGF: 5%
• Trailblazer airdrop: 10%
• Protocol Guild Airdrop: 1%
• Genesis airdrop: Up to 5%
• Liquidity and Market Making: 5%
• Investor: 11.62%
• Taiko Labs/ Core Team: 20%
• Taiko Foundation Reserve: 16.88%
• Taiko Official Prover Bonds: 1.5%

3.4 Token airdrop

1. Testnet interaction：

To increase the chances of receiving the TKO token airdrop, users can participate in Taiko’s testnet and increase the likelihood of the airdrop by interacting with its testnet.

Currently, Taiko has conducted multiple testnets. The latest testnet is Alpha3, which is designed to test the interaction between proposers and validators, as well as the new fee and incentive system.

1. Participation steps：

Add network: Add the Sepolia network and Taiko’s Alpha3 testnet to your MetaMask wallet.

Get testnet ETH: Get Sepolia ETH from the faucet.

Minting and bridging tokens: Connect your wallet, mint Bull and Horse tokens, and add these tokens to your MetaMask, and then bridge ETH, BLL, and Horse from Sepolia to Taiko.

Exchange and provide liquidity: In Taiko’s exchange test, import Taiko’s token list, exchange and provide liquidity for some tokens.

Developer tasks: For users with certain development experience, you can deploy and verify contracts, or build dApps according to the guide.

Complete tasks: Visit Taiko’s Galxe page, complete tasks such as transferring funds, exchanging assets, visiting pages, or answering quizzes to earn points. These points may be converted into future rewards.

4. Community and ecosystem development

According to Taiko’s official website, more than 90 projects have been integrated into the ecosystem.

These projects span a variety of sectors, including wallets (with notable EVM-native wallets), NFT marketplaces (with single- and multi-chain options), infrastructure (such as RPC and Oracle services), and DeFi applications. As a Type 1 Layer2 solution, Taiko provides a seamless migration path for Ethereum dApps, requiring little to no adjustment.

Additionally, the Taiko team has introduced a test token faucet, an official token and NFT bridge, as well as exchange functionality and a browser.

As of May 23, 2024, Taiko has 933,000 followers on the X (Twitter) platform, while Discord has accumulated 9.094 million members. By comparison, Optimism has 640,000 followers and Arbitrum has 980,000 followers. Taiko’s community has shown significant growth and engagement.

5. Team/financing situation

5.1 Team

The Taiko team comprises experienced blockchain professionals and engineers with profound backgrounds and rich experience in blockchain technology, cryptography, and distributed systems.

Co-founder Daniel Wang: Daniel was previously the founder and CEO of Loopring, a decentralized exchange protocol based on Ethereum that utilizes zero-knowledge proof technology for scalability. With extensive experience in the blockchain industry, Daniel brings rich expertise in blockchain technology and decentralized finance (DeFi) to Taiko. In Taiko, Daniel is responsible for overall strategic planning and technical guidance, driving the project’s development and innovation.

Co-founder Brecht Devos: Brecht, also a co-founder, serves as the head of the zero-knowledge research and development team. He was previously the Chief Architect at Loopring and possesses a deep background in cryptography and blockchain technology. Brecht has extensive practical experience in zero-knowledge proof technology and blockchain protocol design. At Taiko, Brecht leads the zero-knowledge research and development team, focusing on the research and implementation of zkRollup and zkEVM technologies.

Organizational Structure:

To ensure the effective operation of the Taiko network and compliance with regulatory requirements, Taiko has established multiple related entities and organizations, with several key entities playing crucial roles.

• Taiko Lab: A dedicated research and development team focused on advancing the Taiko protocol.
• Taiko Treasury: Financial resources funded by the Taiko protocol’s generated income, serving as the project’s fiscal reservoir.
• Taiko DAO: An organization composed of holders of the Taiko token (TKO), exercising voting rights to manage various aspects of the Taiko protocol. This includes decisions regarding smart contract upgrades, TKO parameters, and other protocol-related matters.
• Taiko Foundation: As a legal entity based in the Cayman Islands, the Taiko Foundation is responsible for overseeing the growth and development of the Taiko protocol and its broader ecosystem. The foundation specifically represents the Taiko DAO and token holders, providing financial support for technology development, ecosystem expansion, maintenance, collaboration with service providers, event management, and other initiatives through grants or alternative financing methods.
• Pacific Island Security Council: The Security Council, composed of individuals and entities selected by the Pacific Island Affairs Bureau, is responsible for taking prompt action in emergency situations according to the Pacific Island Accord. The primary task of the Security Council is to maintain the security and integrity of Taiko, authorizing them to implement upgrades or modifications to achieve this goal.

5.2 Financing

Initial financing and subsequent financing

• Amount: $22 million
• Time: Including two rounds of financing announced on June 8, 2023
• Investors: The financing is led by Sequoia China and Generative Ventures, and other participants include BAI Capital, GGV Capital, GSR Markets, IOSG Ventures, KuCoin Ventures, Mirana Ventures, OKX Ventures, Skyland Ventures, Token Bay Capital, Yunqi Partners, and other investors and notable contributors.

Latest financing

• Amount: $15 million
• Time: March 2, 2024
• Investors: The financing is led by Lightspeed, Faction, Hashed, Generative Ventures, and Token Bay Capital, with other investors including Wintermute Ventures, Presto Labs, Flow Traders, Amber Group, OKX Ventures, GSR, and WW Ventures.

These funds are used to deploy and optimize multiple testnets, including Alpha1, Alpha2, and Alpha3 testnets, as well as to verify and refine network design. They are also used to prepare for the mainnet launch at the end of the first quarter of 2024, including infrastructure development and technical support.

6. Project evaluation

6.1 Industry Analysis

The Taiko project belongs to the Ethereum Layer 2 scaling solution industry, specifically focusing on zkRollup technology. Taiko provides an efficient, secure, and decentralized blockchain scaling solution through zero-knowledge Ethereum Virtual Machine (zkEVM) technology. It aims to address Ethereum’s scalability issues while maintaining full compatibility with Ethereum.

In the field of Ethereum Layer 2 scaling solutions, particularly in zkRollup technology, there are several similar projects:

1. zkSync

Introduction: zkSync is an Ethereum Layer 2 scaling solution based on zkRollup technology, designed to provide fast, low-cost transactions while maintaining the security and decentralization of Ethereum.

Features: Fully compatible with Ethereum, supports smart contracts, and focuses on user experience and developer friendliness.

1. StarkNet

Introduction: StarkNet is a Layer 2 extension solution developed by StarkWare based on STARK (Scalable Transparent Argument of Knowledge) technology.

Features: Use STARK technology for zero-knowledge proof, provide high-throughput and low-latency transactions, and support complex smart contracts.

1. Loopring

Introduction: Loopring is a zkRollup project focusing on decentralized exchange (DEX) protocols, committed to providing an efficient trading experience and low fees.

Features: Through zkRollup technology, high-throughput decentralized transactions are achieved to ensure the security and privacy of user assets.

6.2 Project advantages

1. Permissionless and decentralized: Taiko stands out as a pioneering rollup-based solution by eliminating centralized sequencers and relying on Ethereum validators for transaction and block sequencing.
2. Seamless developer experience: Taiko’s use of ZK-EVM (Type 1 ZK-EVM) ensures compatibility with Ethereum execution standards, laying the foundation for a scalable Ethereum ecosystem.
3. Highly adaptable and future-proof: As a controversial rollup, Taiko empowers application chains to customize their proof systems and accept more efficient proofs as technology advances without modifying Taiko’s core protocol.
4. Strong community support: Taiko’s multiple testnets (Alpha1, Alpha2 and Alpha3) encourage community members to participate, and by interacting with the testnet, users have a chance to obtain airdrops. This not only increases community activity, but also helps verify and optimize network design.
5. Wide range of partners: Taiko has established strategic partnerships with a number of leading blockchain projects and companies to jointly promote the development of the ecosystem. These partners provide important support in technology research and development, marketing and community building.

Financing support

• Sufficient funds: Taiko has raised a total of $37 million across multiple rounds of funding, with support from well-known investors including Lightspeed, Faction, Hashed, Generative Ventures, and Token Bay Capital. Sufficient funds provide a solid guarantee for technology research and development, team expansion and infrastructure construction.

6.3 Projects Disadvantages

1. Market competition

• Fierce competitive environment: In the field of Ethereum Layer 2 scaling solutions, there are several strong competitors, such as zkSync, StarkNet, Loopring, Optimism and Arbitrum. These projects are also actively developing their technologies and ecosystems, and Taiko faces fierce market competition pressure.
• Competitive Advantage: Although Taiko has certain advantages in technological innovation and community building, how to stand out among many competitors is still a challenge.

1. Technical implementation

• Technical complexity: zkEVM and zkRollup technologies are highly complex and require a lot of R&D investment and technical support. There are still technical challenges to achieve fully decentralized and efficient zero-knowledge proofs.
• Mainnet release: Taiko’s mainnet is planned to be released at the end of the first quarter of 2024. Although multiple testnets have been successful, the smooth launch and widespread application of the mainnet still need to be further verified.

1. User Adoption

• User Experience: While Taiko offers many technical advantages, improving user experience to attract more users and developers to use its network remains a crucial issue. Particularly, continuous optimization is needed in terms of user habits and compatibility with developer tools.
• Education and Promotion: More education and promotion activities are needed to help users and developers understand and use the Taiko network, especially in complex zero-knowledge proof technology and decentralized governance models.

7. Conclusion

All in all, the Taiko project offers an innovative zkRollup and zkEVM technology, providing Ethereum with an efficient, secure, and decentralized scaling solution. With support from multiple rounds of financing and a governance model based on decentralized autonomous organization (DAO), Taiko has made significant progress in technical development and community building. Despite facing market competition and technical challenges, Taiko aims to occupy a prominent position in the blockchain scaling solution domain by continuously optimizing its technology and expanding its ecosystem. Ultimately, it seeks to provide users and developers with an efficient and secure blockchain environment.

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