Introduction

Taiko is a blockchain project designed to scale Ethereum without compromising on its decentralized and secure nature. It operates as an Ethereum-equivalent ZK-EVM (Zero-Knowledge Ethereum Virtual Machine), ensuring compatibility with Ethereum’s existing tools and applications. By leveraging zero-knowledge proofs, Taiko provides a scalable solution that enhances transaction privacy and efficiency. This enables easy deployment of decentralized applications (dApps) without requiring additional tools or reaudits, thereby supporting the broader Ethereum ecosystem.

What is Taiko?

Taiko ($TAIKO) is a blockchain project that was developed with the objective to address the scalability issues that are commonly faced by Ethereum. By implementing a zero-knowledge Ethereum Virtual Machine (ZK-EVM), it ensures that it remains compatible with existing Ethereum tools and applications. This compatibility is achieved without the constant need of modifications, ultimately making it easier for developers to transition to and utilize the Taiko network. One of the main goals of Taiko is to provide a scalable solution that leverages zero-knowledge proofs to ensure transaction privacy and efficiency.

Taiko’s Development History

Taiko’s development began with a focus on zero-knowledge proofs (ZKPs) in 2018. Its development team was the first to create Zero-Knowledge rollup technology on Ethereum, demonstrating the potential of ZKPs for scaling the blockchain. This early success laid the foundation for Taiko’s core technology, with subsequent innovations that included Based Contestable Rollups (BCRs) and Based Booster Rollups (BBRs).

On June 6, 2024, Taiko transitioned to a fully permissionless and decentralized network, which has the potential to make the proposing and proving processes of the project open to the public, reflecting Taiko’s commitment to community-driven development. Its launch on the Ethereum mainnet marked a very significant step in its evolution.

Taiko’s Development Team

The Taiko development team has extensive experience with zero-knowledge proofs and blockchain technology. It includes important figures, such as Matthew, Brecht, Dave, Ben, and Keng, who contribute to different aspects of the project, from protocol development to community engagement and event participation.

The team operates remotely, offering competitive compensation and the opportunity to contribute to an innovative technology that is reshaping the blockchain landscape. Their work on the first ZK rollup on Ethereum demonstrated their expertise in crypto and blockchain and their commitment to open-source development and community-driven progress, ensuring alignment with Ethereum’s decentralized purposes. The project benefits from strategic partnerships and collaborations with other blockchain initiatives, enhancing its capabilities and expanding its reach.

Technical Features

The Taiko protocol consists of a set of smart contracts deployed on Ethereum. These contracts define the network’s rules and operations and cover different aspects, including transaction sequencing, validation, and governance, ensuring transparency and consistency in operations.

The project’s infrastructure includes components designed to enhance functionality and user experience. A notable element is its canonical bridge, which allows users to interact with the Taiko ecosystem by bridging assets between Ethereum and Taiko. The Taiko Explorer provides tools for analyzing contracts and transactions on the Taiko blockchain, facilitating transparency and user engagement.

Technical Architecture of Taiko

Ethereum-equivalent ZK-EVM

Taiko’s ZK-EVM (Zero-Knowledge Ethereum Virtual Machine) mimics Ethereum’s existing environment, ensuring compatibility with Ethereum tools and applications without requiring changes to be made to the blockchain. It allows the execution of smart contracts with zero-knowledge proofs, meaning that transactions are able to be validated without revealing the underlying data to other parties. This ensures both privacy and security while maintaining the efficiency of the network.

The ZK-EVM uses zk-SNARKs (Zero-Knowledge Succinct Non-Interactive Arguments of Knowledge), a type of cryptographic proof that enables these features. Taiko’s ZK-EVM architecture involves two main components: the Taiko client and the execution engine.

• The Taiko client decodes Layer 2 (L2) blocks from Layer 1 (L1) data and passes them to the execution engine.
• The execution engine, based on Geth (Go-Ethereum), processes these blocks, maintains the state of the blockchain, and ensures that the JSON-RPC API remains consistent with Ethereum’s standards.

This setup allows developers to interact with Taiko the way they would with Ethereum, making their learning curve easier and enabling larger adoption.

In terms of security, Taiko’s ZK-EVM was designed to be quantum-resistant, integrating quantum-resistant techniques to secure its ZK-Rollup infrastructure. By enhancing smart contracts to withstand quantum attacks, it is capable of ensuring long-term security and viability.

What are Based Rollups?

Based rollups are a method of scaling Ethereum by bundling multiple transactions into a single batch, which is then processed off-chain before being submitted to the Ethereum mainnet, which ultimately reduces the amount of data that needs to be recorded on-chain, consequently lowering transaction costs and increasing throughput.

This technology is implemented in Taiko through a permissionless proposer/prover network, where validators are responsible for transaction sequencing and act decentralized, without requiring additional trust assumptions beyond Ethereum’s.

This design ensures that the transaction sequencing is simple, inheriting Ethereum’s liveness, and maintaining credible neutrality. Contestation mechanisms are included to ensure that fraudulent transactions can be challenged and corrected, ensuring the integrity of the network and that all transactions are processed correctly.

Contestable Rollups (BCR) and Booster Rollups (BBR)

Contestable Rollups (BCR) are a modular, multi-proof design that combines the strengths of Ethereum sequencing with a contestation mechanism, allowing for the transaction fees to be lower. Regarding the security of transactions, BCRs enable participants to challenge the validity when there is a suspicion of fraud, ensuring that any strange activities are detected and addressed promptly.

Booster Rollups (BBR) are designed to scale Ethereum dApps without requiring redeployment on all Layer 2 (L2) solutions. They can achieve this by sharding transaction execution and storage, minimizing developer efforts, and reducing redeployment costs. This addresses liquidity fragmentation across L2s and enhances the network scalability.

Taiko provides an efficient scaling solution by combining based rollups with booster rollups. Integrating BCRs and BBRs ensures the network can handle high transaction volumes while maintaining security and decentralization, offering a scalable, efficient, and secure environment for deploying and managing dApps.

Multi-proof Design and its Benefits

Taiko’s multi-proof design involves using different proof mechanisms, including zkVMs (zero-knowledge Virtual Machines), TEE (Trusted Execution Environments), and guardian proofs to ensures that multiple layers of security and validation are applied to transactions, enhancing the overall reliability of the network to provide certainty about the execution of transactions within the rollup, ensuring that all operations are conducted correctly.

Proving blocks ensures that all transactions within a block are executed correctly and that the resulting state is accurate. Provers, who can operate permissionless, generate these proofs and submit them for validation. This proving process enhances security by distributing the responsibility of validation across multiple participants.

The multi-proof design in Taiko also supports parallel proving, which allows multiple proofs to be generated and validated simultaneously.. By verifying blocks in batches, Taiko ensures that the network can handle high volumes of transactions without compromising on cost or security.

Rollup technology on Taiko

Bridging Assets to and from Taiko

Bridging assets between Ethereum and Taiko involves transferring tokens and other assets from one network to another using a canonical bridge to facilitate these transfers. The bridge operates by locking assets on the Ethereum mainnet and minting equivalent assets on the Taiko network, and vice versa. This process starts when a user initiates a transfer by locking their assets in a smart contract on the Ethereum mainnet.

This smart contract verifies the validity of the transaction and then signals the Taiko network to mint an equivalent amount of assets, that will then be credited to the user’s account on Taiko, allowing them to use these assets within this ecosystem. Then, when the user wants to transfer assets back to Ethereum, they initiate a burn transaction on the Taiko network that will destroy the assets on Taiko and signal to the Ethereum mainnet to unlock the equivalent amount of assets. The unlocked assets are credited to the user’s account on Ethereum, completing the transfer.

What is the Taiko Token ($TAIKO)?

The Taiko Token ($TAIKO) has several functions in the Taiko ecosystem. It is used as a reward to incentivize validators and provers who participate in the transaction sequencing and validation processes. This ensures that there is a continuous pool of participants to process transactions and generate the necessary cryptographic proofs for the network.

$TAIKO also facilitates governance within the Taiko network. As in other decentralized networks, token holders can vote on proposals that affect the network’s development and operation, ensuring that the community has a voice in the project’s future direction, covering different topics, including protocol upgrades and fee structures.

Token Distribution

The distribution of $TAIKO tokens aims to ensure community participation in the network in the different roles available. A portion of the total supply of $TAIKO is allocated for community incentives, grants, and airdrops; initiatives that support community growth, developer engagement, and encourage the adoption of the Taiko network.

Airdrops are used to reward early adopters, contributors, and active community members. During the launch phases, airdrops were distributed to users who participated in testnets, provided valuable feedback, or contributed to the project’s development.

Taiko network allows token staking, through which validators and provers will stake $TAIKO tokens to participate in transaction validation and proof generation processes. It works both as a security mechanism, as participants have a financial stake in the network’s integrity, incentivizing honest participation.

Ecosystem and Community

dApps and Projects on Taiko

The Taiko ecosystem has a variety of decentralized applications (dApps) and projects being developed on it. One prominent project is the integration of API3’s first-party oracles, which provide data feeds optimized for transparency and security, enhancing the security of DeFi protocols by capturing and redirecting MEV (Miner Extractable Value) to project treasuries, thus improving the financial sustainability of these protocols.

MoveLabs is another key player in the Taiko ecosystem, bringing significant experience from projects like Sui, Aptos, and BNB Chain. Their involvement in Taiko focuses on developing and integrating innovative blockchain solutions, contributing to the growth and diversity of the ecosystem.

Taiko also supports NFT projects, as seen with the NFTs2Me platform. This platform simplifies the deployment of NFT collections on the Taiko network, providing tools for creators to launch and manage their NFT projects easily.

Interactive and gaming applications are also being explored within Taiko’s zkEVM framework. Developers are working on foundational elements for zkEVM-enabled dApps, including gaming NFTs and other interactive features. The ecosystem is set to grow with the anticipated integration of well-known DeFi applications like Aave.

Community Engagement and Support Initiatives

Taiko emphasizes community engagement through various initiatives, including community calls, forums, and social media interactions. These allow users to discuss projects, share ideas, and stay updated on the latest developments. The Taiko team regularly seeks feedback from the community to guide its development, a collaborative approach that ensures that the network evolves in a way that meets the needs and expectations of its users. An important cultural point is that feedback mechanisms are in place to allow community members to voice their opinions and suggestions.

The project’s website provides Educational resources and documentation to help users navigate, learn and understand how the Taiko platform works. Comprehensive guides and tutorials assist developers in building and deploying dApps, while user-friendly tools make it easier for participants to engage with the network. These support initiatives aim to empower users and create a knowledgeable community.

Conclusion

Taiko ($TAIKO) significantly advances Ethereum scalability by implementing a zero-knowledge Ethereum Virtual Machine (ZK-EVM). It combines advanced cryptographic techniques with innovative rollup designs which helps to ensure private, and secure transactions. Its ecosystem supports dApps and other projects, creating a collaborative and innovative community. Taiko actively supports developers and promotes decentralized governance through grant programs and community initiatives. As Taiko continues to evolve with planned upgrades and enhancements, it stands as a forward-thinking solution poised to address the challenges of blockchain scalability and security.