Taiko Lianchuang: Ethereum expansion plan should be more decentralized

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 Taiko's mainnet at the end of May this year, it has attracted much attention, and it has also achieved many outstanding data performances, such as reducing L1 Gas costs by more than 30%, TVL up to nearly 200 million US dollars, and the price of the currency rose against the market to break through 3 US dollars.

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

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

Golden Finance: First of all, congratulations on the launch of Taiko's public chain mainnet for nearly two months. Then please briefly introduce Taiko.

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

Taiko is a Type-1 zkEVM, which means that 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.

The uniqueness of Taiko is that we have implemented based rollup technology. This innovation allows Ethereum validators to be ultimately responsible for Taiko's block production, thereby achieving decentralization of proposers. Our goal is to scale Ethereum without sacrificing decentralization and create 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 financing round led by Lightspeed Faction, Hashed, Generative Ventures and Token Bay Capital in March this year, bringing our total financing to $37 million. These investments not only provide us with financial support, but more importantly, bring strategic partnerships. We attach great importance to the synergy with investment institutions, and their industry insights and network resources are crucial to Taiko's development.

It is indeed encouraging that Taiko has become one of the largest Discord communities in the world (with more than 1.07 million members) in a short period of time and attracted hundreds of dApps to deploy. This achievement is the result of a combination of factors: our technological advantages (Type-1 zkEVM), our commitment to decentralization, our community building strategy, and the support and trust of our investors.

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, and we are 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 in 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 a non-programmable second-layer network with a centralized block production mechanism, this experience provided us with valuable experience and even some insights into Ethereum's expansion.

The successful launch of Loopring provided an important reference for Ethereum's roadmap with Rollup as the core. This experience 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 permissionless and decentralized, 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 permissionless and decentralized second-layer network, and the "hair" is the decentralized application.

The main difficulty in building Type-1 zkEVM is combining Type-1 and zkEVM, as well as the scarcity of related 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. But 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 research and 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 zk research and development.

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

At present, another important challenge we face is how to provide a better user experience and reduce the frequency of blocks through preconfirmation of transactions. Transaction preconfirmation can allow 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 blocks 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, interactive data, etc.

Daniel Wang:With the mainnet online for nearly two months, taiko has achieved amazing performance in many aspects. We at Taiko Labs have compiled the relevant data, as follows:

In the first month of the launch of the autonomous network, Taiko's total locked value (TVL) reached US$138.7 million, with an average daily transaction volume of 19.53 transactions per second, a maximum of 45.3 transactions per second, a total transaction volume of more than 21.57 million transactions, and nearly 700,000 independent wallets.

In addition, in terms of games and DeFi applications, Taiko has integrated more than 80 projects such as LayerZero, Stargate, and Oku Trade. Taiko's Trailblazers loyalty program 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:The main differences are as follows:

1. Based Rollup mechanism

One of the core features of Taiko is the use 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 introduces the dispute (Contestable) mechanism, mainly 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 stopping operations for repairs like a centralized network.

While ensuring network security, it is necessary to balance verification costs and 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, a mechanism that both ensures the security of the network and provides an economic incentive mechanism.

3. Multi-level proof system

Taiko's 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 a pure zkRollup or Optimistic Rollup, or a hybrid of the two, based on future technological developments and application requirements.

Golden Finance:The current competition in Ethereum L2 is fierce. As a player, how do you view the current development of L2? Compared with other competitors, what are Taiko's 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 Ethereum's expansion, then you should not stop at these centralized second-layer networks. Ethereum's 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 area, especially in terms of improving decentralization and security.

Compared with other competitors, Taiko's biggest advantages and features include the following.

First, Taiko uses Based Rollup technology, which is a more thorough decentralization solution. In this way, we hope to provide Ethereum with a truly decentralized scaling solution.

Second, 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, Taiko's advantages will be very obvious.

At the same time, we also hope to influence the decentralization process of other current second-layer networks through our own accelerated decentralization and ownerless efforts. Ethereum has not gone far on its 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:Currently, Bitcoin L2 is developing in full swing. Do you think this trend will have an impact on the Ethereum L2 landscape? The attention of the crypto market has shifted somewhat. Will it affect Taiko's progress and development strategy?

Daniel Wang:I think Bitcoin's second-layer network projects have no substantive significance in the long run, and should even stop developing. The short-term "impact" of these projects on Ethereum is mainly reflected in attracting a part of the people who might have originally 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 Ethereum's second-layer network.

The original intention of the Bitcoin network was mainly to serve 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 stronger programmability and flexibility.

For Taiko, the short-term shift in the crypto market's 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, Taiko's goals and roadmap will not change due to changes in short-term market sentiment.

V God 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 Taiko's technical implementation. During the ethcc, Vitalik once again recognized Taiko's unique positioning in his presentation ppt. Previously, Taiko has also been favored by many institutions including Sequoia, OKX, and IOSG, and has raised a total of US$37 million in three rounds. Taiko has become one of the world's largest Discord communities (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 and fully decentralized architecture, the support of investors is also 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. Taiko's 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 decentralized solution. Our continuous technological breakthroughs, coupled with our pursuit of an "ownerless" state, are highly consistent with Ethereum's 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 maintain the community's activity and cohesion 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 Taiko's ecosystem.

Our support for developers has also been recognized. We provide developers with a space for collaboration and discussion through platforms such as GitHub and Discord, while increasing Taiko's 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 Taiko's 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's statement that the Year of the Dragon opened a new door for Ethereum, especially the expected impact of ETF. 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 the ETF opens a new door for Ethereum and its L2 ecosystem, which will bring in a wider range of institutional and individual investors.

As more funds and talents flow into the Ethereum ecosystem, we will see further acceleration of innovation and development in the L2 field. The approval 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 field of second-layer expansion, and may give rise to new and revolutionary rollup designs.

Regarding the explosive growth 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 the future development of Taiko?

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 onwer permissions 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 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, and we believe this will drive Taiko to maintain its leading position in the highly competitive L2 market.