What is Taiko?

What is Taiko?

Taiko is a fully open-source, permissionless Ethereum-equivalent ZK-Rollup designed to make Ethereum transactions cheaper while maintaining its core properties such as censorship resistance, security, and permissionlessness. By implementing a based rollup architecture, Taiko extends Ethereum's capabilities without altering its fundamental characteristics, ensuring seamless integration and use akin to Ethereum itself.

The Taiko protocol leverages based sequencing, where the sequencing of transactions is handled by Ethereum L1 validators, eliminating the need for centralized sequencers. Additionally, it features a multi-proof system for enhanced security and a contestation mechanism to validate state transitions, making it a robust and scalable solution for reducing transaction fees and improving Ethereum's scalability.

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How Does Taiko Work?

Taiko operates as a based contestable rollup on Ethereum, enhancing scalability and reducing transaction costs while preserving the core attributes of the Ethereum network. It achieves this through a combination of based sequencing, multi-proof systems, and a unique contestation mechanism.

Here are the key components of Taiko's protocol:

• Based Sequencing: Transactions are sequenced by Ethereum L1 validators, ensuring decentralization and security without relying on centralized sequencers.
• Contestable Rollup: Proposers submit state transition proofs which enter a cooldown period during which they can be contested by others, maintaining integrity through financial incentives.
• Multi-Proof System: Multiple tiers of proofs, including SGX and ZK proofs, enhance security by allowing composite proofs and reducing the likelihood of invalid transitions.
• Decentralized Governance: Future governance will be managed by a DAO, progressively transferring control to Taiko tokenholders, ensuring community-driven development and decision-making.
• Guardian Provers: Initially, guardian provers provide an additional security layer, ensuring reliability during the early stages of the rollup’s deployment.

This architecture enables Taiko to provide a scalable, secure, and cost-effective solution for Ethereum transactions, paving the way for broader adoption and use of decentralized applications.

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Taiko vs Optimistic Rollups

Taiko differentiates itself from Optimistic Rollups like Optimism and Arbitrum by solving the centralized sequencer issue. While Optimistic Rollups rely on centralized sequencers to order transactions, which can introduce trust and censorship risks, Taiko uses Ethereum L1 validators for sequencing.

This approach decentralizes the sequencing process, eliminating single points of failure and enhancing security. Taiko’s based sequencing ensures that transaction ordering is permissionless and community-driven, providing a more robust and decentralized solution compared to the centralized mechanisms used by other L2s.

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Taiko Tokenomics

Taiko is set to distribute 5% of its 1 billion token supply through a “genesis airdrop” ahead of its mainnet launch. Eligibility for this airdrop includes those who interacted with the Taiko testnet, block proposers and provers, contributors to specific GitHub repositories, and participants of the Ethereum ICO.

The overall allocation of Taiko's token supply is structured as follows:

• 48.5% for Key Stakeholders: This includes 20% for Taiko Labs and the core team, 16.88% for Taiko Foundation reserves, and 11.62% for investors.
• 20% to the DAO Treasury: Ensuring community governance and future project development.
• 5% for Grants and RetroPGF: Supporting ecosystem growth and rewarding contributors.
• 5% for Liquidity and Market Making: Enhancing market stability and liquidity.
• 10% for the Trailblazer Airdrop: Separate from the genesis airdrop, rewarding early adopters and active community members.

This strategic distribution aims to incentivize participation, ensure robust governance, and support the long-term sustainability and growth of the Taiko ecosystem.

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Taiko Mainnet Release

Taiko's mainnet was released on May 27th, 2024, marking a significant milestone for the Ethereum community. The inaugural block was proposed by Vitalik Buterin, co-founder of Ethereum, who expressed excitement about Taiko's innovative approach as a based rollup.

This launch represents the culmination of two years of development, offering a scalable, decentralized, and cost-effective solution that maintains Ethereum's core properties while enabling seamless interaction and transaction processing on the network.

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Bottom Line

In conclusion, Taiko significantly enhances Ethereum's scalability and cost-efficiency through its based contestable rollup architecture. Utilizing Ethereum L1 validators for transaction sequencing and a multi-proof system for security, Taiko maintains Ethereum's core principles of decentralization and security. The mainnet launch, with Vitalik Buterin proposing the first block, marks a pivotal step forward, showcasing Taiko's potential to revolutionize Ethereum transaction processing and support broader adoption of decentralized applications.