Dialogue with Taiko: What is the multi-proof route? What is the relationship with the end of Ethereum?

On May 23, Taiko announced the first round of airdrop query page, which sparked a wave of controversy about fairness in the community. In the face of the response from its founder Daniel Wang, the community does not seem to buy it either.

At the same time, on May 25, Ethereum co-founder Vitalik Buterin proposed the first block as a block proposer on the Taiko mainnet, and noted in the accompanying remarks of the block: “I am pleased to see Taiko being launched as a Based Rollup platform, and Ethereum benefits from the adoption of various L2s in different ways. I appreciate that Taiko is one of the first projects to develop in this direction.”

After the Cancun upgrade, the focus of the Ethereum ecosystem will once again return to the L2 field. Unlike other Rollup projects, Taiko is developing a solution based on Based Rollup, attracting favor from many VCs such as Sequoia China, Generative Ventures, Hashed, Lightspeed Faction, Token Bay Capital, and Flow Traders. It is hard not to be curious about what makes Taiko different from other well-known ZK scaling projects. How will its scaling solution affect the L2 ecosystem?

With these questions in mind, ChainFeeds spoke with the Taiko team to discuss the origin, vision, Ethereum scaling solutions, and other related topics.

Key Points:

• Taiko founder Daniel Wang hopes to expand Ethereum without sacrificing decentralization, achieving a scenario where centralized and decentralized second-layer networks coexist, enabling dApps to make decisions between the two choices.
• Contestable Rollup is an abstraction of zkRollup and Optimistic Rollup. In the future, if Zero-Knowledge Proofs become cheap enough, Contestable can be configured into pure zkRollup.
• In the process of developing SGX proof, the Taiko team gradually realized the importance of stateless clients and firmly believed in the feasibility of running stateless clients to generate zero-knowledge proofs in zkVM in the future.
• Taiko has been launched on the mainnet, block submission and proof are all permissionless, but the contract still has an owner. The Taiko team plans to transfer all contract ownership to Taiko DAO after about a year of mainnet launch, completely giving up ownership and control of the network.

Taiko Origin: Expanding Ethereum without sacrificing decentralization

Taiko founder Daniel Wang created the first Ethereum ecosystem DEX protocol Loopring based on ZKRollup in 2017. However, the architecture of Loopring does not fully align with Daniel’s vision. Daniel hopes to expand Ethereum without sacrificing decentralization, achieving a situation where both centralized and decentralized layer 2 networks coexist, allowing decentralized applications to make wiser decisions between the two options. However, Loopring can only be constructed as a non-programmable layer 2 network, lacking a virtual machine structure, and its block generation mechanism is also centralized in order to reduce costs.

Before founding Taiko, Daniel Wang and like-minded developers had multiple discussions focusing on two main directions: Decentralized social web or the infrastructure needed for the decentralized social web, “permissionless layer-2 network”. After careful consideration, it was generally believed that venturing into the decentralized social web field carried higher risks, while the permissionless layer-2 network offered greater differentiation and competitive space. This led to the birth of Taiko.

Taiko is a Type-1 zkEVM, which provides exactly the same opcodes and functionality as Ethereum, ensuring high compatibility with the existing Ethereum ecosystem. The Taiko team emphasizes that Taiko was initially designed with a Based Rollup structure, allowing Ethereum validators to be ultimately responsible for Taiko’s block generation, achieving decentralization of proposers. In March this year, Taiko completed a Series A funding of $15 million led by Lightspeed Faction, Hashed, Generative Ventures, and Token Bay Capital, bringing the total funding amount to $37 million. In response to VC’s favor, the Taiko team stated that they highly value the strategic synergy between investment institutions and Taiko. Furthermore, apart from the advantages of being a Type-1 system and a fully decentralized architecture, Taiko’s rapid growth to become one of the world’s largest Discord communities (with over 1.07 million members) and attracting the deployment of hundreds of dApps would not have been possible without the support of investors.

Ethereum Rollup Design Framework Exploration: BCR and BBR

Taiko is one of the main differences from other Rollups in that it chooses the Based Rollup mechanism, which does not rely on a centralized sequencer, but relies on Ethereum validators to order transactions and blocks. Furthermore, Taiko co-founder Daniel Wang proposed the concept of “Based Contestable Rollup (BCR)” at the end of 2023. This concept introduces the Contestable mechanism because ZK-EVM code cannot be error-free forever, and Taiko is decentralized with a lower fault tolerance, so a cautious approach is needed.

The Taiko team also elaborated on the primary considerations for choosing a Contestable design：

• First, Based Rollup does not require permission, but it must introduce “higher-level proof” to solve potential bugs in the software. This avoids the necessity for centralized networks to shut down the network for data correction. Of course, as the Taiko network operates over time, this error correction mechanism can be gradually eliminated.
• Secondly, although the SGX proof is thousands of times cheaper than zero-knowledge proof, it is not the most ideal or decentralized way of verification. Contestable design allows challenges to be raised when there are doubts about the SGX proof, requiring the use of higher-level proofs to re-verify the block, which not only reduces costs but also increases the credibility of the verification.
• Finally, Contestable Rollup has the flexibility and scalability, and can be seen as an abstraction of zkRollup and Optimistic Rollup. For example, if zero-knowledge proofs become cheaper in the future, we can configure Contestable Rollup to be purely zkRollup, or configure it as purely Optimistic Rollup according to the needs of the application, thus adapting to different verification requirements.

Based Contestable Rollup architecture was also described in detail by Daniel Wang in the article. BCR is a rollup with controversial features and based ordering. Under this design, anyone can dispute the state transitions in a block, but they must pay a dispute margin in Taiko tokens and provide higher-level proofs to resolve the dispute and validate the block. If the challenger wins, they can retrieve the dispute margin and receive 1/4 of the original prover’s validity margin. The new prover will also receive 1/4 of the original prover’s validity margin as a proof fee, and the remaining 1/2 will be confiscated. The same applies in reverse. It is worth noting that in this mechanism, multiple signers act as the high-level of the proof hierarchy in the first few years. As the highest level of proof, in this case, state transitions are considered final and no further questioning is allowed.

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In addition, the BCR architecture of Taiko also has a core feature, which allows each level to use its own proof system. The Taiko team stated that under the Contestable Rollup-based architecture, proofs of different levels can be constructed, such as the lowest cost Optimistic proof, followed by SGX proof, and then zkEVM or zkVM proof. These different types of proofs embody the Contestable concept and can also combine these proofs to form a mixed multiple proof system, for example, “SGX+zkVM” can be regarded as a more trustworthy proof than using zkVM proof alone.

As an important milestone, the Taiko project plans to test the actual operation of BCR on the Alpha-6 testnet Katla, and then launch it on the mainnet. After that, Taiko plans to either upgrade the protocol to Boosted Based Rollup (BBR) or launch an independent BBR layer as the second important milestone. Taiko believes that Boosted Based Rollup is a wise choice to achieve Ethereum’s native scalability. By allowing L1 validators to propose new blocks for the entire network, Ethereum will have out-of-the-box scalability. For developers, BBR can shard transaction execution and storage. For users, the user experience will be improved because dApps will be distributed across all L2s.

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Narrative Upgrade: Switch to ZKVM?

Everyone is familiar with zkEVM, but EVM is not designed to run in zero-knowledge circuits, so in practice, implementing zkEVM often requires some trade-offs. Unlike zkEVM, zkVM is a virtual machine implemented as a zero-knowledge proof system circuit. Its advantages include: no need to learn cryptography and ZKP system, easy to use; generality, Turing complete ZK-VM can be used as proof calculation for any computation; simplicity, a set of simple constraints is enough to describe the entire VM; can use recursion, proof verification is just another program executed on the VM.

Taiko has started the transition from using the zkEVM model to using the zkVM model. After switching to the zkVM model, Taiko can modify and run a client to generate a ZK proof. In order to ensure robustness, Taiko contributes to building a multi-proof system and diversifies encryption assumptions by contributing to multiple zkVMs (such as RISC Zero, SP1, Powdr), and uses SGX to enhance privacy and security without leaking data.

The Taiko team stated that Taiko is one of the earliest teams to participate in the development of Ethereum Foundation’s PSE zkEVM, and has made contributions and optimizations to key circuits such as Keccak and Moore. However, during this process, they also realized the limitations of this development model, such as the code being low-level and difficult to test and verify. It is not friendly to newbies. As the team continues to explore in the SGX proof development process, they gradually realize the importance of stateless clients. Under the influence of the progress made by the Risc0 team, they firmly believe in the feasibility of running stateless clients to generate zero-knowledge proofs in zkVM in the future. Currently, Taiko has cooperated with Risc0, and will also cooperate with SP1 and more zkVM teams in the future to aggregate these different proof systems through Contestable Rollup, while maintaining the second-layer design of Taiko and fully coupling with each zkVM.

In addition, Taiko has launched on the Ethereum mainnet on the 27th, and has currently processed about 15% of the entire Ethereum network’s data blocks. The team emphasizes that although in Stage1 mainnet mode, block submission and proof are permissionless, contracts still have owners. The team plans to transfer the contract ownership to Taiko DAO after about a year on the mainnet, completely relinquishing network ownership and control. The Taiko team also stated that they will invest more resources in the research and development of Preconfirmation, MEV, and Taiko BBR solutions, hoping to bring more surprises to ecosystem projects and community users in the future.

Airdrop Turmoil: Can Taiko Restore Community Confidence?

Taiko announced the TKO tokenomics on May 23, announcing that 5% of the initial token supply will be used for the genesis airdrop. According to the official FAQ, there will be 300,000 addresses eligible to claim over 50 million tokens. While this move is intended to give back to the community, it has sparked controversy over the “fairness of the airdrop.” Some community members have reported receiving fewer airdropped tokens than expected, and some users have stated that they participated in related tasks but did not receive the airdrop.

In the face of community dissatisfaction, Taiko co-founder Daniel Wang also responded, stating that Taiko’s goal is fairness, but it cannot satisfy everyone, and apologizing to users who did not receive TKO. However, the community seems to be skeptical of his remarks. Later, Daniel Wang made another response in the Discord community, stating that if a user did not receive the airdrop, it was because others had more points. As for the opacity of the airdrop rules, transparency cannot resolve disagreements as the definition of “fairness” is highly subjective. These remarks once again pushed Taiko into the public eye, with some community members calling for a boycott of Taiko. However, it is not uncommon for airdrops to be questioned by the community, as recent projects offering airdrops have faced similar situations. In particular, when airdrop manipulation becomes an industry and involves the participation of a large number of professional teams, they also become part of the ecosystem, and community opinion may also be influenced by these teams. In the future, Taiko plans to carry out two more rounds of airdrops.