Hunting for a useful guide to Taiko? Your quest ends now! Proceed with this complete article all about it!
What is Taiko?
Taiko is the first and only Ethereum-equivalent (Type 1) ZK-EVM solution on the market designed to enhance Ethereum’s scalability while maintaining its technical and fundamental principles, especially regarding security. Therefore, Taiko promotes itself as the “fully open-source, permissionless, Ethereum-equivalent ZK-Rollup” and claims that “using Taiko feels the same as using Ethereum.”
To achieve its vision of scaling Ethereum while upholding the root principles of security, permissionless, and decentralization, the Taiko team has worked hard on ZK-EVM circuits, decentralized proposers, and decentralized provers since Q1 2022 and finally launched the mainnet recently! 🥁With its innovative and unique solution in the L2 market, Taiko has already raised a total of $37 million!
One of the notable characteristics of Taiko is Based Contestable Rollups (BCR), a configurable, multi-proof rollup design. With BCR, costs are reduced, decentralization is reinforced, and security is heightened through a multi-proof system.
The Team behind Taiko
Taiko is developed by Taiko Labs, a research and development group that works on the Taiko protocol. The initial and core members of Taiko Labs, led by Daniel Wang as CEO and Brecht Devos as CTO, have development experience with Loopring, the first ZK-Rollup deployed on Ethereum. Unlike a network, Loopring functions more like an application, including a DEX, smart wallet, and more, reflecting its objective to design and engineer the best-in-class zkRollup exchange and payment protocol on Ethereum and to operate products that bring it to users worldwide. On the other hand, the Taiko mainnet is truly a network that is universal with upgraded technologies.
With its solid and experienced background, funding from well-known investors, and airdrop expectations, Taiko has attracted attention since its very early stages! 🚀
Taiko’s Pros and Cons
Let’s review some of the merits and limitations of Taiko in detail. 🥁
Pros
- Decentralized like Ethereum- Security First: Taiko requires no additional trust assumptions beyond those of Ethereum. As a rollup with a permissionless and decentralized proposer/prover network from Day 1, Taiko inherits Ethereum’s level of decentralization.🛡️
- Developer-Friendly: Taiko is an Ethereum-equivalent (Type 1) ZK-EVM, which is highly compatible with Ethereum, ensuring that existing Ethereum apps can be easily migrated.
- Faster & Cheaper Transactions: Taiko uses zkSNARKs, a type of ZK-proof, to accelerate zero-knowledge proof generation and lower transaction fees.
- Permissionless: Anyone willing can join and leave the network at any time without causing significant disruption. No single entity has the authority to allowlist or blocklist participants. This feature ensures that transactions involving privacy will not be investigated.
Cons
- Lose MEV revenue: Due to Taiko adopting Based Rollup technology, they forgo the opportunity to generate revenue from MEV (Miner Extractable Value). This is the cost of being fully decentralized.
- Total Value Locked (TVL): According to L2Beat, Taiko has a TVL of just $38.39M, which is considerably lower than that of major L2 solutions. This indicates that it has less capital locked in its ecosystem compared to its competitors.
- Severe Competitive Landscape: In scalability solutions, Taiko faces competition from leaders like Arbitrum and OP Mainnet. In this competitive market, success hinges on marketing strategies to attract users and identify “killer” applications, as technical advantages alone are not sufficient.
Comparative Analysis of ZK Rollups – Taiko v.s others
As is widely known, the classic blockchain trilemma posits that among “decentralization,” “security,” and “scalability,” only two can be achieved. However, Taiko seeks to attain all three, with a particular focus on “decentralization,” which most chains often overlook.
In the renowned work titled “The Different Types of ZK-EVMs” by Vitalik, he thoroughly classified existing ZK-based projects into various types of ZK-EVMs, highlighting their key attributes and potential. In brief, the four categories are segmented into a quadrant with Compatibility and Performance, with type 1, to which Taiko belongs, offering seamless compatibility with Ethereum. Nonetheless, the drawback is the substantial time required for ZK proofs. However, Taiko addresses this concern by implementing a multi-proof system and zkSNARKs.
In the current market scenario, notable projects like zkSync, Polygon, and Scroll primarily fall into Type 2 and subsequent categories, while XY Finance has integrated significant ZK Rollups.
| Blockchain | Type | Daily TPS | TVL | 30 Day Tx Amount |
| Taiko | Type 1 | 4.82 TPS | $38.39 M | 1.42 M |
| Scroll | Type 2 | 3.28 TPS | $695.36 M | 2.18 m |
| Linea | Type 2 | 6.99 TPS | $1.25 B | 20.16 M |
| Polygon zkEVM | Type 3 | 0.20 TPS | $165.94 M | 577.86 K |
| zkSync Era | Type 4 | 5.96 TPS | $868.88 M | 21.13 M |
From the chart, it is clear that Taiko has its own comparative advantage, especially its Type 1 feature, which sets it apart from others. Currently, the TPS (Transactions Per Second) of Taiko is higher, indicating high demand, possibly due to the potential airdrop. Nevertheless, the TVL (Total Value Locked), which indicates credibility and security, is lower. This is excusable at the early stage. It is expected that the TVL will grow as the ecosystem develops and campaigns are launched.
Moreover, Vitalik, as a block proposer, proposed the first block on the Taiko mainnet on 25/5/2024 and left an encouraging message. According to on-chain data (in UTF-8 form), he stated, “I’m excited to see that Taiko is launching as a based rollup. Ethereum benefits from L2s taking a plurality of different approaches, and I appreciate them being among the first to go in this direction.” – Vitalik, May 2024. This proves that Taiko is indeed a pioneering L2 with solid and innovative technology once again this year.
Ecosystem on Taiko
From NFT enthusiasts to metaverse adventurers and traders alike, Taiko offers a range of dApps to suit every interest!
DEX – Henjin DEX
Henjin is a native DEX built on Taiko, with one of its core visions being to provide the ecosystem with a wide range of innovative features, enabling users to have an extremely high degree of flexibility and control over their own liquidity. Henjin V4 offers an array of customizable options, empowering tailored pools to meet users’ demands. This feature allows users to select and integrate the modules that best align with their specific requirements, ensuring a customized and secure trading experience.
Lending – Hana Finance
Hana Finance is a decentralized non-custodial liquidity market protocol built on Taiko, the Ethereum-equivalent L2 ZK-Rollup. Users can participate as liquidity suppliers or borrowers on Hana. Suppliers provide liquidity in available markets on Hana to earn passive interest, while borrowers can borrow liquidity in an over-collateralized manner.
NFT – ImaginAIry NFTs
ImaginAIryNFTs is an NFT platform leading the creation of AI-generated art as NFTs, believing that everyone should have the chance to express their creativity and transform their ideas into valuable digital assets. With ImaginAIryNFTs, users can employ an AI model to design a unique and personalized piece based on their inputs and mint it for a minimal fee of 0.001 ETH!
Perpetual DEX – KiloEx
KiloEx markets itself by delivering traders lightning-fast transactions, real-time monitoring of market activity, and a user-friendly trading experience, while offering liquidity providers risk-neutral positions and LP-friendly options. With KiloEx, users can relish a decentralized trading experience with full control of their funds and complete on-chain execution of trades.
Tool – ZNS Connect
ZNS Connect Name Service is a decentralized naming system built on multichain technology and has recently integrated with Taiko. With ZNS Connect, users can register a .🥁 domain by simply entering their desired domain name and choosing the registration period. Moreover, ZNS Connect offers many unique features such as adding cover images, providing main information, including social links, and more!
To delve deeper into the fast-growing ecosystem, go to the Taiko ecosystem and start your exploration today!
How to Bridge to Taiko?
XY Finance is a cross-chain bridge aggregator that operates on 20+ EVM chains, including Blast, Cronos, Linea, zkSync,Taiko and more. XY Finance boasts a user-focused approach that makes transferring tokens between different chains a lot easier and much more efficient. This provides users with the best options at the most affordable prices too.
Don’t waste your time! You can now bridge tokens to Taiko with this simple guide:
- Visit XY Finance and connect your Wallet.
- Select the network you want to transfer tokens from (Ethereum, Polygon, Arbitrum, Avalanche, Optimism + 18 others).
- Select the token you want to bridge from your network to Taiko and input the amount.
- Review and confirm the transaction. Your tokens will arrive in under 5 minutes.
(Encountering any problems while bridging? Check out our comprehensive tutorial.)
You’re all prepared! Hit the button and begin your exploration of the Taiko universe!
About XY Finance
XY Finance is a cross-chain interoperability protocol aggregating DEXs & Bridges. With the ultimate routing across multi-chains, borderless and seamless swapping is just one click away.
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