Hashed: Why do we invest in Taiko?

The original authors: Ryan Kim, Edward Tan, Dan Park

TechFlow compiled the original text.

Imagine in this world, the scalability of Ethereum is endless, the transaction speed is as fast as lightning, and user privacy is sacred and inviolable. This is not a distant dream, but a rapidly approaching reality, all thanks to Taiko.

As a major investor, we are pleased to support Taiko in their revolutionary journey within the Ethereum ecosystem, where their Type-1 ZK-VM technology is leading this transformation. Today, as they launch the mainnet, we are at the forefront of an unprecedented leap in technological innovation history.

Although there are challenges in integrating ZK with EVM, Taiko’s Type-1 ZK-VM technology, launched by CEO Daniel Wang in 2023, is a breakthrough. CTO Brecht Devos and CFO Terence Lam are also involved, and the experienced team has successfully launched multiple public testnets within a year, demonstrating impressive metrics.

The Taiko team brings rich experience from their background in Loopring, one of the earliest ZK rollups. This foundation has equipped them with the knowledge and skills needed to tackle the complex challenges of Ethereum scalability. The management team has been working together for over five years, which is very rare in this field, further solidifying their cohesion and effective innovative approach.

Taiko aims to increase the scalability of Ethereum by 1000 times, providing developers with a consistent UI and experience with EVM. This means that any L1 project compatible with EVM can seamlessly transition to L2 by simply copying and pasting its code into Taiko.

The uniqueness of the Taiko method lies in the decentralization of proposers and validators to prevent single point of failure. Taiko employs Based Rollup to achieve decentralization of the sorting process within the protocol. In this setup, Ethereum validators perform the sorting as Based Rollup allows for sorting on the underlying L1 chain. Furthermore, Taiko’s Based Contestable Rollup (BCR) allows AppChains to adopt updated, more efficient validity proofs without altering Taiko’s core protocol. Combined with Multi-Proof, this reduces potential vulnerabilities and smart contract errors in the protocol, making Taiko the only L2 to achieve this functionality.

These features have attracted over 100 DApps to join Taiko’s testnet. Taiko has established partnerships with EtherScan, USDC, Pyth, several DeFi protocols, and bridges. With Uniswap announcing the deployment of Uniswap V3 on the Taiko mainnet, we expect similar announcements from other major protocols once the mainnet is live. It is worth noting that Taiko has the largest Discord community in the entire encryption field, highlighting strong community engagement and support.

Taiko also has an extensive technical roadmap, including many promising technologies:

• Based “Booster” Rollup (BBR): Booster Rollup enhances the basic Rollup by providing native Ethereum L1 DApp extension. While maintaining the L1 ordering advantage, BBR enables atomic cross-Rollup transactions among all L2. After the launch of BCR on the mainnet, Taiko plans to upgrade to BBR or launch a separate BBR L2 as a significant milestone.
• Inception Layers: This involves using Taiko as L2 and L3 layers, enabling it to run multiple parallel L2 instances and deploy L3 on top of them. By leveraging the equivalence of Taiko and Ethereum, it can solve scalability limitations, allowing multiple Rollups to coexist. Through Inception Layers, this approach ensures extensive scalability while maintaining interoperability between different layers through Merkle proofs, thus preventing fragmentation.

Taiko has gained support from prominent figures in the Ethereum community, including Vitalik Buterin and Justin Drake. This endorsement highlights the credibility and potential of Taiko’s technology. With such a strong foundation and a clear vision, Taiko is poised to become a cornerstone of Ethereum’s scalability and innovative future. We are excited to be part of this journey.