Coin overview
TAIKO
Ended--
Last price (USDT)
151.90K
24h total (USDT)
233.88K
Total vol (USDT)
2024-05-23 09:00:00 ~ 2024-06-05 12:30:00
Trading time (UTC+0)
2024-06-06 04:00:00
Delivery time (UTC+0)
Resources
Introduction
Taiko is first and foremost a community — global, inclusive, and open to everyone. Together, we’re scaling Ethereum for the masses.
Understanding Based Rollups: PGA Challenges, Total Anarchy, and Potential Solutions
From ethresearch by DavideRezzoli Many thanks to @linoscope , @donnoh , @Brecht , @sui414 , @pascalst ,and @cshg for their valuable feedback and comments. How to Lose $200K every Two Weeks tl;dr In this post, we analyze the economics of based rollups using total anarchy 8 as a method of sequencing blocks. Focusing on the only live based rollup, Taiko, we highlight the inefficiencies of total anarchy. Specifically, we identify a critical inefficiency in L2 block building that resembles a priority gas auction (PGA), where competing proposers rush to include transactions before Taiko Labs’ proposer. This results in L2 blocks with redundant transactions being posted on-chain on L1, reducing the value of Taiko’s blocks and increasing its economic costs. As a result, Taiko Labs often incurs expenses to prove blocks with few or no profitable transactions. Through a two-week analysis of block data, we observe that the market is dominated by four major proposers (including Taiko Labs). Our findings indicate that Taiko Labs faces significant losses due to consistently losing the PGA. Over this period, Taiko Labs lost approximately 83.9 ETH, which, at an average Ethereum price of $3,112, translates to a total loss of roughly $261,096 in just two weeks. This underscores the urgent need for better proposer incentives and mechanisms to mitigate these inefficiencies. Introduction Based rollups aim to enhance Ethereum scalability by integrating L2 operations with L1 for improved data availability and security. They leverage L1 for sequencing and settlement, avoiding the need for centralized sequencers, which promotes decentralization. However, the total anarchy model used for sequencing in Taiko introduces significant inefficiencies. In this model, where block posting lacks hierarchy or coordination, any user can act as an L2 proposer and post blocks without restriction, promoting maximum permissionless participation. While this approach aligns with decentralization principles, it also introduces systemic challenges. Vitalik described total anarchy as: “Total anarchy: anyone can submit a batch at any time. This is the simplest approach, but it has some important drawbacks. Particularly, there is a risk that multiple participants will generate and attempt to submit batches in parallel, and only one of those batches can be successfully included. This leads to a large amount of wasted effort in generating proofs and/or wasted gas in publishing batches to chain.” These drawbacks materialize in Taiko, where multiple L2 blocks are submitted for the same L1 slot, resulting in redundant transactions. Redundant blocks consume valuable L1 space, inflate fees, and diminish economic efficiency. Inefficiency Caused by Redundant Transactions In rollups using total anarchy, redundant transactions occur when multiple L2 blocks containing the same transactions are published to L1. These blocks may be submitted within the same L1 slot or across different slots. In such cases, both blocks are submitted to L1, consuming valuable blob space and incurring L1 fees for the L2 proposer. The first block processed on L1 is executed to determine the updated L2 state. Any redundant transactions in the second block, already included in the first, are invalidated, as their state transitions have already been applied. Unique transactions in the second block remain valid and still affect the L2 state. The proposer of the second block faces significant economic inefficiencies. They incur the full cost of posting and proving the block but only earn rewards for valid, non-redundant transactions. This dynamic discourages proposers from submitting redundant blocks. Additionally, posting two blocks to the same L1 slot reduces the effective throughput of the network by occupying valuable block space with redundant data blobs, increasing congestion and costs. Taiko’s Architecture and the Economics of redundant Blocks Taiko exemplifies a based rollup using total anarchy as its sequencing design, prioritizing simplicity and decentralization. In this model, anyone can collect transactions from the L2 mempool, build a bundle (which becomes the L2 block when proposed by the L1 proposer), and submit it to L1 alongside data blobs containing transaction payloads. These blocks may include transactions or remain empty (containing only a single anchor transaction ) to ensure chain continuity during low-demand periods. After block submission, proposers must generate and post a validity proof to confirm the block’s correctness, which incurs additional L1 transaction costs. Simplified Overview of Taiko Architecture799×669 38.2 KB Even empty blocks must be proven to maintain the chain’s liveness and avoid slashing penalties. This requirement places a significant economic burden on fallback proposers like Taiko Labs during periods of low activity. When Taiko Labs includes profitable transactions, higher-bidding competitors often outpace it in the PGA environment, resulting in diminished rewards and economic challenges. Priority Gas Auction Dynamics in Taiko PGAs presents a recurring challenge in Taiko Labs’ operation. Competing searchers exploit Taiko Labs’ open block submission process by outbidding its proposer, using higher fees to ensure their block is executed first. Driven by economic incentives, these proposers monitor pending blocks and submit their own for the same L1 slot, offering higher transaction fees to secure inclusion. When multiple blocks overlap in content, the first valid block determines the network’s state. Redundant transactions between Taiko Labs’ block and an earlier block are excluded, forcing Taiko Labs to bear the cost of proposing and proving blocks without proportional rewards. This creates a situation where Taiko Labs incurs the full cost of sequencing blocks but receives minimal or no profit, further straining the network’s economic sustainability. These inefficiencies are especially pronounced during high-demand periods, when the PGA environment is most competitive. However, during low-demand periods, the Taiko Labs proposer is forced to maintain liveness by posting and proving blocks that may contain some transactions but are not full. While these blocks may offer some rewards, in most cases they cannot cover the L1 costs, making them unprofitable. As a result, PGAs not only redirect rewards to more sophisticated proposers but also undermine the incentives necessary to maintain the network’s liveness, placing a disproportionate economic burden on fallback proposers like Taiko Labs. Analysis Methodology For this analysis, we evaluate proposer profitability by comparing their earnings with the costs incurred. The block rewards from L2 blocks represent the earnings, while the L1 publication costs and proving costs are considered the losses. For Taiko Labs proposer, the base fee associated with each block is included in its earnings. Taiko Proposer Net Profit:(L2 Priority Fees + Base Fee)−(L1 Publication Costs + Proving Costs) Other Proposers Net Profit:L2 Priority Fees − (L1 Publication Costs + Proving Costs) The analysis is based on blocks created between November 7, 2024, and November 22, 2024, covering Block IDs 538304 to 593793. This represents 9.34% of all blocks on the Taiko chain since genesis at the time of writing. This dataset provides insights into the economic performance of proposers who processed more than 500 blocks during this period. Analysis of Proposer Rewards, Costs, and Profitability The graph below presents an overview of rewards, costs, and profits for major proposers, highlighting the economic dynamics within the system. Taiko Labs, as the primary fallback proposer, is used as the baseline for evaluating profitability. Proposer Profit Breakdown5952×2927 321 KB Key Observations Taiko Labs’ Proposer (0x000000633b68f5D8D3a86593ebB815b4663BCBe0)Net Profit: -83.9 ETH (approximately $261,096 at $3,112/ETH).Taiko Labs frequently incurs economic losses due to its fallback role in maintaining liveness and being outbid in the PGA environment by competitors, most notably Proposer A (0x41F2F55571f9e8e3Ba511Adc48879Bd67626A2b6) and Proposer B (0x66CC9a0EB519E9E1dE68F6cF0aa1AA1EFE3723d5). By offering higher fees and securing earlier blocks, these proposers reduce Taiko Labs’ ability to capture profitable transactions. The result is often blocks filled with only an anchor transaction, leaving Taiko Labs to incur the proving costs without receiving commensurate rewards. Net Profit: -83.9 ETH (approximately $261,096 at $3,112/ETH). Taiko Labs frequently incurs economic losses due to its fallback role in maintaining liveness and being outbid in the PGA environment by competitors, most notably Proposer A (0x41F2F55571f9e8e3Ba511Adc48879Bd67626A2b6) and Proposer B (0x66CC9a0EB519E9E1dE68F6cF0aa1AA1EFE3723d5). By offering higher fees and securing earlier blocks, these proposers reduce Taiko Labs’ ability to capture profitable transactions. The result is often blocks filled with only an anchor transaction, leaving Taiko Labs to incur the proving costs without receiving commensurate rewards. Most Profitable Proposer A (0x41F2F55571f9e8e3Ba511Adc48879Bd67626A2b6)Net Profit: 26.0 ETH (approximately $80,912 at $3,112/ETH).This proposer routinely outbids the Taiko Labs proposer, capturing the majority of profitable transactions by winning the PGA race and extracting more value. Net Profit: 26.0 ETH (approximately $80,912 at $3,112/ETH). This proposer routinely outbids the Taiko Labs proposer, capturing the majority of profitable transactions by winning the PGA race and extracting more value. Second most profitable Proposer B (0x66CC9a0EB519E9E1dE68F6cF0aa1AA1EFE3723d5)Net Profit: 17.5 ETH (approximately $54,460 at $3,112/ETH).This proposer also strategically outbids Taiko Labs, securing profitable transactions and achieving substantial net gains. While slightly less profitable than Proposer A, Proposer B still efficiently balances rewards and costs. Net Profit: 17.5 ETH (approximately $54,460 at $3,112/ETH). This proposer also strategically outbids Taiko Labs, securing profitable transactions and achieving substantial net gains. While slightly less profitable than Proposer A, Proposer B still efficiently balances rewards and costs. Third most profitable proposer C (0x9a5Cc6E3A3325CDc19fC76926CC9666c80139C09)Net Profit: 6.6 ETH (approximately $20.540 at $3,112/ETH).Although Proposer C posts a similar number of blocks as Proposer B, it earns only about half the profit. This discrepancy likely arises from less sophisticated bidding strategies, reducing overall profitability. Net Profit: 6.6 ETH (approximately $20.540 at $3,112/ETH). Although Proposer C posts a similar number of blocks as Proposer B, it earns only about half the profit. This discrepancy likely arises from less sophisticated bidding strategies, reducing overall profitability. Small-Scale ProposersSmaller-scale proposers exhibit lower overall activity. However, they often manage to remain profitable or near break even due to proportionally lower costs, benefiting from a more cautious approach within the PGA landscape. Smaller-scale proposers exhibit lower overall activity. However, they often manage to remain profitable or near break even due to proportionally lower costs, benefiting from a more cautious approach within the PGA landscape. Taiko Labs Proposer Outbid by Other Proposers In this section, we analyzed instances where the two top-earning proposers outbid Taiko Labs. This happens when a proposer submits a block faster than Taiko Labs and secures its execution on L1 first. Taiko Labs' outbid by Proposer A1920×1055 138 KB This graph illustrates each instance where Proposer A outpaced the Taiko proposer in posting a block. Y-Axis: Represents the reward associated with each block (sum of L2 transaction fees). X-Axis: Represents the size of the posted block. Timeframe: Over the two-week period analyzed, this occurred 4,621 times. In our analysis, we examined instances where blocks proposed by Proposer A were immediately followed by blocks proposed by Taiko Labs’ proposer. Profitability Comparison: Proposer A:In blue on the graph, we observe all 4,285 profitable blocks proposed (92.7% profitability), while the not profitable blocks are shown in ligthblue. In blue on the graph, we observe all 4,285 profitable blocks proposed (92.7% profitability), while the not profitable blocks are shown in ligthblue. Taiko Proposer:In red, the graph shows that the Taiko Labs proposer achieved only 103 profitable blocks (2.2% profitability with 4,518 blocks resulting in 97.8% of blocks being unprofitable), with the not profitable blocks shown in pink. In red, the graph shows that the Taiko Labs proposer achieved only 103 profitable blocks (2.2% profitability with 4,518 blocks resulting in 97.8% of blocks being unprofitable), with the not profitable blocks shown in pink. Economic Impact on Taiko:The total loss incurred by the Taiko Labs proposer, as a result of consistently being outbid by Proposer A, amounted to 18.37 ETH. The total loss incurred by the Taiko Labs proposer, as a result of consistently being outbid by Proposer A, amounted to 18.37 ETH. Taiko Labs' outbid by Proposer B1920×1064 139 KB Similarly, we analyzed cases where blocks proposed by Proposer B preceded those proposed by the Taiko Labs proposer. This occurred 4,870 times during the observation period. Profitability Comparison: Proposer B:Proposed 4,333 profitable blocks (89.0% profitability) in blue, with not profitable blocks shown in lightblue. Proposed 4,333 profitable blocks (89.0% profitability) in blue, with not profitable blocks shown in lightblue. Taiko Proposer:Achieved 132 profitable blocks (2.7% profitability with 4,738 blocks resulting in 97.3% of blocks being unprofitable) in red, with not profitable blocks in pink. Achieved 132 profitable blocks (2.7% profitability with 4,738 blocks resulting in 97.3% of blocks being unprofitable) in red, with not profitable blocks in pink. Economic Impact on Taiko:The total loss incurred by the Taiko Labs proposer in these cases was 18.25 ETH. The total loss incurred by the Taiko Labs proposer in these cases was 18.25 ETH. Transaction Distribution Analysis To further investigate proposer behavior, we analyzed the distribution of transactions per block using a Kernel Density Estimation (KDE) graph. This visualizes how proposers allocate transactions across blocks, highlighting differences in their strategies. Transactions Count KDE1920×1020 103 KB Key Observations Taiko Labs’ Behavior (0x000000633b68f5D8D3a86593ebB815b4663BCBe0):Low-Transaction Blocks (<100 Transactions): Approximately 24% (6,652 blocks) of Taiko Labs’ blocks fall into this category, with 99% resulting from being outbid in the PGA environment. When Taiko Labs’ blocks are outbid by competing proposers, overlapping transactions in subsequent blocks are invalidated, leaving only the anchor transaction in the final block.High-Transaction Blocks (>1500 Transactions): Around 24.1% of Taiko Labs’ blocks exceed this threshold, showing occasional success in capturing profitable opportunities.Taiko Labs’ fallback role and the penalties from redundant blocks lead to significant economic inefficiencies. Low-Transaction Blocks (<100 Transactions): Approximately 24% (6,652 blocks) of Taiko Labs’ blocks fall into this category, with 99% resulting from being outbid in the PGA environment. When Taiko Labs’ blocks are outbid by competing proposers, overlapping transactions in subsequent blocks are invalidated, leaving only the anchor transaction in the final block. High-Transaction Blocks (>1500 Transactions): Around 24.1% of Taiko Labs’ blocks exceed this threshold, showing occasional success in capturing profitable opportunities. Taiko Labs’ fallback role and the penalties from redundant blocks lead to significant economic inefficiencies. Profit-Focused Proposers:Proposers A and B focus almost exclusively on high-transaction blocks, with over 46–58% of their blocks exceeding 1500 transactions.Both proposers frequently outbid Taiko Labs by submitting blocks with higher transaction fees, diminishing Taiko Labs’ reward opportunities. Proposers A and B focus almost exclusively on high-transaction blocks, with over 46–58% of their blocks exceeding 1500 transactions. Both proposers frequently outbid Taiko Labs by submitting blocks with higher transaction fees, diminishing Taiko Labs’ reward opportunities. Analysis of Block Profitability by Major Proposers We continue our analysis by evaluating the number of profitable blocks proposed by each proposer and examining the distribution of these results in Taiko. Proposers profitability (1)4453×2317 266 KB This graph illustrates the profitability of blocks published by major proposers (processing more than 500 blocks) during the analyzed period. It categorizes blocks into two groups: profitable blocks (green) and unprofitable blocks (red), highlighting the proportion of each for individual proposers. Key Observations Taiko Proposer (0x000000633b68f5D8D3a86593ebB815b4663BCBe0)Profitable Blocks: 19.1%Unprofitable Blocks: 80.9%The majority of Taiko Labs’ blocks are unprofitable, reflecting its role in maintaining liveness, even if that requires posting unprofitable blocks. This outcome supports the hypothesis that Taiko Labs is consistently outbid in the PGA environment on profitable blocks, leaving it to act as a fallback proposer during periods of lower profitability. Profitable Blocks: 19.1% Unprofitable Blocks: 80.9% The majority of Taiko Labs’ blocks are unprofitable, reflecting its role in maintaining liveness, even if that requires posting unprofitable blocks. This outcome supports the hypothesis that Taiko Labs is consistently outbid in the PGA environment on profitable blocks, leaving it to act as a fallback proposer during periods of lower profitability. Proposer A (0x41F2F55571f9e8e3Ba511Adc48879Bd67626A2b6)Profitable Blocks: 93.4%Unprofitable Blocks: 6.6%This proposer maintains a highly efficient operation, focusing almost exclusively on profitable blocks, which suggests selective block proposal during high-demand periods. Profitable Blocks: 93.4% Unprofitable Blocks: 6.6% This proposer maintains a highly efficient operation, focusing almost exclusively on profitable blocks, which suggests selective block proposal during high-demand periods. Proposer B (0x66CC9a0EB519E9E1dE68F6cF0aa1AA1EFE3723d5)Profitable Blocks: 89.8%Unprofitable Blocks: 10.2%Another highly efficient proposer, demonstrating strong profitability, likely by focusing on full blocks. Profitable Blocks: 89.8% Unprofitable Blocks: 10.2% Another highly efficient proposer, demonstrating strong profitability, likely by focusing on full blocks. Mixed Strategy Proposer (0x9a5Cc6E3A3325CDc19fC76926CC9666c80139C09)Profitable Blocks: 69.8%Unprofitable Blocks: 30.2%This proposer might not be as sophisticated as the other proposers, occasionally posting unprofitable blocks. Profitable Blocks: 69.8% Unprofitable Blocks: 30.2% This proposer might not be as sophisticated as the other proposers, occasionally posting unprofitable blocks. Smaller Proposers (e.g., 0x2802E30d61d5ac0879c4F0c2825201a3D9C250Ef)Profitable Blocks: 96.8%Unprofitable Blocks: 3.2%This proposer began operations later in the analyzed period, starting at block 580181. Despite its smaller scale, it demonstrates a highly sophisticated strategy, focusing exclusively on profitable opportunities and avoiding unprofitable blocks entirely. This could indicate that it is one of the most advanced actors, strategically entering only when conditions are favorable. Profitable Blocks: 96.8% Unprofitable Blocks: 3.2% This proposer began operations later in the analyzed period, starting at block 580181. Despite its smaller scale, it demonstrates a highly sophisticated strategy, focusing exclusively on profitable opportunities and avoiding unprofitable blocks entirely. This could indicate that it is one of the most advanced actors, strategically entering only when conditions are favorable. Insights This analysis reveals how competing proposers, driven by their own economic interests, create challenges for Taiko Labs. A critical issue arises when Taiko Labs posts blocks on L1 with low-priority fees, enabling more sophisticated actors to outbid them in the PGA environment. Our findings indicate that over 80% of Taiko Labs’ posted blocks were unprofitable, and being outbid occurred in more than half of the blocks proposed by Taiko. This highlights the economic inefficiencies Taiko Labs faces as it strives to maintain network liveness in an environment where competing proposers exploit its fallback role. Possible Solutions Using total anarchy for sequencing requires guarantees of execution to prevent redundant transactions. This approach can be challenging because, from the L1 perspective, transactions are executing correctly. One potential solution is to add the L2 block ID field in the L2 block proposal function, causing the block proposal to revert if the target is missed due to competition from other proposers. While this still incurs a transaction cost for proposing, it avoids the expense of proving the block. Taiko Labs could potentially use revert protection to prevent conflicting blocks from getting on-chain. By doing this, they could avoid wasting transaction fees. However, it’s worth noting that revert protection introduces a trust assumption on the builder. Another problem might be when you have blocks with the same ID that don’t have redundant transactions. Another possible solution is execution preconfirmations . However, ensuring execution guarantees on the L2 side adds complexity to the preconfirmation process. Having a single preconfer can provide guarantees that they will not publish conflicting blocks for the same slot, as doing so could result in slashing penalties. This mechanism can significantly reduce redundant submissions and lower L1 fee wastage. However, it also introduces execution complexity, posing challenges that must be addressed to ensure efficient implementation. The solution that might be the easiest to implement involves the use of execution tickets. Execution Tickets 2 , or others leader election mechanisms like based preconfirmation, provide a deterministic system to elect a single block proposer per slot. This approach minimizes conflicts and redundancy by ensuring that only one proposer is responsible for block submission at any given time. Execution tickets have several advantages. By eliminating redundant block submissions, they reduce wasted resources and align proposer incentives with the system’s overall efficiency. However, implementing such a system introduces challenges to ensure fair and reliable leader election. Discussion and Conclusion While total anarchy encourages permissionless participation, it struggles to meet the efficiency demands of based rollups due to redundant blocks and the competitive PGA environment. Taiko serves as a compelling case study, illustrating the economic costs associated with inefficient block space utilization on L1. Potential solutions such as execution preconfirmations could address these inefficiencies but add system complexity. Alternatively, introducing a leader election mechanism could reduce redundant blocks by adding structure, though it might also introduce centralization risks. A balanced approach could retain permissionless participation while penalizing harmful behavior, aligning decentralization with practical efficiency. Future Work Profitability Analysis: Investigate whether Taiko Labs has ever been profitable or if competing proposers were consistently capturing the profits instead. Proof Costs: Evaluate the impact of off-chain proof generation costs on net profitability. Proposer Behavior: Study proposer strategies in detail. Initial decoding of a few L1 blobs revealed no instances of proposers directly copying Taiko Labs’ proposer blobs, but further analysis is needed to confirm patterns. Acknowledgments I would like to express my sincere gratitude to Flashbots 1 for awarding the grant that made this work possible and for supporting my ongoing research on this topic. I also extend my thanks to the PBS Foundation 1 for their initial support of this research. FAQ: How does Taiko Labs post blocks on L1? Currently, the Taiko proposer operates openly by observing the public L2 mempool and publishing their blocks on the L1 mempool. Since everything is done publicly, outpacing the Taiko Labs sequencer by submitting blocks faster is relatively straightforward, provided you can generate the proof for the blocks you publish or find a prover willing to generate the proof on your behalf. Data Collection? To collect data, we listened to events from the contract responsible for proving and proposing: 0x06a9Ab27c7e2255df1815E6CC0168d7755Feb19a. From these events, we extracted the Taiko block ID in which the L1 block was recorded and the L1 transaction hash. Using the transaction hash, it was straightforward to check the transaction fees associated with each transaction via RPCs. For L2 transaction fees and the L2 base fee, we used the L2 block ID and calculated the results based on the block reward. While this method might not be the fastest, acquiring data for Taiko has proven to be challenging and relatively slow. In future posts, we aim to find a faster way to collect data for all chains. Encrypted Mempool as a Solution? An encrypted mempool wouldn’t solve the problem, as blocks with redundant transactions would still occur. Over time, this could lead to a monopoly where the most competitive and sophisticated searcher consistently posts blocks faster than others. Are Proposer A and Proposer B Outbidding Each Other? We found only 57 occurrences where these two proposers published blocks in immediate succession, indicating that direct PGA-style competition between them is relatively rare. Proposer A published first in 31 instances, making all of those blocks 100% profitable for Proposer A but only 54.8% profitable for Proposer B. Conversely, Proposer B published before Proposer A in 26 instances, and in those cases, both proposers’ blocks were profitable 80.8% of the time. Further analysis will be conducted for other proposers in a subsequent post. How Can I Identify Blocks Impacted by Outbidding? You can view it by simply checking TaikoScan 1 . Often, when blocks are empty or contain fewer than 100 transactions, it suggests the proposer was outbid in the PGA environment. Even blocks with a higher number of transactions might have been affected; in such cases, comparing the block’s costs to its rewards is the only way to confirm. For a more in-depth analysis, decoding the blob is the most reliable approach. Was Taiko Labs ever profitable? To answer this question definitively, further analysis is needed. However, the intuition suggests that Taiko Labs becomes profitable under specific conditions. For other proposers, profitability occurs when L2 Priority Fees − (L1 Publication Costs + Proving Costs) > 0. If this condition is not met, they avoid publishing blocks that would result in a loss.In contrast, the Taiko Labs proposer earns an additional Base Fee, making its profitability condition:(L2 Priority Fees + Base Fee) − (L1 Publication Costs + Proving Costs) > 0When this condition holds, Taiko Labs is profitable, as the Base Fee offsets the publication and proving costs that would otherwise make the block unprofitable for other proposers.
Taiko: The mainnet was down for 30 minutes today due to an ABI issue and has been restored
Taiko stated in a post at X time: "During a contract upgrade process aimed at optimizing ZK verification and increasing coverage, Taiko's main network went down for 30 minutes due to an ABI issue. The issue has now been resolved, and the network is operating normally, with measures being taken to prevent similar incidents from happening again."
Understanding the debate around based rollups
Ethereum loves rollups. As of late, “based” rollups are in vogue. What makes based rollups special? Its sequencer. Layer-2s today use a trusted centralized sequencer to order users’ transactions before they are posted down to the layer-1 for settlement, but based rollups defer those execution duties to Ethereum layer-1 validators. This is otherwise known as “based sequencing.” There are two primary reasons this is preferable: censorship resistance and interoperability. Using the layer-1 as a sequencer ensures the same liveness guarantees as Ethereum layer-1 blocks, and avoids the major complaints of potential censorship surrounding trusted centralized sequencers. Read more: MagicBlock open sources a16z-backed ‘ephemeral rollup’ tech The second advantage of based rollups is better interoperability. Based rollup proponents such as Justin Drake have in recent months touted this benefit as “ synchronous composability ,” where transactions in Ethereum are sequenced (or bridged) across different layer-2s at the same time. Simply put, smart contracts on based rollups will be able to call any other contract on the layer-1 in near-instant finality within the same block — as if they were all on the same chain. This composability and “money legos” is not exactly new; it was always one of the core properties sold with the original vision of Ethereum. Read more: Rethinking Ethereum consensus with Beam Chain Newsletter Subscribe to Blockworks Daily Subscribe But the fragmented state of rollups today means an Arbitrum transaction is asynchronous with an Optimism transaction, which creates problems of fee uncertainty. Fee uncertainty arises because gas fees are calculated in different slot times, as opposed to within the same 12-second slot time of one Ethereum block. In addition to making Ethereum seamlessly interoperable again, there are also different kinds of significant cost savings, Ahmad Mazen Bitar, technical product lead at Nethermind and Ethereum ACD developer, explains. “A user may want to swap his token on the [layer-1] but wants to take advantage of a deep liquidity pool on a [layer-2]. With synchronous composability, they would be able to push a singular transaction from the [layer-1] to the [layer-2], execute it, then bring it back to the [layer-1].” The first and largest existing based rollup in live production today is Taiko, which recently saw a burst in TVL and daily transactions this month. Source: DefiLlama Other early based rollups are also in early production, such as Surge by the Nethermind team, and UniFi by the Puffer Finance team. Both are forks of Taiko. Based rollups don’t come without its own drawbacks, however. Since execution (i.e. sequencing duties) is now being relegated back to layer-1 block validators, that means based rollups are constrained by the layer-1’s 12-second block time. Hence, the purported benefits of based rollups, like synchronous composability, may be easier said than done. Based rollups would require real-time proving within the latency of one 12-second slot, without which based rollups cannot execute composable transactions speedily. To have that kind of fast proof generation in turn brings another technological dependency into the mix, but Brecht Devos, co-founder and chief technology officer of Taiko, remains confident the tech is catching up. It’s why Taiko recently enabled two zk proofs on its rollup by Risc Zero and Succinct Labs, on top of Intel’s SGX trusted execution environment (TEE). This made it the first multi-proof based rollup in production without reliance on one trusted party. “Provers are improving quickly with more TEEs, faster and cheaper zkVMs and AVSs that can be used. We think the zk development is going very well and the sub-slot latency for proving is not far off,” Devos told Blockworks. One other believed disadvantage of based rollups is a loss of MEV as a key “revenue” stream, due to the lack of a centralized sequencer. Yet there are nifty workarounds available, Devos said. On Taiko, “MEV can also be captured by auctioning “execution tickets” to layer-1 block proposers,” Devos told Blockworks. As such, while based rollups by default give up sequencing rights to layer-1 validators, it doesn’t necessarily have to be the case. Matthew Edelen, co-founder of Spire Labs, a based rollup infrastructure provider, shares a similar view. As he explained on a recent Bell Curve podcast: “Auctions don’t have to be the only way to distribute sequencing rights. You could distribute 99% of sequencing rights through an auction and give the last 1% to friends or solo stakers to look good on L2Beat.” Finally, MEV may not even be such a big deal in the long run. This idea centres on a simple cost benefit analysis: Today, the bulk of blockchain revenues are coming from congestion fees, dwarfing a far smaller share of MEV revenues that is diminishing over time due to better MEV solutions. As such, the smarter rollup revenue model for rollups is one that banks on the greater network effects of congestion fees coming from synchronous composability, rather than MEV fees. As Justin Drake explained on the The Rollup podcast: “Congestion fees against contention fees is roughly at an 80:20 ratio today. 80% of the income on the [layer-1] comes from congestion fees — about 3200 eth per day since EIP-1559. MEV is about 800 ETH daily since the Merge. My thesis is that this ratio is becoming more extreme, going from 80:20 to something like 99:1.” In conclusion, the benefits of based rollups bring the user experience of Ethereum back full circle. There’s a sense of irony here, considering that these benefits were what blockchains already had from day one. Synchronous composability and layer-1 sequencing transactions have been the norm for all blockchains since the Bitcoin network’s genesis. This deviation of execution layer duties only happened due to the rollup-centric roadmap (or the multichain path in Polkadot, Cosmos and Avalanche) as of the last few years. Based rollups are ready to run it back. Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter . Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter . 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Aligned: Airdrop to major L2 token holders with a threshold of $50
On December 17th, according to the official website, Aligned Foundation will distribute a significant portion of ALIGN tokens to token holders of Mina, EigenLayer, and Ethereum zk L2s, especially those who continued to hold during the market downturn. Registration will end on December 23rd, 2024. The specific eligibility requirements are that the wallet address must hold at least $50 worth of the above tokens at their historical lowest price for the following projects: Mina (MINA), Starknet (STRK), Polygon (POL), EigenLayer (EIGEN), ZKsync (ZK), Scroll (SCROLL), and Taiko (TKO).
Blockworks Research: As Ethereum recovers, what opportunities and challenges will Based Rollup bring?
Original author: Donovan Choy Original translation: TechFlow Ethereum loves Rollup. Recently, "based" Rollup has attracted much attention. What is special about based Rollup? The core lies in its sequencer. Traditional Layer-2 uses a centralized sequencer to process user transactions and submit them to Layer-1 for settlement, while based Rollup entrusts the sequencing task to the validators of Ethereum Layer-1. This mechanism is called "based sequencing". This design has two major advantages: anti-censorship and enhanced interoperability. By letting Layer-1 act as a sorter, Rollup based on Ethereum can provide the same liveness guarantees as the Ethereum mainnet while avoiding the censorship issues that may arise from a centralized sorter. Read more: MagicBlock Open Sources a16z-supported "Short-lived Rollup" technology Another important advantage is a significant increase in interoperability. Based Rollup supporters (such as Justin Drake) call it "synchronous composability", that is, transactions on Ethereum can be synchronously ordered or bridged between different Layer-2. In simple terms, smart contracts on based Rollup can call other contracts on Layer-1 almost instantly in the same block, just as if they were on the same chain. This idea of synchronicity and “money legos” is not new; it has always been an important part of Ethereum’s original vision. Read more: Rethinking Ethereum Consensus with Beam Chain However, the current decentralized state of Rollups causes transactions between Arbitrum and Optimism to be asynchronous, which introduces fee uncertainty. This uncertainty is further exacerbated by the fact that gas fees are calculated at different points in time, rather than uniformly within the 12-second time slot of an Ethereum block. In addition to making Ethereum more interoperable, this mechanism also brings significant cost savings. Ahmad Mazen Bitar, technical lead at Nethermind, explained: “Users can initiate a transaction on Layer-1, use the deep liquidity pool of Layer-2 to complete the operation, and then return to Layer-1. This synchronous composability makes the whole process more efficient.” Currently, the largest based Rollup is Taiko, which has seen significant growth in both TVL and daily transaction volume this month. Source: DefiLlama Other early based Rollup projects are also under development, such as the Nethermind team's Surge and the Puffer Finance team's UniFi. These projects are all based on the Taiko fork. Nevertheless, based Rollup also faces some challenges. Since the sorting task is handed over to the Layer-1 validator, its performance is limited by the 12-second block time of Layer-1. Therefore, the advantages of based Rollup, such as synchronous composability, may be difficult to fully realize in practice. It requires real-time zero-knowledge proofs to be completed within a 12-second time slot, otherwise composable transactions cannot be executed quickly. To this end, Taiko introduced a variety of technologies, including zk proofs from Risc Zero and Succinct Labs, and a trusted execution environment (TEE) based on Intel SGX. This makes Taiko the first based Rollup to implement multiple proofs in a production environment without relying on a single trusted party. “The performance of provers is improving rapidly. We see more trusted execution environments (TEEs), more efficient and lower-cost zero-knowledge virtual machines (zkVMs), and verifiable state machines (AVSs) being introduced for use. We believe that zk technology is progressing very smoothly, and the goal of generating proofs within sub-time slot delays is not far away,” said Brecht Devos, co-founder of Taiko, in an interview with Blockworks. However, blockchain-based Rollup also faces some challenges. For example, due to the lack of a centralized sorter, an important source of income, MEV (maximum extractable value), may be lost. However, Devos said that this problem can be solved in some innovative ways. In the Taiko network, “MEV can be captured by auctioning ‘execution tickets’ to Layer-1 block proposers,” Devos explained to Blockworks. So while based Rollups give sorting rights to Layer-1 validators by default, this is not the only solution. Matthew Edelen, co-founder of Spire Labs, a company focused on Rollup infrastructure, shared a similar sentiment in a recent Bell Curve podcast: "Auctions are not the only way to allocate sorting rights. We can allocate 99% of sorting rights through auctions, while allocating the remaining 1% to friends or independent stakers to present a better image on L2Beat." In the long run, MEV (maximum extractable value) may not be a major problem. This view stems from a simple cost-benefit analysis: currently, most of the blockchain's revenue comes from congestion fees, which far exceeds MEV revenue. Moreover, as more efficient MEV solutions continue to emerge, the proportion of MEV revenue is gradually decreasing. Therefore, for Rollup, a better revenue model is to rely on the network effects brought by synchronous composability and benefit from congestion fees rather than relying on MEV charges. As Justin Drake said in The Rollup podcast: “Right now, the ratio of congestion fees to contention fees is about 80:20. Of the revenue on Ethereum mainnet (Layer-1), 80% comes from congestion fees - about 3,200 ETH per day since the implementation of EIP-1559. Since the merger, MEV revenue has been about 800 ETH per day. I think this ratio will become more disparate, perhaps from 80:20 to 99:1.” To sum up, the advantages of Based Rollup bring Ethereum’s user experience back to its original state. Interestingly, this return is actually reminiscent of the characteristics that blockchain has had since its inception. Synchronous composability and transaction ordering capabilities at the Layer-1 level have been core features of blockchains since the birth of the Bitcoin network. This divergence of execution layer responsibilities is largely due to the centralized development path of Rollups in recent years (as well as the multi-chain architectures of Polkadot, Cosmos, and Avalanche). Today, Rollup-based solutions are ready to recapture this original intention. 「 Original source」
Top 10 Airdrops For The Second Week of December
Crypto airdrops farmers have ten valuable opportunities to receive free cryptocurrency tokens from projects backed by renowned investors. These airdrops distribute free tokens to attract new users and expand communities. For crypto enthusiasts, the following airdrops present a chance to earn new tokens and engage with emerging projects. Movement Network Movement secured $41.40 million in a funding round co-led by Polychain Capital, Borderless Capital, Blizzard Fund, and dao5, with additional participation from Binance Labs. While the MOVE network currently has no active tasks, users can claim their MoveDrop by connecting their EVM wallet used during registration. This initiative highlights the growing trend of incentivized participation in decentralized ecosystems. “Someone farmed 36 wallets for Movement & got 90,000+. MOVE airdrop currently worth around $66,000,” said Tobi, an airdrop farmer. MOVE airdrop was launched earlier today, on December 9, on Binance’s airdrop portal. The token also secured listings on South Korean exchanges Upbit and Bithumb. Nexus Labs Nexus Labs aims to create a “Verifiable Internet” by leveraging the computing power of connected devices. After raising $27.20 million in a funding round co-led by Pantera Capital, DragonFly Capital, and Lightspeed Ventures, the network launched its testnet on December 9, lasting only four days. Participants simply need to keep a browser tab open to share their internet speed, making it an accessible yet time-sensitive opportunity. Vana Vana raised $25 million in a round co-led by Coinbase Ventures, Polychain Capital, and Paradigm. Users can participate in its confirmed airdrop by running a node on a test network. With system requirements of 1 CPU, 8GB RAM, and 10GB of storage, Vana is targeting tech-savvy participants. The project also announced the closure of its Telegram app on December 9, urging users to connect their wallets to preserve earned points. “On Monday, December 9, at 9:00 am Pacific, we’ll be launching a new Nexus network testnet. The goal is to enable the Verifiable Internet. Watch our latest video to learn more about what we are building,” Vana said. SynFutures SynFutures, a decentralized exchange (DEX) for derivatives, completed a $36 million funding round co-led by Polychain Capital, Pantera Capital, and HashKey Capital. The launch of its governance token, F, on December 6 marked a significant milestone, offering fee discounts, rewards, and governance rights to holders. BeInCrypto also reported plans to list the token on Bybit and Gate.io. “The SynFutures Foundation will oversee growth, manage proposals, and collaborate with partners,” the team stated in a recent announcement. Wormhole Wormhole, a cross-chain bridge protocol, secured $225 million in funding with participation from Coinbase Ventures and Multicoin Capital. The project’s confirmed airdrop reflects its commitment to decentralization and community engagement. Meanwhile, token holders are rewarded for staking their W holdings. “A minimum of 50,000,000 W is allocated for Reward Period 1 of the Wormhole Staking Rewards Program (SRP), currently active for all W holders on Solana, Arbitrum, Base, Optimism, and Ethereum,” Wormhole said. XION XION raised $36 million in a fundraiser supported by HashKey Capital, The Spartan Group, and Multicoin Capital. The project’s airdrop targets early adopters and contributors who played a vital role in its community development. Through this initiative, XION emphasizes rewarding loyalty and ecosystem engagement. “You may be deemed a believer for the XION airdrop if you: Played a key role in the XION community’s growth, believing in the project from the beginning. Believed in and actively engaged with apps on the XION testnet. Earned special recognition from official XION community activities. Believed in something, across a wide variety of ecosystem partners,” one community member shared. Taiko Taiko, a Layer 2 scaling solution for Ethereum, raised $37 million in a funding round co-led by Hashed Fund, Lightspeed Ventures, and Hongshan. With its airdrop confirmed on December 5, Taiko aims to enhance decentralization by distributing tokens to early users and contributors. “Taiko, a Layer 2 scaling solution on Ethereum, is giving out free tokens through their airdrop,” an official medium post read. The Taiko airdrop rewards early users, developers, and community members. By joining, you can get free tokens and be part of Taiko’s future. With the Taiko airdrop, the project shares its tokens with the community. Magic Eden Magic Eden, a leading NFT platform, raised $159.50 million in a round led by Paradigm, with Coinbase Ventures and Sequoia Capital participating. The ME token, central to its ecosystem, is set for its airdrop on December 10. Pre-market trading suggests a value of $3-$4 per token, making it a potentially lucrative opportunity for participants. “The ME token is currently trading in pre-markets at $3-4 USD per ME. Pre-markets should always be treated with caution, but give an initial indication of where the value might be heading,” said Azuki researcher wale.moca. Jupiter Jupiter announced a confirmed $860 million airdrop following a $137.50 million fundraiser. Known as “Jupuary,” this initiative will reward protocol users while filtering out opportunistic participants. Eligibility checks begin this month, with the airdrop scheduled for January. “Jupuary is on. Jupiter DAO Passes Massive $860M ‘Jupuary’ Airdrop Vote. A snapshot of eligibility was taken in November. A link to check eligibility will be available later in the month, while the actual airdrop is scheduled for the following month,” said Marty Party, a popular user on X. StarkNet StarkNet, a Layer 2 solution on Ethereum, raised $282.50 million in a funding round co-led by Pantera Capital, Paradigm, and Sequoia Capital. While the project has not confirmed an airdrop date, ecosystem updates and integrations suggest exciting developments on the horizon. “More integrations, better accessibility, and an ecosystem that never stops shipping… Another great week on Starknet, packed with tons of updates (and a new airdrop to claim,” said Brother Staknet Digger. Overall, these crypto airdrops reflect significant developments within the blockchain space fueled by capital injections and community-driven incentives. From confirmed airdrops to novel testnets, these projects highlight the potential for a decentralized future of finance, computing, and internet connectivity. As these projects progress, early adopters have the opportunity to shape and benefit from this growing ecosystem actively.
DeFi infrastructure provider SuperFi Labs completes $2.5 million Pre-A financing
According to official news, DeFi infrastructure provider SuperFi Labs has announced the completion of a $2.5 million Pre-A financing round, led by Linklogis with participation from SNZ, Taiko and ByteTrade. Previously, seed funding was provided by Generative Ventures. The new capital will be used for technical talent recruitment, protocol development and market expansion, with a focus on launching more RWA products and enhancing existing DeFi solutions. SuperFi Labs is described as a DeFi innovation lab that aims to attract more users to decentralized finance by offering real-world asset (RWA) products and DeFi solutions on the fund side. Its projects include Sake Finance liquidity protocol on Soneium and AgentFi platform utilizing smart chain proxies. In addition, SuperFi is collaborating with Linklogis to develop an RWA platform to enhance channels for decentralized supply chain finance.
Curve Finance Launches Curve-Lite Decentralized Exchange Powered by Taiko
Curve Finance has unveiled Curve-Lite, a version of the decentralized exchange that uses Taiko L2 scaling solution for Ethereum. According to the announcement, the launch aims to improve the accessibility of DeFi by reducing transaction costs and improving security. Built on Taiko’s zk Rollup technology, Curve-Lite offers lower gas fees compared to the Ethereum mainnet. The reduced costs are expected to encourage participation from a wider user base, including retail investors, and facilitate the provision of liquidity. Curve notes that the platform inherits Ethereum’s strong security system, providing a decentralized and permissionless environment. As a zk-EVM, Taiko allows developers to develop Ethereum-compatible decentralized applications (dApps) without the need for modifications. The collaboration with Curve demonstrates the growing adoption of L2 solutions to solve Ethereum’s scalability issues. By leveraging Taiko’s L2 capabilities, the Curve team claims that Curve-Lite is poised to attract a diverse range of participants, facilitating greater adoption of decentralized financial services. Image: freepik Designed by Freepik
Let Ethereum Shine Again: An Ethereum-based Rollup Analysis
Original Source Ethereum has successfully alleviated mainnet congestion and high gas fees through a rollup-centric Layer-2 roadmap, but this has also led to ecosystem fragmentation. L2 solutions designed to scale the network have now become isolated islands, each with its own rules, systems, and barriers. Liquidity is isolated, users are trapped in bridging between L2s, and developers must choose whether to build on Base, Arbitrum, or Starknet. However, over the past year or so, the community has increasingly discussed Ethereum-based rollups as a potential answer to this issue. It is rumored that Ethereum-based rollups will restore interoperability and composability, reviving the DeFi summer concept of "Money Legos" on L2 (referring to DeFi protocols seamlessly interacting). In short, if Ethereum-based rollups deliver on all their promised features, they will make the Ethereum ecosystem feel like Ethereum again. The core issue Ethereum-based rollups aim to address is the use of independent sequencers on L2 — sequencers being the engine on the blockchain that orders transactions. "When I first read about the L2 scaling roadmap from Vitalik [Buterin]'s blog post, I was hesitant as it brought trade-offs," blockchain engineer Teddy Knox told the Magazine. "Unlike L1, early iterations of L2 had centralized sequencers with special permissions to order L2 blocks, whereas L1 has a very large node committee to validate Ethereum." Ethereum's Surge Roadmap to Achieve 100,000 TPS ( Vitalik Buterin) Centralized Sequencers Have Fragmented Ethereum’s L2 While centralized sequencers are very fast and have made their operators a good amount of money, they have also led to the isolation of different L2s. Transactions processed by a sequencer of a certain L2 cannot easily interact with other L2s, and this lack of interoperability has been a major factor of FUD on this year's Ethereum roadmap. (Interoperability between L2s can still be achieved without a shared sequencer through other means, but it would be "asynchronous," meaning non-real-time.) Ethereum-based rollup (distinct from Coinbase's L2 Base), proposed by Ethereum researcher Justin Drake suggests, aims to address this fragmentation issue. In contrast to traditional rollups, Ethereum-based rollup pushes transaction ordering back to Ethereum's L1, a situation that existed before the advent of L2s. "The Ethereum-based sequencing approach not only leverages Ethereum's security but also contributes to the alignment of its revenue and ecosystem, ensuring deep alignment with the Ethereum mainnet, driving cheaper and faster transactions, supporting the network's sustainability directly," said Daniel Wang, co-founder of Taiko Labs. Taiko is the first project to adopt Ethereum-based rollup and put it into production. The revenue Taiko brings back to Ethereum is roughly five times that of other rollups with centralized sequencers ( Justin Drake) Composability and Ethereum-Based Rollup This sounds very promising, but like anything else, there are also a series of issues. In order for users to enjoy the benefits of Ethereum-based rollups, other L2s must also adopt them. In Taiko's case, they have partnered with Nethermind's Surge rollup chain, specially designed to allow users to bridge between Taiko without going through Ethereum. However, despite being based on the same technology, these two rollups still cannot synchronize, Wang told Cointelegraph at Devcon. “You need near real-time validity proofs to prove that changes on both sides happen at the same time,” he said. “I don’t think we are there yet, and as a project, we can’t wait until we get there to launch.” Pros and Cons of Centralized Sequencers When operated by a single entity or small group, sequencers can order transactions without decentralized consensus or Ethereum's 12-second block time delay. The blockchain trilemma illustrates the challenge of simultaneously optimizing decentralization, scalability, and security. For many L2 networks, sacrificing decentralization is worth it as it provides throughput that Ethereum L1 cannot match, although it comes with risks. “If sequencers have to go down... performance will be affected, or they may successfully front-run your transaction unless there are other features,” Knox explained. Using centralized sequencers brings back many of the issues decentralization and blockchain aim to solve, such as censorship and single points of failure—and the exploitation of maximum extractable value (MEV) is a big concern. But while these issues might only concern Ethereum idealists, a major concern for the average user is switching between L2s. The smart contract engineer for 0x, Duncan Townsend, has stated that the current process of moving funds from one Ethereum L2 to another is "not a great experience." "Unless you're using a chain abstraction protocol, the cross-chain user experience in DeFi is pretty terrible," he explained. "If you have composability, you have a foundation. Where your tokens are doesn't matter; you can get them on any chain you need, on demand, for a cheap price." If rollups share this order-based framework, tokens and assets should be able to interact directly with each other without relying on separate bridging mechanisms, achieving native interoperability between rollups. Adopting a Rollup-Based Approach By leveraging Ethereum's validator network to order transactions across multiple L2s, creating a more unified, efficient ecosystem, rollup-based approaches restore decentralized transaction ordering. Developers can build dapps that run across all participating L2s. As of November 20, Ethereum has over 1 million validators ( Dune Analytics) However, convincing existing L2s to give up Sequencer revenue is not easy. "There's a major hurdle in transitioning to a sequencer-based approach, and that's all these L2 sequencers making a ton of money," Townsend said. ETH Sequencer Revenue for Some Top Ethereum L2 Networks According to Dune Analytics data, as of November 20, ZK rollup ZKsync has earned nearly 40,500 ETH (1.255 billion USD) in cumulative sequencer fees. Optimistic rollup competitor Base has earned 20,904 ETH (64.70 million USD), Arbitrum has earned 62,001 ETH (192 million USD), and Optimism has earned 6,916 ETH (21.50 million USD). Are they really willing to give up this income out of idealism? The Benefits of Ethereum-Based Rollup for Ethereum While Wang is indeed an idealist, he argues that Ethereum-based rollup helps strengthen the security of the Ethereum mainnet as L2 activity reduces L1 activity, thereby reducing validator income. "Ethereum-based rollup does provide L1 validators with additional fees, tips, and MEV opportunities, which will incentivize more validators to secure the Ethereum chain. Ultimately, this will make all Ethereum-based rollups more secure," said Taiko's Wang. According to Growthepie data, Taiko is the rollup that has paid the most fees to the Ethereum chain in the last 30 days, paying $1.29 million in gas fees before November 21, almost five times that of the second-ranked Arbitrum One. Taiko is a rent payer in Ethereum's rollup ( Growthepie) This makes validators more profitable and encourages staking, reducing the circulating ETH supply, which may be beneficial for the price in the long term. The Future of Ethereum: Rollup-Based or Fragmented? Rollup provides a potential solution for a unified Ethereum ecosystem, but returning to the main chain for settlement also brings back old issues. Wang said the key trade-off with rollups is that they are constrained by Ethereum's current 12-second block time. Arbitrum operates in less than 1 second. "We are working with partners to enable (transaction) preconfirmation that will no longer rely on the shorter L1 block time to provide users with the best transaction experience. Users will almost instantly see their transactions included in a block," Wang said. If there is no proposal for enhanced interoperability (such as based on rollup), the Ethereum network will inevitably remain fragmented, while DeFi challengers like Solana continue to stride forward as a unified layer-1, providing users with a more seamless experience. Solana to Reenter DeFi Space in 2024 “Fundamentally, this is ‘how big can we make a single chain or a single rollup in terms of transaction throughput, and how fast can we settle so that when liquidity needs to move from A to B?’ It can get there very quickly, and users don’t have to wait,” Knox said. Successful adoption requires embracing rollup-based, but not everyone is convinced ( Charlie Noyes) Townsend indicated that rollup-based solutions are “definitely” the answer for a unified ecosystem, but it is still a novel concept, and there is currently not an active ecosystem. “You have to convince these L2 sequencers to give up some revenue stream, to join this interoperable ecosystem, and that’s a hurdle,” Townsend said.
Using Taiko as an Example to Explain the Preconfirmation Concept: How to Make Ethereum Transactions More Efficient?
Original Article Title: 「Preconfirmation (feat. Taiko): Make Ethereum Fast for the First Time!」 Original Article Author: Ingeun Kim : : FP This article starts from the limitations of the current L2 ecosystem and, through a specific analysis of projects like Taiko, demonstrates how the innovative concept of Preconfirmation optimizes the transaction confirmation process to improve user experience. It also reveals the challenges that the current Preconfirmation technology still needs to overcome in its development, including the dual challenge of technical refinement and ecosystem sustainability. Key Insights Taiko is a Layer2 network based on Based Rollup, aiming to achieve full interoperability with Ethereum while advancing the decentralization of the Sequencer. To address the latency issue in the Rollup mechanism regarding final transaction confirmation, Taiko introduces the concept of "Preconfirmation." By proactively assuring users of transaction inclusion and order, Preconfirmation effectively alleviates the inefficiencies in the transaction confirmation process of Rollup, significantly enhancing user experience. In the Based Preconfirmation model, L1 validators provide users with a guarantee of transaction outcomes. Preconfirmers need to stake collateral and adhere to a Slashing mechanism to ensure system reliability. L2 projects like Taiko establish reliable transaction finality by introducing the Preconfirmation mechanism, creating a more convenient operational environment for services like DeFi that require real-time confirmation. Currently, multiple projects are involved in the development of the Preconfirmation ecosystem. This technological advancement is expected to enhance the efficiency of the Ethereum L2 ecosystem, strengthen interoperability with Ethereum, and drive further expansion of the entire ecosystem. Taiko is steadily progressing toward its ultimate goal as an Ethereum Layer2 solution. To achieve this goal, Taiko prioritizes full interoperability with Ethereum, a decentralized Sequencer, and support for developers. It is worth noting that through the architecture of Based Rollup, Taiko has achieved full interoperability with Ethereum while allowing anyone to participate as a Sequencer, thus decentralizing the Sequencer. However, despite the advantages of the Based Rollup model, it still faces some inherent inefficiencies in its structure. This article will take Taiko as an example to delve into the concept of Preconfirmation. As a key part of the Layer2 technology stack, Preconfirmation is an important step in the further development of Rollup. Current L2 Efficiency Issue With the expansion of the L2 ecosystem, numerous projects have emerged, bringing many new concepts and technology stacks. However, despite these significant advances, L2 still faces some efficiency issues that need to be urgently addressed, especially in key areas affecting user experience, making efficiency enhancement particularly important. Rollup's Inherent Limitation: Inefficient Transaction Finality Confirmation Process L2 has achieved scalability through Rollup, relying on the data availability and transaction processing of L1 platforms such as Ethereum. However, Rollup has an inherent limitation: although it can independently perform transaction ordering and execution, all other processes still need to wait for L1's final confirmation. This architecture ensures security and data immutability by directly leveraging L1's block generation and data availability. However, relying on L1 for final confirmation results in slow transaction processing speed, limited real-time confirmation capabilities, and from a user's perspective, it is difficult to meet real-time needs. Furthermore, many L2 sequencers and validator nodes are currently centralized. This centralization leads to inefficiencies, such as longer transaction confirmation times and potential operational interruptions, affecting the transaction processing efficiency of some Rollups, causing confirmation delays. Introduction of the Preconfirmation Concept The introduction of the Preconfirmation concept aims to address the inefficiency of transaction final confirmation in the L2 network. Preconfirmation allows users to receive transaction confirmations more quickly, thus alleviating the common delays and inefficiencies in the Rollup mechanism. What Issues Does Preconfirmation Aim to Solve? In the Rollup mechanism, there is always an efficiency issue with the confirmation process after users submit transactions to L2. As centralized L2 sequencers cannot accurately guarantee when transactions will be confirmed on L1, users are often uncertain about the order and outcome of transactions. For example, users may need to wait a long time for transactions to be included on L1, and if the transaction order is incorrect or the result is not ideal, it may lead to financial losses from executed transactions. In a highly volatile market environment, the issues of delay and transaction reordering become more prominent as users rely on arbitrage and DeFi services. In these circumstances, transaction delays or reordering can directly result in missed opportunities. Even regular users conducting transactions may lack confidence in the finality and order of transactions on L1, leading to doubts about the reliability and usability of the blockchain. Therefore, the design goal of preconfirmation is to address these shortcomings, particularly providing a more convenient and reliable transaction experience for users most impacted by Rollup inefficiencies. How does Preconfirmation address these issues? Preconfirmation resolves these issues by providing users with transaction inclusivity, ordering, and execution guarantees. It offers users 'soft confirms' through a centralized L2 sequencer, issuing preconfirmation certificates to ensure transactions will ultimately be included on L1. The primary advantage of soft confirms is the enhancement of user experience. Users receive a confirmation certificate immediately after submitting a transaction, ensuring the transaction is included on L1 in the expected order, reducing uncertainties, especially in fast-paced trades like arbitrage. Furthermore, preconfirmation enhances user trust in the L2 system. As user confidence in secure transaction processing grows, overall L2 ecosystem adoption rates increase. Thus, preconfirmation plays a crucial role in improving Rollup efficiency and convenience. Is Preconfirmation the ultimate solution? While soft confirms from a centralized sequencer can enhance user experience through anticipated ordering and outcomes, it relies on trust in the sequencer. Without legal or technical enforcement, users can only rely on the sequencer's reliability. This reliance introduces a potential risk where transactions may not be included in the correct order or may not be included on L1 at all, failing to provide the stable assurance users expect. Interpreting the Concept and Practice of Based Preconfirmation Using Taiko as an Example Taiko has devoted significant effort to the implementation of preconfirmation as this approach aligns closely with the core features of Based Rollup. If Based Preconfirmation can be successfully integrated into Taiko's framework, it can significantly reduce transaction finality delays and enhance user experience. Moreover, this improvement will activate various previously restricted services, enabling them to operate efficiently on the Taiko network. Before delving into a deeper understanding of Based Preconfirmation, it is necessary to first review some key features of Taiko to better comprehend the applicability and advantages of this approach. Taiko Case Study Taiko has fully demonstrated the core features of Based Rollup. It has not only achieved full interoperability with the Ethereum infrastructure but has also been committed to aligning with Ethereum's security mechanisms. Taiko adopts the architecture of Based Rollup, which means it does not rely on a centralized sequencer but rather relies on Ethereum's validators acting as sequencers, responsible for transaction and block ordering. In other words, Taiko's sequencers are of the same type as Ethereum's block proposers. This design gives them special responsibilities and incentive mechanisms, such as maximizing MEV rewards and other benefits of sequencer identity. Therefore, when issues arise in Taiko's L2 sequencing process, these sequencers naturally assume corresponding responsibilities due to their vested interests in the Ethereum ecosystem. This mechanism sets Taiko apart from other Ethereum L2 projects in terms of operational accountability. Furthermore, it is noteworthy that Taiko's Based Rollup model is designed as a "Based Contestable Rollup (BCR)," a structure aimed at incentivizing healthy competition. Through its open and permissionless design, Taiko ensures the decentralization of the system, allowing anyone to participate, thereby making the system more fair and transparent. Based Rollup-Based Preconfirmation So, what does the preconfirmation model designed specifically for Based Rollup look like? The answer is "Based Preconfirmation." This model aims to replace traditional soft confirmation mechanisms with direct verifications on L1 through preconfirmation. Based Preconfirmation provides a system where some L1 validators voluntarily participate and offer preconfirmation services. As sequencers, these validators provide users with verifiable predictions of Rollup transaction outcomes. This approach provides users with a trustworthy guarantee of transaction inclusion and ordering, and these guarantees are based directly on L1, enhancing the trustworthiness and reliability of the Rollup process. Justin Drake first introduced the concept of Based Preconfirmation and proposed a specific role called "Preconfer," which can provide users with signature guarantees, clarifying transaction order and execution status. To ensure the reliability of commitments, each preconfirmer must stake a certain amount of collateral. If they fail to fulfill their commitments regarding transaction order or execution status, they will face penalties under the Slashing mechanism, resulting in a partial or complete loss of collateral. The Slashing mechanism has been widely applied in Ethereum's PoS staking to effectively deter malicious behavior. This mechanism not only strengthens the responsibilities of validators but also establishes a certain level of trust between users and validators. Two scenarios lead to a validator being subject to Slashing penalties: 1. Liveness Faults: If a validator fails, for any reason, to include a user's pre-confirmation transaction on-chain, a liveness fault occurs. Since liveness faults are not always intentional, the penalties are relatively mild. Such faults may stem from network issues or interruptions in the L1 or L2 blockchain, rendering transactions unable to be correctly included on-chain. To protect honest validators from undue penalties, the penalty amount for liveness faults is usually determined through user-validator negotiation. 2. Safety Faults: If a pre-confirmed transaction is included on-chain but the outcome does not align with the user's initial request, a safety fault occurs. This inconsistency is entirely the validator's responsibility, hence safety fault penalties are typically more severe. The validator's stake will be fully confiscated, regardless of whether the issue was intentional. To become a validator in the Based Preconfirmation model, a node (usually an L1 block proposer) must accept these Slashing mechanism conditions and stake the required collateral. Once approved, the validator can then provide services to users and generate income by charging service fees. This fee model offers significant convenience to users, enabling them to bypass the inherent delay in Rollup transaction finality. For instance, after a user submits a pre-confirmation transaction through their personal wallet, they can promptly receive a confirmation proof from the validator. By participating as validators in Based Preconfirmation, individuals not only earn additional income through fee collection but also help optimize the transaction confirmation process in Rollup. This model not only enhances user experience but also provides a reliable and efficient transaction finality solution for the entire L2 ecosystem, further enhancing its attractiveness and utility. Why are users willing to pay fees for pre-confirmation? This is closely related to the core purpose of pre-confirmation. Users are willing to pay fees for pre-confirmation because it directly addresses the inefficiencies in the transaction finalization process in Rollup, bringing significant convenience to users. For example, when a user submits a preconfirmation transaction on an L2 blockchain through a personal wallet, a standard transaction may require final confirmation, while the user requesting preconfirmation can immediately obtain assurance from the prevalidator, completing the transaction without delay. At this point, the user may even see a green checkmark in the wallet interface, clearly indicating a successful transaction. Take DeFi services as another example. When a user performs a token swap on an L2 DeFi platform, preconfirmation can provide additional security for the related transaction. Typically, the transaction's quoted exchange rate or fee may be inconsistent with the actual completed transaction result due to delays. However, through preconfirmation, users can enjoy a fast and efficient transaction finalization process, reducing the discrepancy between expected conditions and actual results, thereby obtaining a more reliable service experience. These use cases not only allow developers to provide more accurate services but also bring a smoother and more convenient user experience. This dynamic further supports the expansion of the L2 ecosystem while also contributing to the growth of the broader L1 ecosystem. Additionally, for the Sequencer of Based Rollup, the additional revenue brought by preconfirmation provides a significant profitable model. This design effectively addresses some of the traditional weaknesses of Based Rollup, making it an ideal choice for the Sequencer, combining reliability and attractiveness. What are the Challenges of Based Preconfirmation? Based Preconfirmation is still a widely studied area in Layer2 projects, represented by Taiko-driven Rollups. Although this mechanism offers a clear solution to enhance L2 performance and scalability while maintaining decentralization, it still faces some challenges that need to be addressed for wider adoption in practical applications. First, when submitting transactions to the blockchain in Preconfer, users may not have an absolute guarantee of transaction inclusivity. Although prevalidators provide collateral to guarantee transactions, this mechanism still does not completely solve the problem of transactions not being included due to external interruptions. Especially when the transaction value exceeds the prevalidator's collateral amount, prevalidators may abuse their authority, selectively including or excluding certain transactions, posing potential risks. Another significant challenge is the profit model based on preconfirmation. The primary source of income for prevalidators is the preconfirmation fees paid by users. However, if the number of prevalidators is insufficient or participation is low, it may lead to market centralization with monopolistic tendencies. In such cases, preconfirmation fees may be artificially raised, increasing the cost for users to conduct fast and efficient transactions, thus threatening the healthy development of the preconfirmation ecosystem. It is worth noting that the concept of Based Preconfirmation is relatively new, having been proposed only about a year ago. To make it a "key tool" for maximizing Rollup-driven L2 scalability solutions' speed and efficiency, it will still take some time for practical implementation and refinement. However, with Rollup firmly established as a core component of Ethereum scalability, further exploration of preconfirmation to enhance performance marks an important step in L2 technology development. In particular, Taiko has made significant progress in driving the implementation of Based Preconfirmation. At the same time, Taiko has collaborated with various partners such as Taiko Gwyneth, Nethermind, Chainbound, Limechain, Primev, and Espresso to jointly explore and develop applications for Based Preconfirmation. These collaborations aim to further advance the L2 ecosystem, with more details on this topic to be discussed in subsequent chapters. Preconfirmation Ecosystem Landscape: Process Diagram Interpretation and Project Exploration In this chapter, we will explore which projects are actively researching and promoting the development of preconfirmation technology in the Rollup-driven L2 ecosystem. As the ecosystem is still in its early stages of development, we will use a process diagram to more intuitively demonstrate and understand the specific preconfirmation process. Preconfirmation Process Diagram Preconfirmation is a complex process that requires close collaboration between L1 and L2, involving multiple roles, each with specific responsibilities. To facilitate a more intuitive understanding of this process, I have created a process diagram for a brief overview. It is important to note that this diagram aims to help explain the overall logic and therefore does not strictly differentiate between the distinct characteristics of Rollup and Based Rollup but focuses on the generic process at a fundamental level. Before delving into the specific steps of the process diagram, let us first understand the various roles involved in the preconfirmation process and their functions: User: An individual user of the L1 or L2 network responsible for creating and submitting transactions. If a user wishes to receive preconfirmation assurance, they will complete the transaction and send it to the preconferrer. Preconferrer: In the preconfirmation process, the preconferrer is responsible for reviewing and validating transactions' validity, providing preconfirmation assurance to users. Through preconfirmation, users can quickly obtain transaction status assurance before final settlement. If nodes do not have preconfirmation eligibility, they act as Non-Preconf Actors, primarily handling regular transactions rather than preconfirmed transactions, similar to standard validation nodes. L1 Validator: Responsible for providing final validation of transactions and blocks on the L1 network. Once the Preconfirmers submit transaction data, the L1 Validator verifies it and records the final data on the L1 blockchain, ensuring transaction integrity and compliance with consensus rules. Preconfirmation Challenge Manager: When there is a dispute or issue during the preconfirmation process, this role is responsible for investigating the problem and taking appropriate action to resolve the dispute. This role plays a crucial role in maintaining the fairness and reliability of the preconfirmation process. Now, let's walk through the preconfirmation process in sequence as outlined in the process diagram: 1. The user sends a transaction request to a Preconfirmer within the preconfirmation participants to initiate the preconfirmation process. 2. The Preconfirmer reviews the transaction and sends a preconfirmation receipt, committing to the user that the transaction will be included in an L1 block, providing the user with initial finality assurance. 3. The Preconfirmer submits the transaction data that needs to be included in the L1 block to the L1 Validator. This data could be a single transaction or aggregated data processed by an L2 sequencer. 4. The L1 Validator validates the submitted transaction data or aggregated data and records it in the L1 block, ensuring its compliance with the blockchain's consensus rules. 5. After a period of time, the L1 block containing the transaction data or aggregated data achieves finality, and the transaction is formally confirmed. 6. Users can check the final outcome of the transaction through an L1 node and, if necessary, raise any potential preconfirmation disputes or challenges using relevant information. 7. If a transaction is found to have not been correctly included on L1 as promised, the Preconfirmer will face penalties from the Preconfirmation Challenge Manager, such as being slashed on their bond or having their staked assets frozen. Exploration of Related Projects The following will delve into the key projects actively involved in the preconfirmation ecosystem and their relevant roles in the process. While these projects hold specific roles in the process diagram, their actual responsibilities may vary slightly. Therefore, this overview aims to provide foundational understanding and serve as general guidance. To maintain clarity, the projects within each category are listed alphabetically. Preconfer Validators Astria: Astria aims to replace centralized sequencers with a decentralized sequencer network and support multiple Rollups sharing this network. This design provides Rollups with stronger censorship resistance, faster block finality, and seamless cross-Rollup interaction. To achieve fast block finality, Astria introduces a preconfirmation feature that enables Rollups to provide rapid transaction confirmation and enhance censorship resistance, significantly improving user experience. Bolt by Chainbound: Bolt is a preconfirmation protocol developed by Chainbound to offer Ethereum users near-instant transaction confirmation services. Its operation is based on a trustless participation mechanism and economic collateral, while remaining compatible with the existing MEV-Boost PBS pipeline, creating new revenue opportunities for proposers. Bolt's core functionality is L1 preconfirmation, providing immediate finality for basic transactions (such as transfers and approvals), thus enhancing user experience. By shifting the responsibility for including transactions from centralized block producers to proposers, Bolt enhances the system's censorship resistance. Additionally, the proposer collateral registration mechanism ensures a trustless environment, supporting various types of smart contracts flexibly. Espresso System: The Espresso System is a protocol dedicated to enhancing blockchain ecosystem interoperability. It adopts the HotShot Byzantine Fault Tolerance (BFT) consensus protocol to achieve transaction ordering and data fast finality across multiple chains. The Espresso System consists of the Espresso Network and Espresso Marketplace, which work together to provide rapid transaction finality and efficient interoperability, aiming to improve the scalability and security of the blockchain ecosystem. Ethgas: Ethgas is a market for transaction block space, with transaction matching managed by a centralized system, and on-chain processes executed through smart contracts. Ethgas provides two main functions: Inclusion Preconfirmation (ensuring transactions are included within a specified Gas limit) and Execution Preconfirmation (ensuring transactions reach a specific state or outcome). Ethgas focuses on protecting transaction privacy in block space transactions and is known for its neutral operational objectives. Luban: Luban focuses on developing a decentralized sequencing layer to connect transaction data between the Ethereum network and Rollups. This sequencing layer is designed as a decentralized system that separates proposal and execution roles. Luban's pre-confirmation feature significantly enhances transaction reliability by ensuring transaction executability before inclusion in the Ethereum network, while also helping optimize transaction fees, Gas prices, and MEV among other key factors. Primev: Primev is developing a proposer network integrated with MEV, combining pre-confirmation with MEV capabilities to build an efficient and reliable peer-to-peer network. This network records commitments to Ethereum transaction execution and incentivizes proposers through a reward or penalty mechanism. Primev allows MEV participants to set specific execution conditions for their transactions, while block producers and validators can commit to meeting these conditions, ensuring transaction pre-confirmation. Based on EIP-4337, Primev supports flexible pre-confirmation and Gas fee options, enhancing transaction processing efficiency and further optimizing user experience. Puffer Unifi: Puffer Unifi's Actively Validated Services (AVS) are built on EigenLayer and focus on addressing pre-confirmation challenges in the Ethereum ecosystem, particularly in the context of Based Rollup architecture. Puffer Unifi AVS leverages EigenLayer's re-staking feature to support the pre-confirmation participation mechanism, aiming to enhance the efficiency of transaction finality. As Based Rollup evolves, the demand for reliable pre-confirmation providers continues to grow, and Puffer Unifi AVS aims to meet this demand. Its ultimate vision is to achieve efficient pre-confirmation without altering the core protocol, thereby driving sustainable growth in the Ethereum ecosystem. Skate: Skate's pre-confirmation AVS relies on re-staked assets on EigenLayer to provide economic security guarantees for all cross-chain operations. This AVS validates the bundling data and information required for cross-chain transactions, which are then signed and prepared for execution by Skate's relayers. Through this process, Skate AVS achieves data pre-confirmation, significantly enhancing the reliability and efficiency of cross-chain transactions. Spire: Spire's Based Stack is a Based Ethereum Rollup framework designed to support the development of App Chains by developers. This framework allows App Chains to interact directly with Ethereum, customize their sequencing methods, support cross-chain exchanges, and optimize user experience through pre-confirmation. Based Stack supports various execution environments, ensures the sequencing revenue of App Chains, and maintains compatibility with traditional shared sequencers. As an open-source project, Based Stack provides developers with comprehensive tools and resources to build and manage App Chains, thereby promoting App Chain development and interoperability within the Ethereum ecosystem. Taiko Gwyneth: Taiko Gwyneth is a Rollup design being developed by Taiko, classified as a based Rollup architecture. Its goal is to achieve full interoperability with Ethereum while managing transaction sequencing directly on Ethereum. This design leverages Ethereum's security and decentralization features while providing high throughput and fast finality. Currently, Taiko is running a proposer mechanism to assist in block creation and exploring a preconfirmation mechanism to facilitate profitable block production within the community. This mechanism aims to optimize block time scheduling and data publishing efficiency. To achieve these goals, Taiko is deeply collaborating with projects like Nethermind and Gattaca. L1 Validator Chorus One: Chorus One is a project that provides validation services and infrastructure for blockchain networks, focusing on staking services across multiple protocols to enhance network stability and security. As an L1 validator, Chorus One's role is to validate transactions and generate blocks, thereby improving the overall network's reliability and efficiency. Recently, Chorus One has shown great interest in preconfirmation technology, even hosting related sessions during Devcon 2024. Research Nethermind: Nethermind is a project dedicated to developing Ethereum clients and tools, with a core focus on improving the performance and stability of blockchain networks. By introducing advanced optimization techniques, Nethermind actively drives the enhancement of Ethereum network transaction throughput. Regarding preconfirmation technology, Nethermind has been conducting in-depth research and has submitted a proposal to Taiko's grant program to expedite the deployment of preconfirmation on the Taiko mainnet. This proposal is based on Nethermind's RFP-001 project and will be implemented in two phases: the first phase will test preconfirmation functionality with a limited set of authorized participants, and the second phase plans to gradually expand the application scope of preconfirmation. Future Outlook Taiko and many Based Rollup Layer2 projects, whether adopting a Based Rollup architecture or not, are striving to optimize the inefficient transaction finality process in traditional Rollups. By introducing the concept of preconfirmation, these projects are building a transaction confirmation system that allows users to confirm transactions more quickly and reliably. Through this approach, these projects continue to explore how to enhance user experience and build user trust. Taiko has fully leveraged its positioning as a Based Rollup Layer 2 project, actively promoting the implementation of Based Preconfirmation mechanism, thereby achieving full interoperability and decentralization with Ethereum. Taiko has significantly improved transaction processing speed and reliability by providing users with fast and reliable transaction finality guarantee, thus significantly enhancing the user experience. However, multiple industry experts, including Arbitrum's Ed Felten, have pointed out that there is still a lack of mature middleware that can fully support preconfirmation. This indicates that the maturity of preconfirmation technology and the profit model of preconfirmers still face challenges that urgently need to be addressed. As described in this article, an increasing number of projects and participants are actively entering the preconfirmation field, each bringing their unique innovative solutions aimed at enhancing the performance and efficiency of the Ethereum Layer 2. This trend also aligns with the general rule that system concepts continue to improve after initial implementation. I believe this stage marks an important milestone in the evolution of L2 systems, and is an exciting positive development in the current L2 ecosystem. By improving user convenience through preconfirmation, it may not only have a profound impact on areas such as DeFi and gaming that prioritize speed and efficiency but also may reconnect Ethereum with its previously fragmented ecosystem by enhancing the performance of Ethereum Layer 2. This performance enhancement may enable more Type-1 Ethereum Layer 2 projects to achieve deep integration with Ethereum, unlocking the potential that was previously difficult to obtain due to speed limitations. These advancements are bound to have a profound impact on the entire Ethereum ecosystem. Preconfirmation remains a challenging and rugged path. However, pioneers like Taiko are stepping up, focusing on providing more convenience to users. Innovation has never been easy, but as a supporter of Ethereum and its Layer 2 ecosystem, I sincerely salute and encourage their efforts. This article is contributed content and does not represent the views of BlockBeats.
Exploring the Potential of Taiko: Daniel Wang’s Vision for a Decentralized and Unstoppable Ethereum Rollup
As the landscape of decentralized applications evolves, Taiko Labs is making waves with its innovative Ethereum-based rollup aimed at promoting freedom of expression. This technology emerges as a solution to the challenges of censorship and centralization faced by many blockchain networks today. “True freedom of speech should be empowered by solid technology,” asserts Daniel Wang, highlighting the core mission of Taiko’s development. Taiko Labs aims to revolutionize Ethereum scaling with its ownerless rollup design, enhancing freedom of expression and decentralization in blockchain technology. Breaking New Ground with Taiko’s Ownerless Rollup Technology Taiko Labs, co-founded by Daniel Wang and Terence Lam, is pioneering a new approach to scaling Ethereum through its unique rollup model. Traditional rollups typically rely on a centralized sequencer or signature verifications, which can lead to potential censorship and operational risks. In stark contrast, Taiko’s design sets out to eliminate these vulnerabilities by utilizing a decentralized method of transaction processing. Emergence from Adversity: The Birth of Taiko The concept for Taiko developed during the COVID-19 lockdown in Shanghai, where Wang’s desire for an unrestricted platform for discourse grew from his experiences of isolation and censorship. “It’s not going to be censored. Anyone can publish anything without revealing their true identity,” he explained. This philosophy drives the layers of security and decentralization Taiko aims to establish. The Technical Edge: Why Taiko is a Game Changer What sets Taiko apart is its architecture as a layer-2 base rollup. Unlike conventional solutions that depend on a centralized authority for processing transactions, Taiko harnesses validators from Ethereum’s layer-1 to ensure integrity and decentralization. This allows the system to operate without creating single points of failure, making it resilient against government intervention and other forms of censorship. Open Source Ethos: Collaboration is Key Wang emphasizes a collaborative spirit within the blockchain community, inviting developers to adapt Taiko’s open-source code. “I am open to copycats — just copy my code and improve it,” he expressed, fostering an ecosystem where innovation thrives through collective effort. This commitment to transparency and enhancement could accelerate the evolution of rollups, potentially reshaping the future of Ethereum scaling. The Vision for the Future: Scaling Ethereum Responsibly Looking ahead, Wang envisions a twofold purpose for Taiko: to demonstrate the practicality of its based rollup design, and to contribute to a better-scaled Ethereum ecosystem. “Let’s scale Ethereum in the right way… if Taiko happens to be a successful L2, that would be great,” he noted. This sentiment speaks volumes about the ethos of Taiko, where success is measured against collective advancements in decentralization rather than mere individual achievements. Conclusion In summary, Taiko Labs is at the forefront of a significant shift in Ethereum technology, focusing on a fundamental right: the freedom of expression. With its innovative architecture, commitment to decentralization, and collaborative nature, Taiko could very well lead the charge towards a more resilient blockchain infrastructure. As Daniel Wang aptly puts it, “Together, we are stronger,” underscoring a future where technology empowers voices rather than silences them. In Case You Missed It: Ether ETFs Experience Positive Cumulative Flows Amid Recent Inflows, Suggesting Potential Growth in the Market
Nethermind Launches Ether Layer2 Network Called 'Surge Rollup'
Nethermind, an ethereum client, has launched a new ethereum Layer2 solution called Surge Rollup that focuses on performance, according to The Block. Additionally, according to Nethermind's website, Surge Rollup is an ULTRABASED rollup with gigabit speeds, built on top of the Taiko stack, and is designed to target developers, builders, and autonomous agents; launches as Phase 2, prioritizing activity, censorship resistance, security, and features that don't require licensing; is verified by an EtherCorrector Sorting, not a centralized sorter; Uses ETH as gas without any native tokens, credits, or airdrops; Provides Ether performance through the Nethermind client.
Data: Taiko's daily trading volume has broken through 5 million transactions, and the TVL has exceeded 81 million US dollars
According to Taikoscan data, the daily transaction volume of Ethereum L2 network Taiko broke through 5 million on November 4th, setting a new historical high. Also according to DefiLlama data, Taiko's TVL reached $81 million, also setting a new historical high. The TVL has increased nearly tenfold within two weeks.
Khamzat Chimaev's Impressive Win Puts Him in Contention for UFC Middleweight Title Shot
The UFC middleweight title shot is currently uncertain, with Sean Strickland originally promised the next opportunity but UFC CEO Dana White's recent comments suggesting a possible change. Despite this, Strickland remains confident in his position as the next in line due to his win over Paulo Costa. There is speculation that the UFC may be hesitant to send Strickland to South Africa for the fight, but Khamzat Chimaev could potentially challenge for the title if he wins his upcoming fight against Nassourdine Imavov. In other UFC news, Ilia Topuria won the Featherweight Championship at UFC 308 via TKO in the third round.
Taiko Trailblazer Season 1 rewards are now available, and Season 2 rewards are now available
On October 12th, Taiko, an Ethereum L2 network, announced that the rewards for the first season of pioneers will soon be available for claiming. The claiming period is one month, until November 12th, 00:00 UTC. The second season of Taiko pioneers has already begun.
The rewards for the first season of Taiko Pioneers are now available to claim, and the second season reward event has already begun
BlockBeats reports that on October 12, the Ethereum L2 network Taiko announced that rewards for the first season of Pioneers will soon be available to claim. The claiming period is one month, until UTC time November 12 at 00:00. The second season of Taiko Pioneers has already begun, supporting locking TAIKO to get XP rewards. Users can lock TAIKO tokens and wETH in an 80-20 pool to gain Trailblazers XP boost (up to 60 times), collect SYMM points and exchange fees. The reward distribution for each level in the first season is as follows: LEGEND: 5,263.16 Densetsu: 2,346.04 Kodai: 1,055.41 Hashira: 572.56 Shogun:290.31 Taichou II:174.19 Taichou I :135.24 Sensei II :100 .38 For more details see official documentation.
Ethereum Beyond Limits: Meet the 5 EVM Chains Changing the Game
ZK-EVM technology, which Taiko uses, can be considered a solution to the problem of Ethereum scalability without losing security and compatibility. Interconnection between the blockchains, such as Moonriver and Kava, is becoming a vital function for reaching new audiences Base and Godwoken are Layer-2 solutions that solve scalability problems at the same time as keeping strong connections with original blockchains. The Ethereum Virtual Machine (EVM) has emerged as one of the fundamental building blocks of blockchain engineering. EVM allows developers to write and deploy smart contracts across different platforms. EVM-compatible chains propose new solutions to the problems of scalability, interoperability, and user experience. This article present five disruptive platforms which are highlighting fresh horizons in the blockchain field. Taiko: Pioneering Type 1 ZK-EVM Technology Taiko is a notable example of a successful ZK-EVM protocol integration. This platform is designed to improve Ethereum’s scalability without any loss of compatibility with the current smart contracts and tools. Taiko’s approach to layer 2 scaling looks to dramatically decrease the cost per transaction and increase the TPS without sacrificing security or decentralization. Moonriver: Bridging Polkadot and Ethereum Ecosystems Moonriver has become one of the best parachains in the Kusama ecosystem, connecting the Polkadot and Ethereum networks. Moonriver also offers full EVM compatibility, meaning that dApp developers can easily port their Ethereum-based applications with minimal changes. This integration leads to the advancement of solutions built on blockchain and the extension of blockchain projects across various networks. Godwoken: Elevating Layer-2 Solutions on Nervous Network Godwoken is the only solution of its kind, based on the Nervous Network for layer 2. For the former, its EVM implementation enables the direct deployment of Ethereum dApps while also utilizing the distinct structure of Nervos. According to the scale and interoperability concept of Godwoken, it can be seen that it is a suitable platform for developers in terms of high performance and cross-chain. Base: Coin base’s Foray into Scaling Solutions Base is created by the cryptocurrency exchange Coinbase which turns out to be an extraordinary layer-2 network focused on Ethereum’s problems with scalability. Constructed using Optimism’s OP Stack, Base intends to offer a low-fee, high-speed environment for dApps. That is why its integration with Coinbase’s large user base can contribute to the widespread adoption of layer-2 solutions. Read CRYPTONEWSLAND on google news Kava: Blending Cosmos and Ethereum Functionalities Kava sets itself apart with the foundation of the Cosmos ecosystem and full compatibility with the Ethereum Virtual Machine. This versatile approach enables developers to incorporate the best features of both platforms to provide a powerful framework for building and deploying decentralized applications. Kava being decentralized can provide developers and users of blockchain solutions exposure to a wide variety of solutions and applications all under one umbrella. disclaimer read more Crypto News Land, also abbreviated as "CNL", is an independent media entity - we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.
Vitalik: The decentralization represented by Taiko BasedRollup is exciting
News on September 20, Ethereum co-founder Vitalik made a share about "the future development direction of L2 expansion" at the Roll Upday event. In it, he mentioned: "Decentralized Based Rollup related projects and routes represented by Taiko are exciting." He expressed high recognition for this.
Overview of Important Developments on the Afternoon of September 18
7:00-12:00 Keywords: COW, Taiko, DePIN 1. Moody's: DePIN technology has great potential but faces multiple challenges; 2. Coinbase adds CoW Protocol (COW) to its listing roadmap; 3. Bridgewater founder Dalio: A 25 basis point rate cut by the Fed would be appropriate; 4. Web3 startup Vana completes $5 million strategic round of financing, led by Coinbase Ventures; 5. US SEC accuses NanoBit and CoinW6 of using social media for cryptocurrency "relationship investment scams"; 6. Coinbase US policy head: Both parties agree on the need for crypto policies to maintain global economic competitiveness; 7. Taiko completes Trailblazers Season 1 snapshot and launches Season 2, offering 6 million TAIKO.
Vitalik Buterin highlights Layer 2 technology for DeFi growth
Vitalik Buterin, co-founder of Ethereum (CRYPTO:ETH), emphasised the critical role of Layer 2 technology in the future of decentralised finance (DeFi) through his X account. He highlighted that the significant reduction in costs associated with Layer 2 solutions is a key factor for broader DeFi adoption. Buterin noted, “Low transaction fees are the cornerstone of the cryptocurrency market’s success,” emphasising that although this goal was initially proposed in 2020, it is becoming a reality with advancements in Layer 2 technology. Buterin pointed to Taiko, a rollup-based decentralised Layer 2 solution, as a strong example of how reduced fees can be achieved without compromising decentralisation. He asserted that DeFi can only reach mainstream adoption if transaction fees are kept low, a barrier that the cryptocurrency market has yet to fully overcome. However, decentralised Layer 2 solutions like Taiko offer promising advancements in tackling high transaction fees, which are seen as a significant obstacle to growth. Robert Sasu, a core engineer from MultiverseX, responded to Buterin’s remarks by suggesting that while Layer 2 technology has the potential to reduce fees, it often relies on centralised architectures in practice. He argued that this reliance undermines the core principle of decentralisation that blockchain technology is built upon. Sasu called for more decentralised solutions to address this issue. In response, Buterin disagreed, highlighting that Taiko's model has successfully achieved low transaction fees while maintaining decentralisation. He emphasised that Taiko’s success shows the feasibility and affordability of truly decentralised Layer 2 solutions, setting a strong precedent for future projects.
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