To properly understand the operating logic hidden behind the Taiko project and its implications in the ecosystem, it is important that certain terms be briefly explained beforehand.

Concretely, ZK Rollups, just like Optimistic Rollups, are second-layer (layer 2) solutions designed to increase the scalability of a first-layer (layer 1) blockchain such as Ethereum, Cardano, or Tezos.

To put it simply, ZK Rollups process and execute transactions, batch them together off the main blockchain (off-chain), and then publish only validity proofs (ZK proofs) on the main chain.

Each batch includes a cryptographic proof called ZK-SNARK or ZK-STARK. There are two subcategories of ZK Rollup: Native EVM (Ethereum Virtual Machine) and EVM-equivalent.

Taiko is an EVM-equivalent ZK Rollup solution aiming to scale the Ethereum network.
As briefly explained above, the Taiko project will process transactions off-chain to relieve congestion on the main network and will only publish the validity proofs (ZK proof) of the ZK-SNARK type on it.

Where the project stands out from its competitors is in its decision to prioritize EVM equivalence. The goal is to make the ZK Rollup as faithful as possible to the EVM and Ethereum specifications in order to support all existing Ethereum smart contracts, dapps, development tools, and infrastructures.

This compatibility offers Ethereum network developers the possibility to deploy their Solidity contracts as is and to continue using the tools they are familiar with.
In addition to the “ZK-EVM” maximum compatibility component (which we will discuss later), which proves the accuracy of the EVM computation on the rollup, Taiko implements a second-layer blockchain architecture to support it.

Taiko aims to establish an architecture that is as lightweight, decentralized, and permissionless as possible.

The Taiko project is driven by inherent needs within the Ethereum network. Indeed, it’s not hard to notice a strong demand regarding network fees from dApp developers and protocol creators, as well as from users who often end up migrating to competing blockchains considered more performant (like Solana, Avalanche, Fantom…) or to sidechains with much lower security than the primary layer blockchain itself.

You’ve understood it correctly, the design of Taiko adheres to several basic principles: Aligned with Ethereum: The goal is to aid Ethereum’s development in the best possible way. Ether (ETH) will be used to pay for transaction fees (Gas) on layer 2.

• Ethereum Equivalent: The design should adhere as closely as possible to that of Ethereum, not only for compatibility reasons but also to meet the expectations and requirements of users of Ethereum’s L2 solutions.

• Security: The protocol design prioritizes security above all.

• Simplicity: The protocol should be built in a way that is simple and focuses only on the core of the ZK Rollup protocol, not on its scalability and governance.

• Robustness: All security assumptions must be directly or indirectly enforced by Ethereum and the protocol. A Proof of Stake mechanism is necessary to penalize malicious behavior.

• Decentralization: The design should encourage a high degree of decentralization in terms of block proposal and proof. Strong decentralization implies the reliable continuity of the protocol’s operation, even in the case of dishonest behavior.

• Permissionless: Anyone should be able to join and leave the network at any time without causing significant disruption to the network or harm to the party in question. No single entity should have the power to authorize or block participants.

From Taiko’s perspective, Ethereum-equivalent ZK Rollups, sometimes called ZK-EVM (or zkEVM), are considered the Holy Grail of level 2 scaling solutions because they make no compromises on security or compatibility, unlike their counterparts.

As previously explained, Taiko’s goal is to design a ZK Rollup that is fully equivalent to Ethereum.

This implies that Taiko could interpret EVM bytecode and also use the same hashing functions, state tree, and other consensus logics as Ethereum.

It’s also important to note that in the future, if the Ethereum protocol is updated, Taiko will strive to maintain synchronization.

Taiko is divided into three main parts:

1. ZK-EVM Circuits: These are used for proof generation. They ensure that the computations on the rollup are correct and adhere to the Ethereum Virtual Machine (EVM) standards.

2. L2 Rollup Nodes: These manage the rollup chain. They handle the transactions and operations that occur on the second layer, separate from the main Ethereum blockchain.

3. L1 Protocol: This connects the ZK-EVM and the L2 rollup nodes, ensuring that the rollup protocol is correctly verified and integrated with the Ethereum main chain.

The ZK-EVM proves the correctness of EVM computations on the rollup with ZK Proof or more specifically, ZK-SNARKs. The design adheres to fundamental principles of security, decentralization, and permissionlessness.

Smart contracts deployed on layer 1 act as a mechanism for data availability and as verifiers of the ZK-SNARK proofs.

Within this architecture, there are three key roles:

1. Proposers: They build blocks on the rollup using Layer 2 transactions from users and then propose these blocks on Layer 1. Any willing participant can perform this block creation function.

2. Provers: Their goal is to generate ZK-SNARK proofs that attest to the validity of transactions and Layer 2 blocks based on the blocks proposed by the proposers.

3. Node Runners: They keep in sync with the state of the chain by executing transactions based on the data present on it. They play a crucial role in maintaining the integrity and continuity of the rollup chain.

On Taiko, the submission of blocks is divided into two parts.

First comes the block proposal. This implies that when a block is proposed, the data of this block are published on Ethereum, and the block is added to the list of proposed blocks stored in the TaikoL1 contract.

Once recorded, the protocol guarantees the immutability of the block.

Second comes the block verification. Since Taiko has a smart contract deployed on L1 where the list of proposed blocks is stored, when a block is proposed, the block’s data are published on Ethereum, and the block is immediately finalized.

This process makes verification much faster since the data are already finalized.

The Taiko ZK Rollup protocol consists of two smart contracts deployed on layer 1 and layer 2 (L1 and L2).

TaikoL1, deployed on Ethereum, allows for the proposing, proving, and verifying of L2 (TaikoL2) blocks.

This smart contract maintains the following state variables:

• The total number of proposed blocks and the ID of the next block to be proposed

• The list of proposed blocks

• The ID of the last verified block

• The correspondence between the validation hashes of validated blocks and the numbers of the L1 blocks they contain

• The correspondence between the IDs of proposed blocks and their Fork choices

The Taiko L2 (smart contract deployed on Layer 2) allows for the reuse of EVM programmability and facilitates anchoring (the anchoring transaction is a means for Taiko to use the programmability of the EVM to enforce certain protocol behaviors).

It also allows for proving the invalidity of a block that has been proposed.

However, it is important to note that some EIPs will be disabled during implementation but will be reactivated in the near future.

The solutions implemented to improve the scalability of the Ethereum network are numerous, but they often involve necessary design or application compromises to function.

Taiko, on the other hand, offers solutions to these issues by proposing an architecture different from its competitors.

If you wish to delve deeper into these concepts that make up the protocol, we strongly recommend consulting Taiko’s whitepaper.