Our Investment in Taiko

A Blossoming Based Rollup in the Heart of the Ethereum Era

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Imagine a world where Ethereum’s scalability knows no bounds, where transactions are lightning fast, and user privacy is sacrosanct. This is not a distant dream but a rapidly approaching reality, thanks to Taiko. As the lead investor, we are thrilled to support Taiko’s journey to revolutionize the Ethereum ecosystem with their pioneering Type-1 ZK-VM technology. Today, as they launch their mainnet, we stand on the cusp of an unprecedented leap forward in technological innovation.

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

The Taiko team brings a wealth of experience from their background with Loopring, one of the first ZK rollups. This foundation has equipped them with the knowledge and skills necessary to tackle the complex challenges of Ethereum scalability. The management team has been working together for over five years, which is also very rare in the scene, further solidifying their cohesive and effective approach to innovation.

Taiko aims to increase Ethereum’s scalability by 1000 times, providing an EVM-consistent UI and experience for developers. This means any EVM-compatible L1 project can seamlessly transition to L2 by simply copying and pasting their code onto Taiko.

A unique aspect of Taiko’s approach is the decentralization of proposers and provers to prevent a single point of failure. Taiko applied Based Rollup to decentralize the sequencing process within its protocol. In this setting, Ethereum validators finalize the sequencing, as Based Rollups allow sequencing to be conducted on the base L1 chain. Additionally, Taiko’s Based Contestable Rollup (BCR) allows application chains to adopt newer, more efficient validity proofs without altering Taiko’s core protocol. Combined with the Multi-Proof, this reduces potential vulnerabilities and smart contract bugs within the protocol, making Taiko the only L2 to achieve this feature.

These features have attracted over 100 DApps to Taiko’s testnet. Taiko has formed partnerships with EtherScan, USDC, Pyth, multiple DeFi protocols and bridges. With Uniswap’s announcement to deploy Uniswap V3 on Taiko’s mainnet, we anticipate similar announcements from other major protocols once they go live on the mainnet. Notably, Taiko boasts the largest Discord community in the entire crypto space, highlighting strong community engagement and support.

Taiko also has an extensive roadmap with promising technologies:

• Based “Booster” Rollup (BBR): Booster Rollups enhance basic rollups by providing native Ethereum L1 DApp scaling. BBR enables atomic cross-rollup transactions between all L2s in the booster network while maintaining the benefits of L1 sequencing. After launching BCR on the mainnet, Taiko plans to upgrade to BBR or launch a separate BBR L2 as a major milestone.
• Inception Layers: This involves using Taiko as both L2 and L3, allowing for parallel L2 instances and L3 deployment on top. This approach leverages Taiko’s Ethereum-equivalence to address scalability limitations by enabling multiple rollups. Inception layers ensure extensive scalability while maintaining interoperability through Merkle proofs, thus preventing fragmentation across different layers.

Taiko is supported by prominent figures in the Ethereum community, including key figures such as Vitalik Buterin and Justin Drake. This endorsement underscores the credibility and potential of Taiko’s technology. With such a strong foundation and clear vision, Taiko is poised to become a cornerstone in the future of Ethereum scalability and innovation. We’re very excited to be a part of this journey.

Authors: Ryan Kim, Edward Tan, Dan Park