Taiko

• Taiko is an Ethereum Layer 2 built as a based rollup, meaning Ethereum validators sequence its transactions.

• It aims for type-1 zkEVM equivalence, matching Ethereum exactly rather than approximating it.

• TAIKO is used for staking by provers and governance.

• Supply allocated across community, ecosystem and contributors.

• Provers stake TAIKO and are rewarded for generating validity proofs.

Pros:

• Based sequencing inherits Ethereum's decentralisation rather than running a centralised sequencer.

• Type-1 equivalence means Ethereum tooling works without any modification.

• Permissionless proving rather than a designated prover set.

Cons:

• Based sequencing means it cannot capture sequencing revenue, which funds most Layer 2 operations.

• Type-1 proving is the most expensive form of zkEVM proving.

• Activity has been modest relative to competing Layer 2s.

• Exposure to the most decentralisation-faithful Layer 2 design currently operating.

• Type-1 equivalence removes migration friction entirely.

• Weigh that the design forgoes the revenue model other Layer 2s rely on.

• Sequencing performed by Ethereum validators rather than the rollup itself, removing the centralised sequencer that every major Layer 2 still operates.

• Layer 2s claim Ethereum's security while running centralised sequencers that can censor or reorder transactions.

• Based sequencing hands that role back to Ethereum, at the cost of the sequencing revenue that funds operations.

• Founded by Daniel Wang, who previously founded Loopring.

• Backed by Sequoia China, Generative Ventures and Hashed.

• No public ICO. Distributed via airdrop and Binance ecosystem programmes in 2024.

• Forgoing sequencing revenue leaves an unresolved funding question.

• Type-1 proving costs are the highest among zkEVM approaches.

• Modest activity relative to competing Layer 2s.

• Crowded Layer 2 market.