How does Taiko lead the way for the decentralization of Rollups?

Original authors: @xparadigms and @IngsParty

Original title: 《Decentralizing Rollups: A Neglected Priority in Rollups》

Original compilation: weizhi, BlockBeats

Decentralization is one of the core values of blockchain. However, to enhance Ethereum's scalability, Rollup solutions sacrifice some degree of decentralization in their operations. Achieving complete decentralization in these operations still faces challenges in ordering and proof settlement, especially for optimistic Rollups and zero-knowledge (zk) Rollups.

Despite these challenges, the development of decentralized Rollups is accelerating. Some optimistic Rollups have introduced permissionless challenge mechanisms and are testing hybrid proof systems. The Taiko project stands out for its clear roadmap toward decentralization. Let’s delve into the reasons.

1. Background - Core Components: BCR and BBR

Taiko's "Path to Decentralized Rollups" introduces two proof systems and frameworks: Competitive Rollup (BCR) and Booster-based Rollup (BBR).

1.1 Competitive Rollup (BCR) - A Robust L2 Proof System

BCR is a Rollup design that incorporates a competitive mechanism. This design verifies transactions by allowing participants to challenge the validity of transactions when fraud is suspected. This mechanism enhances decentralization by enabling Ethereum validators to use the challenge mechanism for transaction ordering without a central sequencer, thereby maintaining the integrity of the blockchain.

The BCR mechanism combines the advantages of Ethereum transaction ordering with challenge functionality, aiming to reduce transaction fees while maintaining security and decentralization. Additionally, Taiko employs various proof systems within BCR, including SGX, ZK, SGX + ZK, and other stages of Rollup proof systems, ensuring the system's flexibility and more stable operations.

Despite these advantages, BCR's design has a potential drawback: when competition is infrequent, provers may lack activity. The structure of provers requires significant competition to generate profits, so in less competitive environments, they may be less inclined to participate. To address this issue, Taiko has implemented dynamic adjustments to different Rollup proof systems.

1.2 Booster-based Rollup (BBR)

BBR aims to scale Ethereum DApps without requiring redeployment across all L2 solutions. It reduces developers' workload and lowers redeployment costs by sharding transaction execution and storage. This design aims to address liquidity fragmentation issues between L2s and enhance network scalability.

In November 2023, Taiko launched a booster Rollup program named Gwyneth to enhance Ethereum's capabilities. Gwyneth uses Ethereum L1 validators for transaction ordering and L1 builders for block construction. Its main features include synchronous composability for seamless L1 integration, scalability to meet growing demands, and rapid transaction pre-confirmation capabilities.

Gwyneth is "finalized" from the start, with its security guaranteed by Taiko's multi-proof system Raiko, and plans to introduce zkVM in the future. Both BCR and BBR are part of Taiko's efficient scaling solutions for Ethereum, ensuring high transaction volumes while maintaining security and decentralization.

2. Key Points

2.1 "Are we considering decentralization in Rollups?"

FourPillars researcher Heechang believes that currently, most Rollups remain centralized. Decentralized ordering and proof systems are still in progress. Two prominent proof systems, optimistic Rollups and zero-knowledge Rollups, are moving toward decentralization.

Optimistic proof systems: These systems have implemented mandatory L1 transactions and are exploring shared ordering and introducing permissionless challengers. Arbitrum and Optimism allow permissionless challenges, but recently Optimism has prohibited this mechanism due to suspected vulnerabilities.

Zero-knowledge proof systems: Most zero-knowledge Rollups do not allow mandatory transactions in L1. While zero-knowledge proofs provide secure state change guarantees, operations remain centralized, and technical challenges are still significant.

Although not fully decentralized at present, Rollup frameworks like OP-Stack, ZK-Stack, Polygon zkEVM, and Arbitrum Orbit have been adopted by hundreds of L2 projects. This trend is ongoing, and Rollup framework teams are working hard to achieve decentralization. However, not all projects have a clear roadmap to address decentralization challenges.

In this regard, Taiko excels. From its inception, it has had a clear roadmap aimed at becoming an L2 and decentralized Rollup framework. It has a clear path forward and possesses operational tokenomics that provide sustainable utility for its L2 tokens, which is lacking in most other projects.

As other projects also improve their codebases and infrastructure, will Taiko successfully realize its vision at the right market moment? Time will tell. As one of the teams closely collaborating with the Ethereum Foundation, Taiko particularly needs to focus on its progress in decentralization.

2.2 "It's time to consider the decentralization of Rollups"

FourPillars researcher Ingeun Kim believes that currently, major Rollup projects are striving for decentralization. However, no project has made significant progress toward achieving complete decentralization. The main reason is that today's mainstream Rollups prioritized decentralization relatively low during their initial design phases. These Rollups initially focused primarily on performance and functionality, and now find it extremely challenging to integrate the concept of decentralization into their rigorous designs. This is understandable, as in the early stages, Rollups needed to deliver efficient performance results while meeting Ethereum's scalability demands.

However, the concept of decentralization in Rollups is becoming increasingly important. It is akin to the natural transition from the performance-driven Web2 era to the decentralized Web3 era. Fortunately, many Rollup projects have laid the groundwork for future decentralization. In this context, Taiko's attempts at decentralized Rollups are worth positive attention. Particularly, its Competitive Rollup (BCR) mechanism incorporates the fundamental elements necessary for achieving complete decentralization, including allowing anyone to participate, as well as fair rewards and penalties.

Of course, there are still many areas that need improvement, and the road to complete decentralization is fraught with challenges. However, Taiko's efforts are considered highly significant and may have a positive impact on the entire Ethereum L2 ecosystem. Their progress is definitely worth watching.

3. Other Perspectives

3.1 "Choice is not just a technical issue, but also about decentralization"

Taiko member Junger stated that with the popularity of Rollups, fragmentation and isolation have become key issues. There are trade-offs in choosing between Rollup-based and shared ordering layers. Shared sequencers provide fast finality and cross-chain composability but introduce new trust assumptions and potential failure points. Rollup-based solutions leverage Ethereum's infrastructure, providing liquidity and L1 composability but face challenges related to block time and revenue.

Future improvements may include pre-confirmation based on faster L1 block times to enhance user experience while remaining aligned with Ethereum. The goal is to build a scalable and truly decentralized ecosystem that aligns with Ethereum's vision.

Junger emphasized that the decision to develop based on Rollups is not merely a technical decision but pertains to the direction of decentralized Rollup "frameworks."

3.2 "The endgame is based on Rollups"

Ethereum Foundation researcher Justin Drake has been actively involved in discussions about Ethereum's scaling solutions, particularly focusing on Rollup-based and Taiko projects. Drake highlighted the importance of decentralized ordering, which can alleviate monopolistic control and censorship issues in transaction ordering. He believes that integrating technologies such as zero-knowledge proofs and shared sequencers can enhance the functionality and security of Rollup-based solutions.

Justin Drake considers Taiko an important step toward achieving a decentralized and scalable Ethereum ecosystem, with its permissionless ordering and proof system on the mainnet being a significant feature. He also stated, "The endgame will be based on Rollups."