Getting Started with Based Rollups and Taiko
Recently, Ethereum creator Vitalik Buterin pointed to Taiko as a good example of a “based rollup.” This kind of L2 is a newer approach, but what does it mean?
Of course, a rollup is an L2 that processes Ethereum transactions offchain and then posts data back to the Ethereum mainnet (a.k.a. L1) for security. Accordingly, based rollups are a newer concept in the rollup space. The key characteristic of a based rollup like Taiko is that it uses the Ethereum L1 for sequencing transactions.
In other words, the order of transactions in a based rollup is determined by Ethereum validators rather than a separate sequencer. By using Ethereum for sequencing, Taiko aims to be more decentralized than rollups with centralized sequencers, which describes most L2s as they stand today.
Since L1 handles transaction sequencing, based rollups can batch and confirm transactions more efficiently, potentially resulting in lower operational and transactional costs.
Additionally, based rollups eliminate the need for further complexities like L2 escape hatches, external consensus mechanisms, and signature verification sequencers, leading to a simpler technical architecture.
All that said, Taiko represents an interesting new thrust in the Ethereum scaling scene. If you wanted to dive in, where to start today?
First things first, you’ll want to [quest 59 "bridge ETH into Taiko"]. I recommend a “fast bridge” platform like Relay or Jumper to quickly move ETH in; note you can also quickly move ETH out from Taiko when you’re ready through these same platforms.
Then what? Well, one thing to keep in mind is that Taiko Labs is now overseeing its Trailblazers Season 2 campaign, running from now through Dec. 16, 2024.
This new season will see 5 million in TAIKO token rewards distributed to the L2’s users for transactions and features an updated experience points system, new team opps, new badges, revised XP multipliers, and a new battle game called Faction Battle Arena.
The main way to dive into this Trailblazers 2 campaign is by trying top Taiko apps. For instance, here are a handful of apps that the Taiko team is currently highlighting:
- 🔄 Oku — A bridging and swapping platform for Ethereum Virtual Machine (EVM) chains
- 🥁 Ritsu — A decentralized exchange (DEX) on Taiko
- ⛓️ iZUMi Finance — A multi-chain DeFi protocol as DEX-as-a-service platform
- ☀️ Meridian — A stablecoin, perpetuals trading, and lending protocol
Zooming out, Taiko is currently the 19th largest L2 according to L2BEAT, but the network has plenty of room to grow—not only because of its novel, secure architecture, but also because of the growing desire in the Ethereum community for using truly decentralized rollups.
Of course, the concept of “based rollups” is relatively new in crypto, and it may take some time for the space to catch up with why a network like Taiko is compelling. This knowledge gap is your arbitrage opportunity as far as getting involved on the ground floor of based rollups is concerned!