What is Taiko (TAIKO)? - Bitfinex blog

05 Jun What is Taiko (TAIKO)?

Posted on 05 Jun 2024 in Education, Token by admin

Taiko is a fully open-source, permissionless ZK-Rollup designed to address the high transaction fees and scalability issues associated with the Ethereum network while maintaining its core properties of censorship resistance, permissionlessness, and security. By leveraging the Based Contestable Rollup (BCR) architecture, Taiko aims to provide a configurable and decentralised solution that allows Ethereum to scale effectively. This architecture enables Taiko to handle transaction sequencing without centralised actors, relying instead on Ethereum validators to maintain the network’s decentralisation and security.

The primary goal of Taiko is to reduce transaction fees on Ethereum by offering a rollup that seamlessly integrates with the existing Ethereum infrastructure. Users interacting with Taiko experience it much like using Ethereum itself, ensuring a frictionless transition. The rollup achieves this through its Ethereum-equivalent ZK-EVM, which supports the execution of Ethereum smart contracts and transactions at a significantly lower cost. Additionally, Taiko’s contestable rollup design incorporates a multi-proof system to enhance security and reliability, allowing for dynamic configuration adjustments as technology evolves.

Taiko’s governance structure is built around the Taiko DAO, which is responsible for overseeing protocol upgrades, parameter adjustments, and other critical decisions. The DAO is composed of TAIKO token holders who have voting rights, ensuring that the protocol remains community-driven and decentralised. Supporting the DAO are several key organisations, including Taiko Labs, which focuses on research and development; the Taiko Treasury, which manages the protocol’s funds; and the Taiko Foundation, which fosters ecosystem growth and development. The Taiko Security Council, elected by the DAO, provides an additional layer of security by managing emergency actions and overseeing the Guardian Provers.

The open-source nature of Taiko not only enhances transparency but also encourages community participation and collaboration. This aligns with the broader movement towards decentralisation in the cryptocurrency space, where open-source projects like Taiko play a crucial role in democratising access to blockchain technology. By enabling permissionless participation in its rollup protocol and ensuring that all operations are community-run, Taiko provides a scalable, secure, and cost-effective solution for Ethereum users, ultimately contributing to the decentralisation and resilience of the Ethereum network.

What is the TAIKO Token?

The TAIKO token is the native utility token within the Taiko ecosystem, playing a pivotal role in maintaining and enhancing the network’s operations and governance. One of the primary use cases of the TAIKO token is its function in the Taiko DAO, where token holders are granted voting rights. These rights enable holders to participate in crucial decision-making processes, such as protocol upgrades, parameter adjustments, and other governance matters. This democratic approach ensures that the protocol remains community-driven and aligned with the interests of its users.

Beyond governance, the TAIKO token is also integral to the network’s economic model. It is used to pay for transaction fees within the Taiko rollup, offering a cost-effective alternative to the high fees often associated with Ethereum transactions. By using TAIKO tokens to cover these costs, users can benefit from reduced transaction expenses, thereby encouraging broader participation and adoption of the Taiko network. This utility helps to create a sustainable economic environment within the Taiko ecosystem, where the token serves as a medium of exchange for network services.

Additionally, TAIKO token holders enjoy several benefits that enhance their participation and incentivize their engagement. For instance, holders can earn rewards through staking, where they commit their tokens to support the network’s security and operations. These staking rewards are designed to incentivize long-term commitment to the network, ensuring a stable and robust infrastructure. Furthermore, by staking their tokens, holders can also contribute to the consensus mechanism, playing an active role in maintaining the network’s integrity and performance.

The TAIKO token also plays a role in the contestation and proving mechanisms within the Taiko rollup. Provers, who generate proofs for the validity of transactions, are required to place validity bonds in TAIKO tokens. Similarly, contesters, who challenge the validity of these proofs, must post contestation bonds in TAIKO tokens. This system ensures that all participants have a financial stake in the accuracy and reliability of the network’s operations. Successful provers and contesters are rewarded in TAIKO tokens, creating a competitive and economically incentivized environment that upholds the network’s security and trustworthiness. Through these diverse use cases, the TAIKO token is essential in fostering a vibrant, secure, and participatory ecosystem.

TAIKO Tokenomics

How to buy TAIKO with crypto

1. Log in to your Bitfinex account or sign up to create one.

2. Go to the Deposit page.

3. In the Cryptocurrencies section, choose the crypto you plan to buy TAIKO with and generate a deposit address on the Exchange wallet.

4. Send the crypto to the generated deposit address.

5. Once the funds arrive in your wallet, you can trade them for TAIKO. Learn how to trade on Bitfinex here.

How to buy TAIKO with fiat

1. Log in to your Bitfinex account or sign up to create one.

2. You need to get full verification to be able to deposit fiat to your Bitfinex account. Learn about different verification levels here.

3. On the Deposit page, under the Bank Wire menu, choose the fiat currency of your deposit. There’s a minimum amount for fiat deposits on Bitfinex; learn more here.

4. Check your Bitfinex registered email for the wire details.

5. Send the funds.

6. Once the funds arrive in your wallet, you can use them to buy TAIKO.

Also, we have Bitfinex on mobile, so you can easily buy TAIKO currency while on-the-go.

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