Interview with Taiko Founder: Countdown to Cancun Upgrade, How Will Taiko Seize the First-Mover Advantage?
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Interview with Taiko Founder: Countdown to Cancun Upgrade, How Will Taiko Seize the First-Mover Advantage?
The Taiko mainnet will launch within three months after the Cancun upgrade, with an expected 50% of tokens distributed to users and developers over two years.
Navigating Web3 tides with focused insightsHost: JOE, Deputy Chief Editor of Foresight News
Guest: Daniel Wang, Co-Founder & CEO of Taiko
Host: Could you briefly introduce yourself, Daniel?
Daniel Wang: I officially entered the crypto space in 2017. Actually, back in 2013, I ran an exchange for about a year or two before stopping. At that time, Bitcoin was around 800 RMB, dropping as low as 200 RMB. In 2017, I worked on an ICO project called Loopring, and now I'm focused on Taiko. That's roughly my journey.
Host: After working on Loopring, why did you choose to enter the Layer2 space?
Daniel Wang: Loopring was essentially building an on-chain order book clearing system. There were times when on-chain interaction costs were extremely high—sometimes tens of dollars per transaction. We then started thinking about moving data off-chain, which led us to build the world’s first Rollup. However, it wasn’t very good at the time—it was non-programmable and incompatible. Later, we decided to keep improving the technology and do something no one else had done, which is how Taiko came about.
Host: What impacts will the Cancun upgrade bring?
Daniel Wang: The Cancun upgrade has been highly anticipated. From day one of forming the Taiko team, we made it clear that launching our mainnet would only happen after the Cancun upgrade. Many Layer2 projects also designed their rollups with the expectation that data costs would be reduced through this upgrade. After Cancun, median data cost reductions are expected to be around 50x. However, since it introduces a separate data market driven by supply and demand, it's hard to predict exact savings over time—but I believe most Rollup projects will benefit significantly.
The most direct impact of the Cancun upgrade is lowering data costs, thereby reducing overall Layer2 transaction settlement fees. Transaction costs will drop substantially. Of course, engineers still have a lot of work to do behind the scenes, but for users, lower costs are the most tangible and important benefit.
Currently, we face a small challenge: maximizing block space utilization. For example, if the data we post on-chain is too small, we don't fully use a block’s capacity, yet we still pay nearly the same fee and waste space. So we're actively exploring ways to better utilize available block space—that's currently a key optimization focus.
Host: How do you expect the Cancun upgrade to affect the overall Layer2 market landscape?
Daniel Wang: I don’t think there will be major immediate changes. It’s a gradual process—teams slowly updating code to adapt to the new environment.
Starknet and other Layer2s have mostly completed testing, and we’ve already begun running blocks on our internal testnet. But everyone still has edge cases to address—like how to maximize block space usage? Or how should zero-knowledge proofs verify block hashes—via circuits, or compiling ZKVM into instruction sets? There are still derivative tasks to complete.
So right now, all teams are in preparation mode. I don’t think anyone needs to switch immediately upon upgrade. But within three months of launch, many projects will likely transition to the upgraded environment.
Host: With the Cancun upgrade just about a week away, could there be risks causing market volatility? And is planning already underway for the next upgrade?
Daniel Wang: We haven’t really started preparing for the next upgrade yet—we prefer to take things step by step. Once the mainnet launches, I understand the next upgrade may gradually come into view. It could offer significant benefits for cross-chain transfers by further reducing on-chain data costs. Given how long the Cancun upgrade took, the next one might take even longer.
As for risks with the Cancun upgrade, I don’t see them being particularly high. Testnets have undergone extensive testing. Unless there are minor client bugs—and remember Ethereum supports multi-client implementations—overall, I expect this upgrade to go quite smoothly.
Host: Can you share your fundraising experience?
Daniel Wang: We raised three rounds. The first round was very easy—capital chased us. The second was harder due to higher valuation, requiring more meetings with each investor. By the third round, we were chasing the market—talking to many VCs. Fortunately, people generally认可 our positioning. They questioned implementation details, but rarely doubted our direction. Even though we’re in a bull market now, fundraising wasn’t easy these past couple of months—especially with several Chinese faces on our team. We spoke with domestic Chinese VCs, but they’ve been very cautious lately. Overseas funds have been more active, though mostly focused on U.S.-based teams.
You can see how U.S.-based or U.S.-originating teams tend to raise more easily. We’ve noticed American VCs often operate in tight groups—they help not only pre-investment but also post-investment, co-promoting and organizing events. In contrast, Eastern funds seem less active in this regard. Overall, we’re quite satisfied with our current investors—we carefully selected them.
Personally, I wasn’t deeply involved in fundraising—the most engagement came from our co-founder. My role was mainly answering technical questions. So from my perspective, it felt relatively smooth. But those on the front lines know fundraising is never truly easy—especially at our valuation level. When raising at a high valuation, investors naturally ask: “Why so high?” No matter how accomplished you are, when taking others’ money, you must convincingly justify it. VCs aren’t naive—they calculate required returns per round, need answers to all their concerns before pitching to their committee or LPs.
Throughout these discussions, we helped them find answers. This process actually benefited us technically—many top-tier VCs now have sharp analysts who ask precise, insightful questions, constantly challenging and inspiring us. Internally, we’d discuss: “Why did we struggle with that question? Is our solution flawed? How can we improve?” Fundraising wasn’t just about securing capital—it pushed us to refine our design and rethink assumptions. For us, it was genuinely valuable.
From a purely financial standpoint, we didn’t *need* the funding. Initially, we aimed to be fully community-driven—raising zero dollars. That was our original vision two years ago. Over time, my thinking evolved through the fundraising process. I realized doing everything alone, without external input, can lead to blind spots and arrogance. Without constructive challenges, we wouldn’t have built such a strong project. So ultimately, the process was healthy.
Host: Where will the funds primarily be allocated?
Daniel Wang: Our fundraising goal is ensuring the project survives regardless of bull or bear markets. From an engineering standpoint, we don’t require huge funding—core preparations for mainnet are nearly complete, and we could launch within the next two to three months.
Our engineering team is largely staffed, so spending will focus on ecosystem development. We’ll invest heavily in technical outreach—not R&D itself—such as grants, hackathons, attending conferences, and various initiatives to incentivize contributors to write better docs and tutorials.
On infrastructure, we must ensure apps built on our platform run securely without fund loss, so substantial funds will go toward security audits. Additionally, listing tokens on exchanges, attracting large players [RK1] to deploy on our mainnet, media campaigns—all incur costs. There are many expense areas.
Thus, this round aims to accelerate ecosystem growth and developer acquisition—moving faster and more confidently, unhampered by funding constraints.
If needed, we may raise again later, though currently there’s no plan—mainnet launch is imminent. While our total funding lags behind other Layer2s, we’ve kept expenses minimal. I’m extremely cautious with budgets.
Another point: most of our tokens are reserved for the community. The founding team holds only a small portion—at least half belongs entirely to the community. Regardless of distribution method, ultimate ownership flows back to the community, not investors or founders.
Overall, our goal isn’t to raise excessive capital, but to distribute more tokens widely. Excessive fundraising increases selling pressure. Despite reaching higher valuations in later rounds, our total amount raised remains modest, diluting far less to VCs than typical projects—reducing future operational pressure.
Host: With so many Layer2 projects in the market, what are Taiko’s competitive advantages?
Daniel Wang: Differentiation is essential. Cloning tech stacks just to launch a token and deploy offers limited value. That said, it’s not meaningless—if a project gains user adoption via operations and brings more people into Web3, it creates value. For instance, BASE chain created significant value for the Ethereum ecosystem through user acquisition and promotion.
But if every project competes solely through operations, developers won’t get diverse technical options.
When building Taiko, our first question was: with so many existing Layer2s, why build another chain? What unique option do we offer developers? This was our starting point. If we couldn’t answer it, VCs wouldn’t invest either.
Our current positioning is simple: if Taiko launches tomorrow, we’ll be the first truly permissionless chain. Anyone can propose a block or transaction. While packing a standalone block may cost slightly more, anyone can participate in network construction. The biggest advantage of permissionlessness? Decentralization—no single entity controls block production. This prevents censorship issues seen on centralized Layer2s, where certain transactions (e.g., privacy-related ones) may be excluded. On Taiko, censorship isn’t possible, so some Layer2 apps may migrate here. We don’t assume which specific apps will favor Taiko—we simply offer developers a choice: if you value permissionlessness and fear censorship, come to Taiko. We literally cannot censor you.
In the future, once mature, we’ll relinquish ownership. Technically speaking, we’re a “base rollup”—block production and transaction ordering are determined by Ethereum miners, not us. We give up this control—and the profit from it. Current Layer2s earn substantial revenue; transaction fees flow directly into their wallets—anywhere from hundreds of thousands to millions annually. We redirect these fees entirely to independent third-party engineers in the ecosystem who best pack blocks. By sacrificing our own profits, we make the network more decentralized and healthier.
We don’t want to compete via operations—operational costs are high and risky. Every dollar spent has an opportunity cost. Instead of competing operationally, we aim to empower applications through unique technology—such as deeper collaboration with Layer2 MEV. Currently, Layer2 MEV actors struggle to cooperate with most Layer2s because they’re centralized—MEV profits are captured internally. With Taiko, whether you partner with us or act independently, if you pack blocks, you capture all MEV revenue. That’s the distinct option we provide.
Host: How do you approach building Layer3?
Daniel Wang: The entire Layer3 narrative remains unproven. Currently, it’s broadly assumed that if a company has intense on-chain activity, it might need its own chain—but doesn’t want to build consensus from scratch. Instead, it wants to leverage Ethereum’s consensus. In such cases, teams can use Taiko technology to clone a Layer2, or build a Layer3 deployed atop Taiko.
Imagine a scenario: you attract 1 million or 10 million users, then decide to shut down. Those users must withdraw from Layer2 to Layer1. On Ethereum, each user making one or two transactions is extremely expensive—and burdens the base layer. But if you operate a Layer3, withdrawals happen at the Layer2 level. All 1 million users transact within Layer2, making exits significantly cheaper.
In the future, companies experimenting with chains—unsure about long-term viability—may opt for Layer3 as a flexible solution. Layer3 is an option, though it’s unclear who will adopt it. Personally, I think social networks or games—where individual transactions carry little value—might benefit most. That said, I’ve heard the term “Layer3” for a while. Over the past year, several companies claimed to specialize in Layer3, but check their websites—how many actually demonstrate real Layer3 tech with active users? Almost none. So currently, Layer3 remains more of a narrative—either premature or speculative, not yet at critical mass. That said, Taiko has experimented in this area. About three months ago, we launched a testnet featuring a Layer3. Our tech supports iterative deployment—we *can* support Layer3 if desired. But our current stance is to remain an open-source tech stack. If someone wants to build a Layer3 using Taiko on Ethereum, they’re welcome. We don’t want to become a B2B service provider. Our goal is maintaining Layer2 well—offering free assistance to builders, but avoiding a service-based model.
Host: What makes Taiko attractive to developers?
Daniel Wang: If I were building an app, I’d likely start developing the prototype on Ethereum or its testnet. Committing early to a specific Layer2 carries significant risk.
Once you commit to a particular Layer2, migrating elsewhere becomes extremely difficult. Many projects instead follow this path: develop and test on Ethereum testnet, maybe even launch on mainnet. Only when user volume grows and costs become unsustainable do they realize they need scaling—then consider migrating to or building a Layer2. At least in early stages or today’s context, this approach seems reasonable.
Our goal is: if you follow this path, migrating to Taiko should require virtually no code changes—just updating a network ID. We aim to minimize developer friction. Conversely, if you dislike Taiko—due to performance, security concerns, dissatisfaction with our team or support—and wish to move to another Ethereum-compatible chain, the cost should be near-zero, or at most a few days of one engineer’s time. Unlike moving to a completely heterogeneous chain or switching programming languages and MEV models. So how do we attract developers? First, minimize trial-and-error cost. Second, offer true permissionlessness. Third, maintain near-perfect compatibility with Ethereum’s execution layer—we avoid adding flashy, proprietary features that create lock-in. Whenever Ethereum upgrades, we follow closely. When Ethereum adds new features, we integrate them as quickly as possible. We refuse to become incompatible with Ethereum. Thus, our core principles are: maximal decentralization, eventual relinquishment of control, and strict Ethereum compatibility. These are non-negotiable design tenets.
Code-wise, we’re nearly 100% open source—except possibly airdrop contracts. Everything else is open, and our protocol is permissive: anyone can use or modify it freely.
Host: Any interesting projects in the Taiko ecosystem?
Daniel Wang: In ecosystem development, we’re particularly focused on gaming, social, and DeFi. That said, this isn’t forward-looking—it’s retrospective. These three areas have shown strong potential in our ecosystem so far. What future projects will thrive on Taiko remains to be seen—we hesitate to draw conclusions too early.
Coming from an engineering background, most of our team are engineers. Our mindset differs from operators—engineers think: “I built something cool, people will use it. If not, they won’t.” Sales teams try to attract users, but long-term retention depends on the value your chain delivers.
We fully support ecosystem-building activities and marketing efforts. But from a technical standpoint, we must reject the idea that a chain’s success hinges solely on operational prowess—on throwing money at incentives, promising high ROI to lure users who vanish once rewards dry up.
Long-term, we won’t rely on spending heavily post-mainnet to create superficial momentum. Instead, we must confront fundamental questions: Why will Taiko exist five years from now? Why would developers choose Taiko over higher-return chains? You must have answers now—even if incomplete. Without them, you won’t survive in five years.
Because new chains, backed by capital, will always chase existing users and liquidity. Every cycle repeats: capital cashes out, a new chain emerges with bigger funding, and VCs spin fresh narratives.
Look at why so many Layer2s exist today—it’s often this game. We can’t avoid participating, but can we extend the narrative beyond the capital tide? Can our tech retain advantages—or at least uniqueness—long enough to endure? Even if, say, in 10 years, Taiko fades, our fallback ambition is that perhaps a new chain emerges, built upon Taiko’s architectural foundation.
I don’t want years of R&D to leave zero technical legacy—to reach 2034 and hear: “BASE was just a capital game,” some profited, others lost, nothing lasting. I want to leave something meaningful behind.
Host: Your thoughts on meme culture?
Daniel Wang: Recently, many have observed a phenomenon: sometimes grinding through tough technical problems yields less token appreciation than a simple meme coin. I don’t oppose meme coins—if I had the skills, I’d try one myself. Not maliciously, nor purely for financial gain. But it’s a fascinating dynamic. Memes are a powerful way to build community. In our community-building efforts, we hope to incorporate fun elements—shared topics for discussion.
Creating memes requires special talent. Given our strong technical focus, our internal team probably can’t lead this effort. But we warmly welcome ecosystem projects to drive it.
If a team wants to build something meme-related, we’re open to collaboration—perhaps co-promoting initiatives.
Provided the intent is positive—if you aim to cultivate a cultural niche or unique community vibe—we’re eager to collaborate with visionary teams or artists.
Host: Are you watching or investing in the RWA sector?
Daniel Wang: Not investing. RWA involves heavy legal and regulatory entanglements—we prefer to avoid such complexities. It feels like a time-waster. Other teams better suited for non-technical domains should earn those profits.
Host: Your view on airdrops?
Daniel Wang: First, projects need visibility. If only the core team and VCs hold your token, no one pays attention. Airdropping to early users generates awareness. Second, initial liquidity is crucial. For example, Taiko block proving requires staking Taiko tokens. Where do validators get them? If only the team holds supply, they must buy from us. But if 1 million users already hold tokens, others can acquire them at fair market prices. So liquidity creation is a key airdrop objective. Third, many users tested on testnets—some “farmers” even provided stress-testing unintentionally. Though their goal is profit, objectively, they helped test the network. Rewarding them via airdrop acknowledges their contribution.
Additionally, mainnet users testing with real funds deserve airdrops too. Hence, Taiko’s airdrop isn’t a one-time event on day one. We’ll continue quarterly airdrops for one to two years post-launch. It’s not just about rewarding testnet users—we’ve had six testnets, possibly more. We’ll keep rewarding those contributors. Even post-mainnet, risks remain or new features may require real-world testing—users risking real capital deserve compensation. So Taiko’s airdrop model differs: it’s ongoing. Ultimately, up to 50% of tokens will go to the community—via airdrops, grants to third-party devs, or foundation support for future core teams. Details aren’t finalized, but testnet participants will receive substantial rewards.
Host: When will Taiko launch its mainnet?
Daniel Wang: Mainnet launch is scheduled for the first half of this year. Internally, we have a timeline, but we’re not disclosing externally yet. Initial liquidity and airdrops will kick off soon after launch—exact dates TBD, but likely May or June, depending on internal testnet progress. Personally, I’m optimistic. We hope liquidity ramps up quickly, drawing users to join and contribute to the network. Earlier is better—delaying risks missing the bull market window.
Host: Your thoughts on Bitcoin L2?
Daniel Wang: There’s a saying that Bitcoin L2s are mostly driven by Chinese teams, with brands ranging from genuine to questionable. Western capital largely ignores them. Yet Chinese miners are wealthy, and supported by mining-related capital, Bitcoin L2s have gained traction. Alternatively, perhaps my perspective is limited—I primarily follow Ethereum’s ecosystem and am less familiar with Bitcoin’s tech stack.
When discussing Ethereum L2s, we typically mean leveraging Ethereum’s consensus while moving computation off-chain, settling via Base-layer mechanisms. Bitcoin, however, has extremely limited programmability. Implementing Taiko-like technology on Bitcoin is practically impossible. I can’t imagine any project designing a scripting language superior to Taiko’s logic. Honestly, I’d rather hold BTC than invest in Bitcoin L2 ventures.
Host: Many Layer2 projects are aggressively growing their ecosystem TVL. How does Taiko view this trend?
Daniel Wang: If I had to pick metrics, I’d prioritize daily or monthly active users and transaction volume over pure TVL. We must recognize we’re in the earliest stage of scaling. Think of Singapore—an island nation reclaiming land. Initially, facilities are inconvenient. To attract residents, you need supermarkets, golf courses, restaurants—infrastructure. People won’t come without it.
Alternatively, Singapore expands outward ring-by-ring from the coast. This approach integrates seamlessly—no isolated islands connected by bridges. Today, Ethereum suffers fragmented liquidity. Suppose $10 billion exists below—each month, chunks get sliced off. The more fragmented, the messier it becomes. Your wallet might support 10 Layer2s, each holding small amounts, with costly transfers between them.
After solving basic scalability, we may need alternative approaches—can we scale without fragmenting liquidity? Can multiple Layer2s share liquidity via cross-chain atomic swaps, minimizing duplicate pools and enabling cheap, seamless bridging? Taiko’s v2 tech aims to solve this fragmentation. But it requires prerequisites—like ultra-fast zero-knowledge proofs (ideally generated in seconds, not minutes or hours). These are long-term solutions.
Therefore, we won’t chase TVL as a primary goal. Our focus is growing active wallet counts, fostering unique applications, and increasing transaction volume—that’s what matters.
Host: How is this market cycle different from previous ones?
Daniel Wang: U.S. equities appear maxed out—I find further upside unlikely. Moreover, the U.S. and other major economies have printed massive amounts of money—global monetary supply is historically high. Even USDT keeps minting—whether fully backed is unclear—but money supply keeps rising. Yet this capital hasn’t flowed into mainland China or Hong Kong stock markets. Where is it going?
Wall Street has opened doors for Bitcoin investment. This bull run differs fundamentally: when traditional outlets for USD dry up, this gap gets filled. The capital pool is enormous. I suspect this cycle will persist longer than expected—the pressure to deploy USD continues. I’m no expert, but I sense this outflow will keep feeding into blockchain.
There’s also a decent chance ETH ETFs get approved by May. With limited BTC supply, pushing ETH next is plausible. The biggest uncertainty lies in the U.S. election. Recent rumors suggest Biden may step aside. Democrats seem weak—no political newcomer can rival Trump. If Trump wins, how will U.S.-China competition evolve? Will U.S. policy shift? Unknown.
Given uncertainties, I advise against full exposure to crypto assets. If a sudden crash occurs, you won’t be shocked.
Global events directly impact crypto—but crypto rarely drives geopolitics or the global economy. Sometimes, after selling some USDT, I ask myself: Is this stablecoin really backed? I don’t know. Even in optimism, doubts linger—what truly holds value? Sometimes I think: hold some RMB too. If bad news hits the USD, RMB might retain value. Never concentrate assets—diversify holdings.
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