What is Taiko’s Shasta Upgrade: Targeting Up to 22x Rollup Cost Reduction Through Minimalist Architecture

Taiko is preparing to deploy its Shasta upgrade, a full redesign of its rollup protocol that aims to significantly reduce costs while simplifying the system architecture. The upgrade focuses on restructuring how Taiko proposes, proves, and finalizes blocks on Ethereum, with the stated goal of making based rollups cheaper, easier to audit, and easier to operate without compromising security or decentralization.

Shasta replaces much of the existing protocol logic with a minimalist design built around three core contracts. According to Taiko, early benchmarks show that this approach can reduce rollup proposing costs by roughly 22 times and proving costs by about 8 times compared with the previous version, known as Pacaya. The upgrade also positions Taiko closer to the Ethereum researchers' definition of Stage 1 rollup maturity.

This article explains what the Shasta upgrade is, how it works, and why its architectural choices matter for the state of based rollups.

Taiko and the design goals behind Shasta

Taiko is a based rollup designed to inherit Ethereum’s security and liveness directly from Layer 1. Based rollups differ from sequencer-based designs by relying on Ethereum block production rather than a centralized or semi-centralized sequencer. The tradeoff has historically been higher costs and slower confirmation times.

Shasta was designed from first principles after running Taiko in production. The team cites two primary objectives: simplicity and efficiency. A third guiding principle is moving complexity off-chain, relying on modern zk proving systems rather than extensive on-chain enforcement.

The core assumption behind Shasta is that simpler protocols are easier to reason about, audit, and implement without errors. By reducing the amount of logic that must be executed and verified on Ethereum, Taiko expects to lower operational costs for proposers and provers, thereby reducing user fees.

Three contracts instead of a complex framework

At the center of Shasta is a minimalist architecture consisting of three contracts: Inbox, Anchor, and SignalService. Earlier versions of the protocol relied on a larger set of contracts, wrappers, and on-chain accounting mechanisms. Shasta removes most of that structure.

Inbox

The Inbox contract serves as the primary rollup contract on Layer 1. It enforces the core rules of the rollup through two functions.

The Propose function accepts blob data, processes forced inclusions when they are due, updates the core state, and emits events for provers. It deliberately avoids complex on-chain checks for protocol-wide rules such as gas limits or timestamps. These checks are derived off-chain and enforced during proof generation.

The Prove function handles bond processing if a proof is submitted late, calls the zk verifier, and finalizes the chain. Finalization includes syncing Layer 1 state to enable withdrawals and Layer-2 to Layer-1 messaging.

A key design change is the move to sequential proofs. Under this model, blocks are proven and finalized strictly in order. This eliminates the need for on-chain proof conflict detection and removes separate aggregation mechanisms that previously added cost and complexity.

Anchor

The Anchor contract runs as the first transaction of every Layer 2 block. Its sole purpose is to inject Layer 1 state into Layer 2. This enables deposits, Layer-1 to Layer-2 messaging, and future mechanisms such as pre-confirmation slashing commitments.

Shasta removes additional responsibilities that were previously assigned to the Anchor. By narrowing its role, the contract becomes easier to audit and less expensive to execute.

SignalService

SignalService manages cross-chain messaging and token transfers between Ethereum and Taiko. Shasta simplifies this contract by removing complex structures such as HopProofs while preserving backward compatibility. Existing bridges and intent providers do not need to upgrade to continue functioning.

Measured performance improvements

Taiko has published internal benchmarks that show substantial reductions in gas usage after Shasta.

Before the upgrade, proposing new blocks on Taiko could cost up to one million gas. The cost scaled with the number of Layer 2 blocks in a batch because metadata for each block was posted on-chain. This increased proposer costs and ultimately user fees.

Under Shasta, proposing costs drop to approximately 45,000 gas once the initial warm-up period is complete and the proposal ring buffer is full. This represents an estimated 22 times reduction in gas usage for block proposals.

Proving costs also decline significantly. Under Pacaya, producing a batch costs roughly 500,000 gas. About half of that cost came from zk proof verification, with the remainder consumed by execution logic.

With Shasta, execution costs fall to around thirty thousand gas and remain nearly constant regardless of how many batches are proven. This favors aggregation, allowing multiple batches to be verified at nearly the same cost. Overall, this translates to roughly an 8 times reduction in gas costs for proving.

Taiko states that execution costs remaining flat with batch size make the protocol 5-15 times more efficient for proposers than other popular zk rollups under comparable conditions.

Why simplicity changes the cost structure

The largest efficiency gains in Shasta come from removing code rather than optimizing individual functions. Sequential proofs eliminate entire subsystems related to conflict detection and resolution. Moving protocol-wide checks off-chain reduces the number of on-chain execution paths. Removing wrappers and abstractions lowers gas usage and reduces the surface area for bugs.

From a security perspective, fewer lines of code make audits more straightforward. From an operational perspective, simpler contracts are easier to maintain and upgrade.

Taiko argues that Ethereum-grade security does not require complex on-chain enforcement if correctness can be proven cryptographically. Advances in zk proving have reduced both proving latency and cost, making it practical to shift responsibility away from Layer 1 execution.

The state of based rollups

Based rollups were proposed to scale Ethereum while preserving its core properties, including decentralization, censorship resistance, and credible neutrality. Unlike sequencer-based designs, based rollups do not rely on a privileged actor to order transactions.

Interest in based sequencing increased toward the end of 2024 and early 2025. That enthusiasm later cooled due to two persistent criticisms.

The first was speed. Without preconfirmations, users had to wait at least one Layer 1 slot for confirmation. Preconfirmations have already demonstrated that this issue can be addressed. Fully decentralizing them and onboarding validators remain implementation challenges rather than research problems.

The second criticism was economic feasibility. Based rollups were seen as too expensive. Preconfirmations reduced costs by reducing how often proposers post to Layer 1, but Shasta directly targets the remaining inefficiencies. According to Taiko, the new design allows based rollups to be cheaper than most zk rollups. With shared infrastructure, they could be cheaper than many Layer 2 systems at similar usage levels.

Moving toward Stage 1 rollup maturity

Ethereum researchers often describe rollup maturity in stages. Stage 1 generally implies that the system provides strong decentralization guarantees, permissionless participation, and a credible path to minimizing full trust.

Shasta advances Taiko toward this stage by simplifying the protocol and enabling permissionless preconfirmations. By reducing proposer and prover costs, the upgrade lowers the barrier to participation. This supports decentralization by making it economically viable for more actors to run infrastructure.

Testing and deployment timeline

Shasta has been under development for several months and is currently running on internal development networks. Preconfirmation providers are testing their software to ensure compatibility with the new protocol design.

Taiko plans to deploy Shasta to the Hoodi testnet in the coming weeks. This phase will allow broader testing and feedback from developers and users. After successful testing, the team intends to submit the upgrade to the Taiko DAO for approval. Mainnet activation will depend on community governance and final verification results.

Why this upgrade matters

Shasta does not introduce new features aimed at end users. Instead, it restructures the protocol's foundation. The upgrade demonstrates that significant cost reductions can be achieved through architectural restraint rather than additional complexity.

By focusing on three contracts and moving checks off-chain, Taiko reduces gas usage, simplifies audits, and aligns based rollups more closely with Ethereum’s original design goals. The result is a protocol that is easier to understand and cheaper to operate while maintaining the same security assumptions.

Conclusion

The Shasta upgrade represents a fundamental redesign of Taiko’s rollup protocol. By reducing the system to three core contracts, adopting sequential proofs, and shifting complexity off-chain, Taiko achieves measurable cost reductions without weakening security or decentralization. Proposing costs drop by roughly 22 times, proving costs fall by about 8 times, and execution efficiency improves relative to other zk rollups.

Beyond performance metrics, Shasta shows how minimalist architecture can strengthen trust. Fewer contracts, less on-chain logic, and clearer responsibilities make the protocol easier to audit and operate. As Taiko moves toward testnet deployment and DAO approval, Shasta stands as a concrete example of how based rollups can become both economically viable and aligned with Ethereum’s core principles.

Source:

• Taiko Paragraph: The Shasta Upgrade