Introduction

The Blockchain Trilemma

Due to its decentralization, immutability, and transparency, blockchain technology has become the foundation for innovation across various industries. However, the well-known Blockchain Trilemma has consistently challenged its adoption—the difficulty of simultaneously achieving decentralization, security, and scalability. These three factors are inherently interdependent, making it challenging for blockchain systems to optimize all three at once.

• Decentralization ensures that the blockchain network operates independently of any single controlling entity. However, a highly decentralized network can lead to reduced transaction efficiency.
• Security is essential for protecting the network against malicious attacks, but enhancing security often requires additional computational resources, which can slow down transaction processing.
• Scalability focuses on improving transaction speed and capacity, yet achieving this often comes at the cost of either decentralization or security.

As blockchain applications expand, finding an optimal balance within the trilemma has become a key challenge for developers and researchers.

Diagram: The Blockchain Trilemma (Source: IT Home)

Ethereum’s Roadmap

Ethereum co-founder Vitalik Buterin has set an ambitious goal for Ethereum’s next phase of network scaling: exceeding 100,000 transactions per second. In an October 2024 blog post, he reflected on the early days of blockchain technology, highlighting two primary scaling strategies outlined in Ethereum’s roadmap: Sharding and Layer 2 (L2) protocols.

• Sharding reduces the burden on individual nodes by allowing them to verify and store only a small subset of transactions, similar to how peer-to-peer networks like BitTorrent operate. This approach enhances network scalability by distributing workload efficiently.
• Layer 2 protocols build on top of Ethereum’s mainnet, keeping data and computation off-chain while inheriting Ethereum’s security guarantees.

Diagram: The Surge – 2023 Roadmap Edition (Source: Vitalik’s Blog)

Significant progress has been made in Ethereum’s scaling strategy throughout 2024. However, several challenges persist:

• Rollups require substantial on-chain data bandwidth, meaning they still depend heavily on Ethereum’s mainnet resources.
• Centralized sequencers in rollups pose risks of transaction censorship and Miner Extractable Value (MEV) exploitation.
• The fragmented Layer 2 ecosystem forces developers to navigate interoperability challenges and decision-making complexities.

Vitalik’s blog emphasizes that the current priority is to refine the rollup-centric roadmap while ensuring the resilience and decentralization of Ethereum’s Layer 1 (L1). In this context, new scaling innovations such as Based Rollups and Preconfirmation have emerged:

• Shared Sequencers: Provide a unified transaction ordering service for multiple Layer 2 chains. However, as third-party operators, they introduce trust and incentive concerns.
• Based Rollups: Rely on Ethereum’s L1 for transaction sequencing, simplifying the architecture and strengthening decentralization. However, their transaction finalization speed remains constrained by Ethereum’s block time.
• Preconfirmation: Offers preliminary transaction confirmation by monitoring mempool activity before official inclusion in a block. This significantly reduces user wait times, unlocking new possibilities for improving efficiency and user experience.

Today’s article will delve into the technical principles of Preconfirmation, its use cases, and how it helps strike a better balance between efficiency and decentralization in blockchain networks.

What is Preconfirmation?

The Concept of Preconfirmation

Preconfirmation can be understood as a reliable commitment to a transaction before it is officially confirmed on the blockchain. This mechanism provides an early confirmation signal, reducing user wait times and improving transaction efficiency. It is particularly useful in high-volume or time-sensitive scenarios where rapid feedback is crucial.

Preconfirmation is similar to real-world situations where a preliminary commitment is given before final confirmation:

• Restaurant Reservations: When you book a table, the restaurant confirms your reservation, but the final confirmation happens when you arrive. This is similar to preconfirmation—a reliable preview of a future execution.
• Online Shopping Orders: When you place an order, the status might show “Processing,” meaning the merchant has received your request and reserved stock. However, final confirmation requires payment verification and shipment. This mirrors blockchain preconfirmation, where a transaction is tentatively approved but still requires final validation.
• Flight Booking: After purchasing a ticket, your seat is temporarily reserved, representing a preconfirmation. The final confirmation happens during check-in. Similarly, preconfirmation in blockchain provides an initial commitment to a transaction without being its final confirmation.

Bitcoin’s 0conf Concept

In the early days of blockchain, the Bitcoin community explored a similar concept called “0conf” (zero confirmation transactions). This approach allowed transactions to be temporarily considered valid before being fully confirmed on the blockchain.

0conf was particularly useful for fast payment scenarios requiring immediate transaction processing. However, due to double-spending risks, where malicious actors could broadcast conflicting transactions, 0conf never became a mainstream solution.

Ethereum’s Chain-Based Preconfirmation

In 2023, blockchain researcher Uri Klarman extended the preconfirmation concept to Ethereum, introducing the idea of “chain-based preconfirmation.” The key innovation was that future preconfirmers inherit the previous preconfirmation records, forming a continuous preconfirmation chain that enhances transaction reliability.

That same year, the Primev team further advanced preconfirmation technology by designing mev-commit, a platform aimed at coordinating Miner Extractable Value (MEV). By integrating an auction mechanism, mev-commit made transaction preconfirmation more efficient and reliable.

What Problems Does Preconfirmation Aim to Solve?

In blockchain technology—particularly in Rollup-based systems—transaction confirmation inefficiencies have long been a major pain point for user experience. When users submit transactions on Layer 2 (L2), the final confirmation depends on posting data back to Layer 1 (L1). This process introduces several challenges, especially in high-frequency trading or decentralized finance (DeFi) scenarios, such as:

• Transaction Delays and Confirmation Uncertainty
  In Rollup mechanisms, the final confirmation of a user’s transaction requires waiting for L1 block generation. This process can be delayed due to network congestion or transaction sequencing issues. For example, in Optimistic Rollups, the challenge window typically lasts seven days to prevent fraudulent transactions, causing withdrawal delays and reducing liquidity. While ZK Rollups provide faster confirmation, generating zero-knowledge proofs requires significant computational resources.

• Losses in High-Frequency Trading
  DeFi and arbitrage users rely on transaction immediacy to seize market opportunities. However, when transaction finality takes too long or when transaction order changes, users may suffer financial losses.

• Trust Issues with Centralized Sequencers
  Most Rollups rely on centralized sequencers to order transactions, which introduces potential risks such as transaction censorship and unfair transaction execution due to Miner Extractable Value (MEV).

The Preconfirmation Solution

Preconfirmation provides an initial confirmation before transactions are officially recorded on-chain, addressing the issues mentioned above:

• Reduces user wait time – Offers real-time transaction status feedback, minimizing uncertainty caused by delays.
• Enhances user confidence – Allows users to track transaction progress more transparently, increasing trust in the network.
• Improves transaction sequencing transparency – Commits to transaction order in advance, mitigating financial losses caused by order changes.

Differences Between Preconfirmation and Traditional Confirmation Mechanisms

Basic Concept and Operation

• Traditional Confirmation Mechanism:

  • A transaction is first submitted to the mempool, and then miners wait to package it into the next block. The transaction is only considered officially confirmed once the block is validated through a consensus mechanism (such as Proof of Work (PoW) or Proof of Stake (PoS)). This process requires waiting at least one block generation time.

• Preconfirmation:

  • After a transaction enters the mempool, its likelihood of being included in the next block is predicted based on factors such as gas fees, priority, and network conditions. Users can receive an initial confirmation signal within a few seconds, without waiting for the full block generation process.
  • To improve reliability, Layer 2 (L2) centralized sequencers (e.g., Rollups) can provide commitments, or on-chain preconfirmation mechanisms can be utilized.

Confirmation Speed

• Traditional Confirmation Mechanism:
• Transaction confirmation requires waiting for block generation and multiple confirmations.
• Once a transaction is included in a block, that block becomes part of the blockchain.
• As more subsequent blocks are linked to it, its confirmation count increases, making the transaction more secure.
• Network congestion or consensus delays can slow down the process.

Confirmation Reliability

• Traditional Confirmation Mechanism:

  • High reliability – Once a transaction is confirmed multiple times, it is practically irreversible and immutable, making it ideal for high-security applications.
  • Finality assurance – Confirmation is backed by the blockchain’s consensus mechanism, and once a transaction reaches a certain number of confirmations, it is nearly impossible to reverse.

• Preconfirmation:

  • Initial commitment only – It provides a prediction that the transaction is “likely” to be included in the next block but does not guarantee finality.
  • Risk of reordering or cancellation – If network conditions change or the sequencer behaves differently, the transaction may still be dropped or reprioritized. Suitable for high-speed scenarios where finality is less critical.

Technology and Implementation Costs

• Traditional Confirmation Mechanism:
  • Relies entirely on the blockchain’s consensus mechanism.
• Preconfirmation:
  • Requires extensive mempool data analysis, transaction ordering algorithms, and trusted sequencers.
  • Needs fallback mechanisms in case preconfirmation fails.

Table: Comparison of Traditional Mechanism and Preconfirmation (Source: Self-compiled)

Case Study: Preconfirmation in Taiko

Enhancing Efficiency and Decentralization with Taiko’s Preconfirmation Mechanism

Taiko is a decentralized ZK-EVM Rollup project built on Ethereum. Its core design focuses on achieving full Ethereum compatibility while leveraging a preconfirmation mechanism and a decentralized proposer system to address transaction efficiency and fairness issues.

(Source: Taiko Official Website)

Taiko Overview

• Seamless User Experience – Taiko’s EVM is fully compatible with Ethereum, requiring no recompilation or changes to development tools. Developers can use existing Ethereum smart contracts and tools without modification.
• Community-Driven – Taiko is fully open-source, allowing the community to freely use and modify its code, promoting decentralization and community participation.
• Security-First Approach – As an Ethereum-based Rollup, Taiko features a permissionless, decentralized network of proposers and provers, inheriting Ethereum’s security and decentralization.
• Ethereum-Based Sequencing – Taiko uses an Ethereum-based transaction sequencing mechanism, where Ethereum validators handle transaction ordering. This ensures simplicity while maintaining Ethereum’s liveness and trust-minimized neutrality.

Taiko’s Preconfirmation Mechanism

Taiko’s Based Sequencing mechanism allows Ethereum validators to directly participate in Layer 2 (L2) transaction ordering. Validators can bridge ETH to the Taiko network using Taiko’s bridging service to provide instant preconfirmation, enhancing transaction immediacy and user experience while maintaining decentralization and security.

Taiko’s Based Contestable Rollup (BCR) Model

Taiko adopts the Based Contestable Rollup (BCR) model, designed to ensure fairness and transparency through an open and permissionless system:

• ✅ Fully Permissionless & Decentralized – Anyone can participate in the Taiko system without special permissions, ensuring a high degree of decentralization.
• ✅ Competitive Proposer Model – Proposers compete for Maximal Extractable Value (MEV) and other economic incentives, while also taking on operational responsibility, improving system efficiency and stability.
• ✅ Ethereum-Integrated Sequencing – Taiko eliminates the need for a centralized sequencer by sharing the same role as Ethereum block proposers, fully relying on Ethereum’s infrastructure.
• ✅ Leader Election Mechanism – At any given time, only one proposer is elected as the leader, granting them exclusive rights to finalize a block. This avoids resource waste and conflicts.

Note: Currently, Taiko uses SGX as a Trusted Execution Environment (TEE) proof, RiscZero and SP1 for Zero-Knowledge Proofs (ZKP), and Guardian (multi-signature verification) by Taiko Labs. More details can be found in Taiko’s documentation.

Example: Taiko’s Based Contestable Rollup Process

Process Overview:

Block Proposal – A proposer submits a new block.

Primary Proof Submission – A first-tier prover (e.g., using SGX TEE) submits a validity proof for the block and provides a TAIKO deposit as collateral.

Cooling-Off & Challenge Period (~4 hours) – During this time, anyone can challenge the validity proof by submitting their own deposit (e.g., “Cindy” in the diagram).

Advanced Proof Verification – A higher-tier prover (e.g., using ZKPs from RiscZero or Succinct) verifies the correctness of the primary proof.

Outcome & Incentives:

• If the primary proof is correct → The primary prover gets their deposit refunded and earns a reward, while the challenger loses their deposit.
• If the primary proof is incorrect → The challenger gets their deposit refunded and earns a reward, while the primary prover loses their deposit.

This multi-layer proof mechanism ensures that anyone can challenge proofs at different levels, enhancing the security and decentralization of the system.

Diagram: Example of Taiko’s Contestable Rollup Process (Source: Taiko’s Contestable Rollup Documentation)

Conclusion

Preconfirmation technology is emerging as a key solution to improving blockchain transaction efficiency and user experience. While traditional transaction confirmation mechanisms provide high security and reliability, they suffer from long delays and low efficiency, making them unsuitable for high-frequency trading and real-time applications such as payments. Preconfirmation, with its rapid feedback and preliminary commitment approach, helps mitigate these limitations, offering users a more immediate and transparent transaction experience.

For example, the Taiko project integrates a competitive Rollup model to balance decentralization and efficiency. Additionally, Taiko’s multi-layer proof structure and leader election mechanism ensure fairness and security through economic incentives and transparent competition, serving as a valuable reference for future blockchain scalability designs.

However, preconfirmation is not a perfect solution. The reliability of initial confirmations and the risk of transaction revocation still require further technical optimizations and fallback mechanisms. Continued innovation is necessary to enhance transaction experiences while addressing the blockchain trilemma of decentralization, security, and scalability.

Beyond mere technical innovation, preconfirmation is a trust-building tool that can accelerate blockchain adoption. As preconfirmation technology expands beyond high-frequency trading into everyday payments, blockchain will become more integrated into daily life, helping to realize the vision of global financial inclusion.