What is Celestia (TIA)? Everything You Need To Know

DLty...tCHv

19 Jan 2024

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A modular blockchain with a notorious founder is the new obsession among crypto enthusiasts, its token value up 40% since December 2023.

Now that the Bitcoin ETF fever has broken, investors big and small are already looking for the next hot property. Until the Bitcoin halving shakes things up, many crypto watchers are watching Celestia, a new coin that has made its way into the top 50 with an interesting architecture and a controversial leader.

TIA, the native token of Celestia, went live following an airdrop in October 2023. Since then, it has honored its name, rising skyward with an amazing appreciation of 800%. The token has been one of the best-performing digital assets in the last 30 days, spiking over 10% in the last week, and currently sits near the $18 price range, per CoinGecko.

The green candles have made it a trending topic in the community according to CoinMarketCap, but Celestia has also been hot in the crypto ecosystem due to the controversial background of its founder. CEO Mustafa Al-Bassam, known by his former hacker alias "tFlow," was a core member of the infamous hacking group LulzSec as a teenager.

The group was responsible for high-profile cyberattacks on targets like the CIA and Sony before being arrested in 2011.

Since then, Al-Bassam has been open about his hacking past, and claims his favorite exploit was hacking the Westboro Baptist Church live on a radio show.

Despite his early cybercriminal activities, Al-Bassam went on to study computer science at university and is now building Celestia, a novel modular blockchain system. But with such a resume, it’s obvious that his return is making waves in the community

How is Celestia different?

Celestia is a modular blockchain network that diverges from the typical architecture of blockchains by decoupling consensus from execution. This distinction is critical: in classic blockchains, every node verifies both the consensus (via the block header) and execution (all transactions are valid and result in valid state transitions).

Celestia, however, focuses on verifying the availability of transactions and consensus in the block header without executing the transactions itself.

This means the chain doesn’t validate the content of the transactions but does ensure that they are available for others to validate.

Execution in Celestia occurs in so-called "roll-ups." Unlike monolithic blockchains where all transactions are validated on a single chain, in Celestia, the state transitions are validated on these roll-ups. The architecture employs several key technologies: The base layer uses erasure coding, namespaced Merkle trees, and data availability sampling to allow light clients to efficiently verify transaction ordering and availability without processing everything on-chain.

Rollups can post transactions in namespaces to the base layer, and clients only need to download the data relevant to their application.

By separating consensus and execution, Celestia aims to achieve scalability and modular architecture.

The Celestia model is significant because it doesn't require everything to happen on one chain. By splitting components into different layers, Celestia seeks to allow many rollups and applications to share a base consensus layer efficiently.

This modular approach allows for greater scalability as it offloads the computational burden of executing transactions from the main chain. It also enhances flexibility, allowing different applications to run on their own roll-ups without being constrained by the main chain’s rules or performance. This can lead to a more diverse and robust ecosystem of decentralized applications (dApps).

The team says it expects to be able to handle 1GB blocks soon, allowing them to support global-scale deployment—even though that goal seems like overkill right now.

Understanding Blockchain Modularity

Celestia’s mainnet went live on October 31, 2023, and has been heralded as the start of the “modular era” in the blockchain industry. But what is blockchain modularity, and why is it significant for the crypto world?

Blockchain modularity is a blockchain design concept that separates the essential functions a blockchain performs. Early cryptocurrency blockchains like Bitcoin (BTC) and Ethereum (ETH) perform all the tasks required of a blockchain – data availability, consensus, execution, and settlement. These are known as monolithic blockchains.

Modular blockchains, meanwhile, specialize and optimize to perform a specific function. Blockchain modularity aims to provide optimized infrastructure to help blockchains achieve mass scale. The modular design is also intended to make it easier and faster for developers to deploy new blockchains and decentralized applications.

Here is an example of a modular blockchain system. A layer-two (L2) rollup executes transactions on-chain, makes transaction data available on Celestia, and depends on Ethereum for settlement.

How Does Celestia Work?

Celestia is the world’s first data availability network, but what does data availability mean, and what problem Celestia is solving?

Let us first understand what data availability is. Data availability refers to the confidence that any network participant can download transaction data at any time to verify a block. It is a security measure allowing anyone to inspect the blockchain ledger and verify its transactions.

The main bottleneck here is that nodes are required to download the complete transaction data to independently verify blocks. This is a significant scaling problem as downloading all transaction data of a growing blockchain becomes difficult for normal nodes (only full nodes can download the entire blockchain data).

Celestia solves this problem by utilizing a technology called data availability sampling (DAS).

Using DAS technology, nodes that cannot download the entire blockchain data (called light nodes) need to sample only a tiny portion of the block data to verify whether the block has been published.

Light nodes conduct multiple rounds of random sampling. As more selection rounds are completed, the confidence that the data is available increases. Once a predetermined confidence level (e.g., 99%) is reached, the light node will consider the available block data.

With the help of DAS technology, data availability solutions like Celestia are expected to help blockchains like Ethereum scale without undermining their security. L2 rollups – key to Ethereum’s scaling roadmap – post “summaries” or “proofs” of transactions to the L1 layer for settlement. If the transactions are not available for verification (i.e., data availability), the rollup operator can act dishonestly.

Celestia Debuts TIA Token

Celestia released its native cryptocurrency, TIA, alongside its main net launch on October 31, 2023.

The project had earmarked 60 million TIA tokens (6% of total supply) to be airdropped during genesis to developers, researchers, highly-active stakers, and addresses on Ethereum, Ethereum rollups, Cosmos, and Osmosis.

Here is all you need to know about the TIA token.

Market Data

Celestia’s TIA token debuted on the open market at around $2.

TIA/USDT hit an all-time high of $14.68 on December 14, 2023.

TIA market capitalization stood at over $2 billion as of December 15, 2023.

Over 150 million TIA were in circulation at the time of writing.

Tokenomics

Celestia’s TIA token has a hard cap of 1 billion tokens.

TIA token is designed to inflate at 8% in its first year

TIA inflation is intended to decrease by 10% each year until an annual inflation floor of 1.5% is reached

Uses of TIA

Developers must pay fees in TIA for Celestia’s data availability solutions.

Celestia-based rollups will use TIA as a gas token and currency.

Being a proof-of-stake chain, Celestia will use TIA for staking.

TIA stakers will be able to participate in the decentralized governance of Celestia

Why is Celestia’s collaboration with Polygon Labs significant?

Polygon and Celestia are two important players in Ethereum’s rollup-centric roadmap. The former creates an ecosystem of tools to help developers easily create new blockchains and decentralized applications. At the same time, the latter helps layer two rollups scale by providing off-chain data storage, consensus and verification.

On December 12, 2023, Polygon Labs announced that Celestia’s data availability solution will now be available to Polygon developers. The integration of Celestia’s DA solution with the Polygon Chain Development Kit (CDK) will help developers utilize and customize Celestia’s DA solution as an “easily-pluggable component.”

Several blockchain projects like OKX, Astar, Canto, Gnosis Pay, Plam, and IDEX already use the Polygon Chain Development Kit (CDK) to launch layer two chains on Ethereum.

“The ability to launch a high-throughput ZK-powered Ethereum Layer 2 as easily as deploying a smart contract will do for blockchain adoption what high-speed fiber did for Web2 applications,” said Polygon co-founder Sandeep Nailwal.

Celestia competitors: NEAR, Avail, and EigenDA emerge as rivals

Data availability solutions fit like a glove to Ethereum’s rollup-centric roadmap. It comes as no surprise that several Celestia rivals have come into the foray in recent weeks.

NEAR DA

Near Foundation – the non-profit organization behind L1 blockchain NEAR – introduced the NEAR Data Availability Layer (NEAR DA) at its annual conference on November 8, 2023. Rollup solutions Starknet and Caldera are among the initial users of NEAR DA.

“It’s about reliability and integration with the Ethereum ecosystem. Supporting Ethereum L2s and high-quality projects launching app-chains,” said Near Foundation.

AVAIL

Avail is a DA layer that was formerly known as Polygon Avail. Polygon Labs spun off Avail in March 2023. Polygon co-founder Anurag Arjun heads the project, and their team is based in Dubai, UAE.

Avail’s approach differs from Celestia’s as the former uses a consensus mechanism called BABE and GRANDPA, inherited from Polkadot’s blockchain protocol.

Avail is currently in testnet as of November 9, 2023.

EIGEN DA

EigenDA is a DA layer being built on top of Ethereum by EigenLabs – the company behind Ethereum restaking solution EigenLayer.

EigenDA is specifically designed with the Ethereum ecosystem in mind. EigenDA aims to allow Ethereum L1 stakers and validators to support critical functions other than consensus by allowing them to perform validation tasks for DA layers like EigenDA.

EigenDA is expected to go to testnet in the fourth quarter of 2023.

Will There Be a Second Celestia Airdrop?

Celestia has not made any announcement regarding a second TIA airdrop as of November 9, 2023.

Several clickbait articles are circulating on the internet about “Celestia airdrop Season 2” and “TIA airdrop 2.” Readers are advised to be suspicious of unverified links and announcements on social media platforms and influencer blogs.

Follow Celestia’s official X account and blog for verified information.

Interested parties can acquire TIA tokens on crypto exchanges. Staking TIA tokens is another way to get more TIA tokens.

What Next for Celestia?

Developers at Celestia shed some light on the future of this promising blockchain project. Here is what the crypto community can expect from the team shortly.

In Celestia’s own words:

“Mainnet launch signifies more than just Celestia going live. It’s the start of a new era. An era of verifiability where anyone can run a secure light node. An era of collaboration in which blockchains can openly build on top of each other. An era of abundant blockspace that allows any developer to deploy their own blockchain.”

Increase block support from 2MB at genesis to 8MB, upgradeable via on-chain governance. Aims for 1GB blocks later.

Support for pruning historical transaction data.

Light nodes that verify the L1 state transitions.

Deploying Celestia to Ethereum Mainnet.

Light node network monitoring.

Light nodes on smartphones.

The Bottom Line

Amid a crypto bear market, the blockchain community has once again showcased focus and determination to release a product that can significantly influence how blockchains are designed.

Celestia’s data availability solutions have come at an apt time. It is well poised to support technological innovations in the crypto sector led by Ethereum’s rollup-centric roadmap.

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