The introduction of Celestia’s new “data availability” network this week coincided with the distribution of the project’s TIA tokens through an airdrop,
which had been eagerly awaited in the crypto sector for the past year.
In 2019, Mustafa Al-Bassam pursued his Ph.D. studies in computer science at University College London, during which he released a research paper under the title “LazyLedger.”
Intended for readers with a keen interest and a penchant for complexity, the paper elaborated using intricate terminology and Greek mathematical symbols on a groundbreaking concept at the time: the decoupling of functions within a distributed ledger, particularly the querying of data by users, into discrete “application layers.” This innovation aimed to reduce the overall resources required for the operation of the primary blockchain.
Today, Al-Bassam holds the position of CEO at Celestia Labs, the leading driving force behind the Celestia project. The project recently unveiled itself as a novel “data availability” network, marking a significant milestone in the blockchain landscape. In numerous statements, this achievement has been celebrated as the dawn of a fresh “modular era” in blockchain design.
One of the anticipated primary applications for Celestia is to alleviate the Ethereum blockchain’s responsibility for housing and transmitting vast amounts of data generated by the rapidly expanding “layer-2” networks, commonly referred to as “rollups.” These networks offer users the ability to execute transactions more affordably and swiftly.
Christine Kim, who serves as a vice president of research at the cryptocurrency company Galaxy, outlined in a report dated October 19 that the concept revolves around Celestia serving as the foundational infrastructure for a remarkably scalable and interoperable network of rollups. Crucially, it is envisioned that this modular approach can be realized without compromising decentralization or security.
In the world of cryptocurrency, as expected, the major spotlight in most news reports and social media discussions was the much-hyped airdrop conducted by the project on Tuesday. During this event, approximately 60 million of its native TIA tokens, equivalent to around 6% of the total supply, were distributed. The final count revealed that there were 191,391 claims for these tokens. Furthermore, the project has plans to allocate an additional 140 million tokens for upcoming initiatives.
The airdrop generated such considerable anticipation that, in the period leading up to the distribution, traders engaged in speculation about the token’s price through pre-launch futures contracts. As reported by CoinMarketCap, the TIA token has swiftly found its place on numerous cryptocurrency exchanges, including prominent platforms such as Binance, KuCoin, Kraken, Bybit, and MEXC.
The TIA airdrop ranks among the largest in the cryptocurrency industry in the past year. However, it’s crucial to note that a substantial airdrop doesn’t automatically ensure the long-term success of a project. Success in the crypto world is determined by various factors beyond initial distributions, such as technology, adoption, and community support.
Aptos achieved a market capitalization of $2.9 billion upon the launch of its main network, whereas Sui made its debut with a market capitalization of $750 million. However, despite these impressive token valuations, both blockchains have struggled to attract a significant amount of capital, with the total locked funds on either network failing to exceed $100 million.
What does Celestia do?
On Tuesday, X (previously known as Twitter) buzzed with enthusiastic messages. One user exclaimed, “We’ll hit $10 shortly,” regarding TIA’s price. Meanwhile, another contributor inquired about the best place to offload the tokens received through the airdrop. Jesse Pollak, the individual responsible for Coinbase’s innovative foundational layer-2 blockchain built on top of Ethereum, extended his warm congratulations.
This fervor might have concealed the fact that comprehending the intricacies of the project is quite challenging.
The term “data availability” is so obscure that it left even Dankrad Feist, an Ethereum Foundation researcher renowned for coining the complex blockchain concept of “danksharding,” admitting that he recently found it overly perplexing.
Sean Farrell, a cryptocurrency analyst at FundStat, broke it down for investors in a note he shared on Tuesday: “Data availability enables network nodes to download, store, and provide access to transaction data for verification.”
The core concept behind Celestia is to address the scalability and reliability challenges that have been persistent issues for all-encompassing blockchains like Ethereum and Solana. This is achieved, in part, by establishing a fresh platform for hosting and facilitating access to the vast volumes of data generated by the rapidly expanding “layer 2” networks that operate on top of the foundational “layer 1” blockchains.
The significance of data availability in relieving Ethereum’s workload is so pronounced that two competing projects, Avail and EigenDA, are also dedicated to addressing this aspect alongside Celestia. Avail is led by Anurag Arjun, a former co-founder of Polygon, while EigenDA is a project under EigenLayer, overseen by Sreeram Kannan, who serves as an associate professor at the University of Washington.
How does Celestia work?
According to the project documentation provided by Celestia, the TIA tokens play a fundamental role in the way developers construct applications on the initial modular blockchain network.
In order to leverage Celestia for data availability, developers of rollup solutions can initiate a specific type of transaction referred to as “PayForBlobs” on the network. This transaction incurs a fee, which is expressed in TIA tokens.
Modular blockchains are engineered with an emphasis on utilizing dedicated channels to enhance speed and execution. This stands in contrast to monolithic blockchains, which can only achieve scalability by compromising decentralization and security.
“As opposed to a single blockchain handling a multitude of tasks, modular blockchains specialize and optimize their operations for a specific function,” explained Ekram Ahmed, a spokesperson for Celestia, in a statement to CoinDesk.
Al-Bassam, the ex-Ph.D. student who subsequently established Celestia, co-authored three scholarly works alongside Ethereum’s renowned founder, Vitalik Buterin. In a presentation earlier this year, Buterin endorsed Celestia as a scaling solution for Ethereum rollups.
What sets Celestia apart from other blockchains?
Ahmed responded, “Data availability sampling addresses the query,” and then emphasized the significance of data verification within a blockchain. “Typically, users of a monolithic blockchain need to download all data to verify its availability,” he added.
Presently, this issue might not be at the forefront of the concerns for Ethereum or Solana users, potentially because neither blockchain has yet achieved widespread scalability. Ethereum, for example, typically handles approximately 1 million transactions per day, according to ycharts, while Solana processes only a fraction of that.
In the past week, fund management company VanEck presented a scenario in which Solana could potentially accommodate 100 million users. If blockchains successfully scale to such an extent, projects like Celestia are striving to guarantee that data verification and validation are maintained for each blockchain node.
Ahmed explained, “Modular blockchains address this issue by enabling users to validate extensive data blocks through a technology known as data availability sampling.”
The standout feature of Celestia is its data availability sampling (DAS), which serves as a method for validating all the data present on a blockchain.
The target audience for Celestia includes individuals operating what are known as “light nodes.” These nodes can function on modest computing devices, eliminating the need for substantial computational resources or extensive data storage capacity. Light nodes can then verify data availability without the necessity of downloading the entire data for a given block. They achieve this by conducting multiple rounds of random data sampling, and with each successive round, their confidence in data availability increases.
Ahmed concluded, “When a light node attains a specified confidence level, such as 99%, it will deem the block data as confirmed to be available.”
In the future, if Al-Bassam’s vision becomes widespread, everyday cryptocurrency users may interact with Celestia without even realizing it. However, comprehending all the intricate details of the technology might remain a more challenging prospect.
