What is Celestia (TIA)? Everything You Need to Know Today

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Celestia, the world’s first data availability blockchain network, launched its mainnet on 31 October 2023. The project champions the concept of blockchain modularity which refers to a blockchain design concept that separates the basic functions performed by a blockchain. As of mid-December 2023, TIA has surged over 500% since its October debut.

Celestia, the world’s first data availability blockchain network, launched its mainnet on October 31, 2023. The project also released over $300 million worth of cryptocurrencies called TIA during its launch.

The project has proved to be a major hit among crypto investors, with TIA price surging over 500% since its October 2023 launch.

The project keeps growing: in December 2023, Celestia integrated with Polygon’s chain development kit, bringing its data availability solution to thousands of chains and developers on the Polygon (MATIC) ecosystem.

What is Celestia? Why is the Celestia launch such a significant development for the crypto world? What is the use of TIA tokens? We answer all your Celestia questions and more below.

What is Celestia?

Celestia is a modular blockchain network that provides developers with the infrastructure to build and maintain blockchains. Specifically, Celestia allows other blockchains to use it as a data availability and consensus layer.

Blockchains can securely publish their transactions on Celestia, allowing their nodes to remain slim on a growing blockchain when used as a data availability layer. As a consensus layer, Celestia’s network of nodes check and validates the stored data.

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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.

  • EigenDA

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.

FAQs

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Mensholong Lepcha
Crypto & Blockchain Writer
Mensholong Lepcha
Crypto & Blockchain Writer

Mensholong is an experienced crypto and blockchain journalist, now a full-time writer at Techopedia. He has previously contributed news coverage and in-depth market analysis to Capital.com, StockTwits, XBO, and other publications. He started his writing career at Reuters in 2017, covering global equity markets. In his free time, Mensholong loves watching football, finding new music, and buying BTC and ETH for his crypto portfolio.