What is Celestia (TIA) : A Comprehensive Overview

Celestia is a project introducing a modular approach to blockchain technology. In this Celestia blockchain presentation, we will explore how Celestia separates the consensus and data availability layers, providing a more flexible and scalable solution.

Key aspects like Celestia staking help secure the network while offering rewards to participants. This model enables the creation of customized blockchains, all supported by a robust and decentralized infrastructure.

What is Celestia (TIA) ?

Celestia is a modular data availability (DA) protocol that provides the foundational layer for a concept known as “modular blockchains”.

It is fundamentally a minimalistic layer-1 blockchain focused solely on providing the consensus and data availability layers to support other blockchains and applications that run their settlement and execution layers on top of Celestia.

At the time of Celestia’s conception in early 2019, the idea of a modular blockchain was novel. Most blockchains that existed at the time were “monolithic blockchains” like Ethereum and Solana that have their data availability, consensus, settlement, and execution layers all bundled within one stack.

However, Celestia chose to challenge this idea and the limitations of a monolithic blockchain by breaking the blockchain stack down into different components.

In the challenge against monolithic blockchains, Celestia (TIA) became a trailblazer in the broader modular blockchain ecosystem as the first modular data availability protocol to launch in the blockchain space.

It captured a first mover advantage and sparked the launch of multiple settlement and execution layers that all planned to launch on top of Celestia. However, such a paradigm shift quickly led to many competitors.

Celestia Blockchain Technical Analysis

Some of Celestia’s primary competitors as of writing are EigenDA of Eigenlayer and Avail, formerly of Polygon. However, before taking a deeper look at Celestia’s competitors, let's first understand the nuances of Celestia and its technical specifications so we can better compare it to its competitors.

Celestia Blockchain is built using the Cosmos SDK and uses a fork of CometBFT, formerly known as Tendermint, as its consensus mechanism. As a result, it inherits a similar infrastructure to other Cosmos-based chains like Osmosis, Injective, and Sei. It is also a Proof-of-Stake chain that relies on its native token, TIA, for economic security.

Some of the key technical features of Celestia are:

Two-Dimensional Reed-Solomon Erasure Coding Scheme

This scheme protects Celestia from bad actors who may attempt to insert an invalid transaction by adding “erasure code” to Celestia's block data.

Erasure code refers to a second copy of block data that is stored for verification; for example, a block containing one megabyte of data would be duplicated, turning it into a block with two megabytes of data. The second megabyte of data that is copied is called erasure code.

This is important because it acts as a safety mechanism against a malicious block producer that may be attempting to sneak fraudulent transactions onto a blockchain by omitting block data.

By implementing erasure coding, Celestia can ensure that the malicious block producer must omit over 50% of the block data to successfully insert an invalid transaction.

This scheme also facilitates Celestia’s data availability sampling process by only requiring a small sample of data to verify with statistical certainty that the entire block has been published. If data is incorrectly encoded, the network is notified via a data availability fraud proof.

Namespaced Merkle Trees (NMT)

Namespaced Merkle Trees are a key component to how Celestia operates its data availability layer by organizing data into namespaces that are only associated with a single rollup.

By doing so, it essentially isolates rollup nodes from each other, forcing them to only download the data relevant to their specific rollup for execution. This better organizes the data being posted on Celestia.

Namespaced Merkle Trees also facilitates Celestia’s Data Availability Sampling process by enabling more compact and efficient proofs for verification of data availability.

Data Availability Sampling (DAS)

This is a new primitive that specifically allows Celestia light nodes to verify data availability more efficiently by only requiring them to download a small portion of an erasure-coded block in order to verify the entire block.

This is crucial because it allows for a greater number of users to spin up network participating nodes with less upfront hardware costs while simultaneously scaling the data throughput needed for millions of rollups without compromising on security for end users.

Light Node Clients

A device that requires comparatively less expensive hardware to a traditional node that primarily downloads and verifies block headers and executes data availability sampling.

Additionally, Celestia's light node clients do not make an honest majority assumption, meaning they can verify data availability with a high probability even if a majority of consensus nodes are malicious. For cross-chain interactions, this reduces the trust required in the source chain.

Fraud Proofs

Fraud Proofs is a system used by Celestia and other Optimistic Roll Ups like Optimism and Arbitrum that rely on honesty and assume that blocks are valid unless proven otherwise. In Celestia’s case, if a full node detects an invalid block, they can challenge the validity of said block by generating cryptographic evidence against it.

This will initiate a challenge period and verification process by comparing Merkle roots and confirming initial and final state roots through a computational process.

Competitive Analysis of Celestia Blockchain

As stated above, Celestia has two primary competitors that come to mind, EigenDA of Eigenlayer and Avail, formerly of Polygon. However, Celestia is also competing with another protocol as a data availability layer, Ethereum, and specifically, Ethereum Blobs.

Celestia vs. EigenDA & Eigenlayer

EigenDA is a project being built alongside and on top of Eigenlayer. Eigenlayer restaking is a protocol built on top of Ethereum that allows users to restake their ETH-based liquid staking tokens (LSTs) to provide economic security for protocols outside of Ethereum.

Eigenlayer essentially allows protocols looking to bootstrap their own economic security model to borrow it from Ethereum instead, creating a shared security model between Ethereum and the protocol.

EigenDA is an actively validated services (AVS) built on top of Eigenlayer that uses the restaked ETH-LST from Eigenlayer to secure its data availability solution. In this function as a data availability solution, EigenDA is extremely similar to Celestia. EigenDA and Celestia even both employ a Two-Dimensional Reed-Solomon Erasure Coding Scheme to enable data availability sampling for light nodes to verify large blocks efficiently.

However, EigenDA and Celestia have a number of differences that separate the two competitors:

• EigenDA is not a blockchain like Celestia is but rather a data availability service built on top of Ethereum using Eigenlayer’s restaking protocol. As a result, it uses Eigenlayer for consensus about the state of operators and as a callback for consensus about the availability of data. This also makes it so that EigenDA can be easier to implement as it doesn’t need to build its own chain or consensus protocol like Celestia did, rather it just uses Eigenlayer at its core.

• EigenDA uses KZG (Kate-Zaverucha-Goldberg) commitment and KZG multi-reveal proofs during the data availability sampling process as validity proofs instead of fraud proofs. Rather than relying on optimistic fraud proofs, EigenDA uses KZG commitments, a type of polynomial commitment scheme that allows for committing to a polynomial in a way that later allows for efficient proofs about the polynomial's evaluations.
  They are a type of zero-knowledge proof that generally provides a higher level of security because they verify immediately. This also implies a shorter finality time compared to fraud proofs because fraud proofs always have to wait for the challenge period to elapse before finalization. However, zero-knowledge proofs may require more upfront computation to generate proofs while fraud proofs only require computation when fraud is suspected.

• EigenDA incorporates a feature called Proof of Custody, a mechanism designed to protect against a key mode of operator failure in EigenDA when nodes sign off on data items without actually storing them for the required period of time. Proof of Custody makes sure that node operators must routinely compute and commit to the value of a function that can only be calculated if they have stored the data correctly.

• EigenDA uses a Disperser to disperse the data blob after the rollup sequencer creates a block with transactions. The Disperser is responsible for erasure encoding data blobs into chunks, generating a KZG commitment and KZG multi-reveal proofs, and sending the commitment, chunks, and proofs to the operator nodes of the EigenDA network.
  EigenDA also uses a Retriever that queries EigenDA Operators for blob chunks, verifies the blobs are accurate, and reconstructs the original blob. In comparison, Celestia relies on its network of full nodes and light nodes for data distribution and retrieval.

• EigenDA has a feature called Dual Quorum where two separate quorums (one quorum composed of ETH restakers and one quorum composed of stakers of the rollup’s native token) can be required to attest to the availability of data. This ensures that even if one quorum fails, EigenDA is not compromised unless both quorums fail.

• EigenDA maintains a high level of censorship resistance because its rollup nodes can directly disperse and receive signatures from a majority of EigenDA nodes, rather than rely on a single block proposer to order data blobs.

Celestia Blockchain vs Avail Network

Avail was originally a project that began in Polygon Labs in 2020 but separated from Polygon Labs in March 2023 to become its own project. It launched mainnet in July 2023 as its own data availability layer. While this is similar to Celestia, it also has its stark differences.

• Avail was built using a modified Substrate framework that uses the Polkadot SDK. It uses a Nominated Proof-of-Stake (NPoS) mechanism with Substrate's BABE/GRANDPA mechanism for consensus.

• Avail, like EigenDA, uses KZG commitment and KZG multi-reveal proofs for validity proofs, thus relying on zero-knowledge proofs to verify its data availability. As stated before, this generally provides a higher level of security and a shorter finality time compared to fraud proofs because fraud proofs always have to wait for the challenge period to elapse before finalization. However, zero-knowledge proofs also come with the possibility of requiring more upfront computation.

• Avail uses application-specific ordering with unique appIDs to identify individual transitions. The unique appIDs refer to each transaction's origin and purpose within the ecosystem. This differs from Celestia’s use of Namespaced Merkle Trees to organize data within its blockchain.

• The Avail tech stack includes Avail Nexus, a custom zero-knowledge coordination rollup on top of Avail that consists of a proof aggregation and verification layer and a sequencer selection/slot auction mechanism. Avail Nexus is a verification and unification hub that is a bridge between each of the rollups built on top of Avail.

• Avail is incorporating a new security mechanism called Avail Fusion that allows users to stake foreign assets outside of Avail’s native token to secure the network and contribute to Avail consensus. This includes established assets like BTC, ETH, and SOL and emerging rollup tokens created on Avail. This differs from Celestia’s economic security model that relies solely on its native token TIA to secure the network and generate consensus.