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.

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

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.

When used as a data availability layer, blockchains can securely publish their transactions on Celestia, allowing their nodes to verify transactions while remaining slim on a growing blockchain. As a consensus layer, Celestia’s network of validators constantly checks and validates the stored data and produces proofs of data inclusion and availability.

Understanding Blockchain Modularity

Celestia’s mainnet went live on 31 October 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 performed by a blockchain. 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 the infrastructure that is optimized 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 that allows anyone to inspect the blockchain ledger and verify transactions on it.

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 users.

Celestia solves this problem by assuring that the entire transaction data is made available for verification to network participants who do not download and store the data for themselves.

Celestia achieves this by utilizing a technology called data availability sampling (DAS), where light nodes (nodes that do not store the entire data) need to sample only a tiny portion of the block data to verify whether the block has been published.

In DAS, 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 is reached, the light node will consider the available block data.

L2 rollups require data availability solutions like Celestia, as these rollups post “summaries” or “proofs” of transactions to an L1 layer like Ethereum for settlement. If the transactions are not available for verification, the rollup operator can act dishonestly.

Celestia Debuts TIA Token

Celestia released its native cryptocurrency called TIA alongside its main net launch on 31 October 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 a high of $2.5 on its first day of trade.

  • TIA market capitalization stood at over $319.6 million as of 1 November 2023.

  • Over 141 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 designed 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

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 the way blockchains are designed henceforth.

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

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