Celestia is the world's first modular data availability blockchain network. It was officially launched on October 31st. It claims to be able to expand with more users, allowing anyone to easily create their own blockchain. The blockchain network has also issued a cryptocurrency called TIA worth more than $300 million.
After the news that TIA was listed on major exchanges such as Binance and Coinbase, many investors began to wonder what TIA coin is, what the future holds, and whether it is worth investing in. This article will introduce them one by one.
What is Celestia (TIA)?
If you’re familiar with cryptocurrencies, you’ve undoubtedly heard about the teething issues of layer 1 blockchains like Solana and Aptos, such as network outages. These issues can be traced back to the overall design of such blockchains, with bottlenecks occurring as the network became overwhelmed with complex transactions and user demands.
To address these issues, modular blockchain projects like Celestia and its TIA token have emerged.
Celestia describes itself as a modular data availability (DA) network that can scale securely based on the number of users.
With Celestia, anyone can easily launch their own blockchain in minutes. Based on Celestia, users can also unlock unique applications and features. Celestia's community focuses on creating a collaborative environment with various interconnected chains.
As new users enter the modular blockchain, the value of the entire modular ecosystem increases.
When explaining their mission, Celestia states, “Our vision is rooted in a deep-seated core belief: that communities have an inalienable right to self-organize.”
TIA is Celestia's native token and plays an important role in enabling the network. It can be used to pay for blobspace or as a gas token. In addition, users can stake TIA to participate in consensus and help protect Celestia.
What makes Celestia so special?
Celestia's mainnet was launched on October 31, 2023, and is hailed as the beginning of the "modular era" of the blockchain industry. But what is modular blockchain and why is it so important to the crypto world?
Early cryptocurrency blockchains were monolithic blockchains that built everything on one chain and performed all the tasks required by the blockchain (data availability, consensus, execution, and settlement, etc.), such as Bitcoin (BTC) and Ethereum (ETH). This means that all transactions must go through a consensus mechanism and their data size must be kept within certain limits in order to function properly.
In contrast, modular blockchains provide greater flexibility by separating the responsibilities of handling these different layers.
Modular blockchain is a blockchain design concept that separates the basic functions performed by a blockchain. Developers can break down system components into smaller, more manageable parts. This enables them to easily customize and tweak any aspect of the blockchain without having to overhaul the entire network. With modular blockchain, developers have greater control over the system's functionality, allowing it to quickly adapt to different scenarios and conditions.
Celestia is an example of a modular blockchain system. The second layer (L2) aggregates transactions on-chain, makes transaction data available on Celestia, and relies 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 is Celestia solving?
Let’s 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 the block. This is a security measure that allows anyone to check the blockchain ledger and verify the transactions on it.
The main bottleneck here is that nodes need to download the full transaction data to independently verify the block. This is a major scaling issue because downloading all the transaction data of the growing blockchain becomes difficult for ordinary users.
Celestia solves this problem by ensuring that the entire transaction data is verifiable by network participants who do not download and store the data themselves.
Celestia achieves this by leveraging a technique called Data Availability Sampling (DAS), where light nodes (nodes that do not store the entire data) only need to sample a small portion of a block’s data to verify that the block has been published.
In DAS, light nodes perform multiple rounds of random sampling. As more rounds are completed, the confidence that the data is available increases. Once a predetermined confidence level is reached, the light node will consider the block data available.
L2 rollups require data availability solutions like Celestia because these rollups publish “summaries” or “proofs” of transactions to L1 layers like Ethereum for settlement. If transactions cannot be verified, rollup operators may act dishonestly.
What is TIA Coin?
Celestia released its native cryptocurrency called TIA on October 31, 2023, concurrently with its mainnet launch.
According to Celestia’s white paper, TIA tokens will have the following uses:
1. Celestia-based Rollups will use TIA as Gas token and currency
A core principle of Celestia's vision is to simplify blockchain deployment, making it easy for anyone to launch and deploy their own blockchain. With TIA tokens, developers don't need to issue tokens to supplement the launch of their blockchain. Just like ETH on Ethereum-based Rollups, developers can choose to use TIA as a gas token and currency to quickly launch their chain. In doing so, developers can focus on creating applications or execution layers without having to worry about the creation and issuance of tokens.
2. Developers must pay for Celestia’s data availability solution in the form of TIA
TIA tokens are key for developers to build and interact with Celestia. To publish data on Celestia and use it for data availability, aggregate developers submit PayForBlobs transactions, which contain typical transaction information such as sender identity, data to be provided, data size, namespace, and signature. These transactions require a fee and are paid in TIA tokens.
3. As a proof-of-stake chain, Celestia will use TIA for staking
As a permissionless network based on CometBFT and Cosmos SDK, Celestia uses a proof-of-stake consensus mechanism to secure its network. Like other Cosmos networks, users can help secure the network by delegating their TIA tokens to Celestia validators to receive part of the validator's staking rewards. It is worth noting that Celestia supports in-protocol delegation and will start with an initial set of 100 validators.
4. TIA stakers will be able to participate in Celestia’s decentralized governance
For many blockchain projects, the centralization of founding developers can be a red flag. Fortunately, Celestia favors decentralized governance in terms of overall decision-making. Unlike some governance tokens that require staking to unlock voting rights, users only need to hold TIA tokens to have voting rights and submit governance proposals to change existing network parameters, fund ecosystem initiatives, and manage community pools. The pool will also receive 2% of all Celestia block rewards.
Celestia Airdrop: 60 million (6%) TIA tokens distributed
Cryptocurrency traders and enthusiasts have long been excited about the launch of the Celestia token since the project was launched in 2019. This trend was further amplified by the highly anticipated Celestia Airdrop, where 60,000,000 TIA tokens (6% of the total supply) were distributed to a wide range of active users on the blockchain network. This Genesis Drop has undoubtedly enhanced people’s excitement about Celestia becoming the next big thing in the cryptocurrency space and will include users such as:
Active users of the top 50% of the top 10 Ethereum rollups by TVL with balances of at least $50 based on a snapshot taken on January 1, 2023. Eligible rollups include but are not limited to Optimism Mainnet, Arbitrum One, Arbitrum Nova, Starknet, and Loopring Protocol.
Based on a snapshot taken on January 1, 2023, Cosmos Hub and Osmosis stakers and delegators received at least $75.
Various public GitHub contributors to the Celestia codebase across Modular Summits and Celestia's Modular Fellows program.
TIA Token Economics
Does Celestia’s TIA token pique your interest? Here are some token economics to keep in mind:
Celestia’s TIA token has a total supply of 1 billion tokens, with an initial circulation of 14.1% (141,000,000 TIA).
20% of the total TIA supply is allocated to the public and will be used for Celestia’s testnet incentives and future initiatives.
The inflation rate of TIA tokens in the first year is designed to be 8%.
TIA inflation is designed to decline by 10% each year until it reaches an annual inflation floor of 1.5%.
TIA token distribution:
Genesis Airdrop: 7.4%
Community rewards: 12.6%
R&D and Ecosystem Fund: 26.8%
Early investors: 35.6%
Team: 17.6%
What is the future of Celestia (TIA)?
Celestia’s developers have shed some light on the future of this promising blockchain project. Here’s what the cryptocurrency community can expect from the team in the short term.
“The launch of the mainnet means more than just Celestia going live. It’s the beginning of a new era. This is an era of verifiability where anyone can run a secure light node. This is an era of collaboration where blockchains can openly build upon each other. This is an era of abundant blockspace, allowing any developer to deploy their own blockchain.”
Summarize
Celestia is a new technology that powers, scales, and secures Web3 applications. It introduces a new blockchain architecture called modular blockchain to solve the scaling issues of today’s blockchains.
Celestia's (TIA) recent market performance and growing interest show great potential. While the optimistic scenario suggests substantial growth, it is critical for investors to remain calm and consider market volatility. The future looks bright for TIA, but as with any investment, caution and continued monitoring are recommended.
Finally, let me say a few words. The author of TIA feels that it will continue to hit new highs. 130 million in circulation on the market have already been pledged with 120 million. Perhaps we will soon see TIA reach more than $10.
