How does Celestia operate?

Celestia introduces a groundbreaking approach to blockchain design, prioritizing scalability, adaptability, and compatibility, allowing developers to create applications for mass adoption. Data availability plays a pivotal role in a blockchain's security by ensuring transparency in transaction ledgers. The challenge lies in the need for nodes to download the complete transaction data to independently validate blocks, posing a significant scaling issue. Celestia effectively addresses this challenge by making the entire transaction data available for verification to network participants who do not need to download and store the data themselves.

This is achieved through the utilization of a technology known as data availability sampling (DAS), where lightweight nodes (nodes that don't store the entire dataset) only need to sample a small portion of block data to verify the publication of a block.

L2 rollups, a type of blockchain solution, require data availability solutions like Celestia. Rollups publish transaction data to an L1 layer, such as Ethereum, for settlement. If these transactions are not accessible for verification, the rollup operator might behave dishonestly.

What are rollups?

Rollups are a relatively new category of blockchain solutions that delegate some of their functions to a layer 1 platform like Celestia. They share their transaction data with Celestia, which organizes and makes it available for rollup users to access. Furthermore, rollups benefit from some of Celestia's security features. They offer the convenience of launching similar to layer 2 solutions while enjoying the control typically associated with layer 1 platforms.

Modularism, not maximalism

Building on Celestia is rapid and as straightforward as deploying a smart contract. It enables users to access distinct application features and use cases, leverage dynamic throughput, and accommodate a growing user base. The Celestia community advocates modularism over maximalism, fostering a collaborative environment with interconnected chains. Each new user added to a modular blockchain contributes value to the entire modular ecosystem, rather than benefiting just one L1 platform.

For a long time, the cryptocurrency world has been dominated by monolithic blockchain systems. Each new L1 platform created a closed-off system where competition was intense and zero-sum. This often resulted in maximalism as platforms vied for users within their ecosystems.

Modular blockchains promote collaboration among many interconnected chains, with each new user bringing value to the entire modular ecosystem, not just a single L1 platform. Modular blockchains encourage collaboration, whereas monolithic L1 platforms tend to compete. The motto is modularism, not maximalism.

The TIA token

Celestia's native asset, TIA, plays a critical role in how developers build on the first modular blockchain network. Rollup developers, in order to utilize Celestia for data availability, submit PayForBlobs transactions on the network, incurring a fee denominated in TIA.

As a permissionless network developed using Cosmos SDK, Celestia employs a proof-of-stake mechanism to secure its consensus. Similar to other Cosmos networks, any user can contribute to network security by delegating their TIA to a Celestia validator and earning a share of the validator's staking rewards.

TIA staking also empowers the community to engage in decentralized governance, allowing them to vote on network parameters through governance proposals and oversee the community pool, which receives 2% of block rewards.

For more information, you can explore our interview with Nick White, the COO of Celestia Labs.

With Bitcoin Suisse, you can trade, stake, and store your TIA tokens.