Project Research: Research Report on the First Modular Public Chain Celestia

Author: Bowen@Web3CN.Pro

On May 26, Celestia (formerly LazyLedger) tweeted to celebrate the 4th anniversary of its white paper publication. As the proposer and pioneer of modular blockchain, how has Celestia developed over the past four years? Read on for a quick overview.

1. Project Introduction

Celestia is the first "modular blockchain," previously known as "LazyLedger," specializing in "data availability (DA)" infrastructure.

Modularity is key to solving the blockchain trilemma, leading to a secure, scalable, and decentralized multi-chain future. Celestia adopts a modular architecture, deconstructing the blockchain into data, consensus, and execution, enabling developers with limited budgets to easily deploy their own blockchains through a streamlined, modular consensus layer.

2. Project Vision

Ethereum envisions a Rollup-centric future, where Rollups are often more expensive and less flexible than L1 but can share security with each other. In contrast, Cosmos is an ecosystem composed of interoperable sovereign L1s called zones. Cosmos is cheaper and more flexible than Rollups, but they cannot fully share security with one another.

Celestia combines the essence of these two projects, aiming to merge the sovereign interoperable zones of Cosmos with Ethereum's Rollup-centric model that has shared security, providing a more flexible, secure, and cost-effective public chain.

3. Features and Advantages

1. Features

• Modularity

Historically, blockchains have been distributed networks executing state machine replication, divided into three layers: data, consensus, and execution. In monolithic blockchains, all three layers are handled by a single network, leading to increased costs and complexity as the system's complexity grows.

Ethereum Rollups separate the execution layer to handle complex transactions, addressing some issues, but Rollups must monitor L1 and execute calls to compute, then return to L1 in different ways. Data availability still relies on Ethereum's consensus and execution layers, and the current costs of Ethereum's execution layer remain high, limiting the scope for developers.

Celestia is a modular protocol that only handles data availability (DA), allowing other execution and settlement tasks to lock onto the DA layer, enabling developers to directly choose the execution environment to build DApps on Celestia.

• Architecture

Ethereum Rollup's second-layer network serves as an execution layer, while the data availability, consensus, and settlement layers are all based on Ethereum. Such Rollups theoretically possess security close to Ethereum's mainnet. In contrast, second-layer networks using off-chain solutions like Validium sacrifice data availability security to increase throughput.

Image Source: The Path of DeFi

Celestia offers different solutions for modular scaling, with three types of architecture currently:

① Sovereign Rollup: The data availability and consensus layers are Celestia, while the settlement and execution layers are its own sovereign chain;

② Settlement Rollup (representing the project Cevmos): The data availability and consensus layers are Celestia, the settlement layer is Cevmos, and the application chain serves as the execution layer;

③ Celestium: The data availability layer is Celestia, the consensus and settlement layers are Ethereum, and the application chain serves as the execution layer.

• Decoupled Execution

Celestia receives transactions packaged by sovereign Rollups and orders them through the Tendermint consensus protocol. Unlike other blockchains, Celestia does not question the validity of these transactions and is not responsible for executing them. Celestia treats all transactions "equally"; as long as the necessary fees are paid, it will accept these transactions, order them, and broadcast them on-chain. Sovereign Rollup nodes execute transactions to compute their state, and if any transactions are deemed invalid by Rollup nodes, they will not be processed. As long as Celestia's history remains unchanged, Rollup nodes operating under the same validity rules can compute the same state.

2. Advantages

• Sovereignty

Currently, Ethereum's Rollups publish block headers on Ethereum, and fraud/validity proofs are executed on-chain, meaning their state is determined by a series of smart contracts on Ethereum.

The operational model of Rollups on Celestia is entirely different; it has no awareness of the data it stores and leaves all interpretation and execution rights to the Rollups, which operate like most current L1 blockchains. Therefore, Rollups on Celestia essentially function as sovereign blockchains.

• Easy Deployment

The Celestia team is implementing the ORU specification using the Optimint Cosmos SDK. This tool supports the deployment of any chain without developers worrying about the overhead of consensus or expensive deployment/operational costs, allowing new chains to be deployed in seconds, enabling users to interact with them securely from day one.

• Minimal Governance

Blockchain governance is slow, and improvement proposals often require years of social coordination to implement. While this is necessary for security, it significantly slows down the pace of development in the blockchain space.

Modular blockchains provide a better way for blockchain governance, where the execution layer can act independently and quickly, while the consensus layer remains stable.

• Efficient Execution Environment

In Celestia, state growth and historical data are completely handled separately. Celestia's block space only stores historical Rollup data, which is settled in bytes, while all state executions are measured by their own independent units within the Rollups. Since activities are subject to different fee markets, a peak in activity in one execution environment does not disrupt the user experience in another.

• Scalability

While decoupled execution does not require everyone to execute all transactions, it sacrifices composability and has limited scalability.

Celestia addresses the scalability issue through Data Availability Sampling (DAS). Celestia does not care about the validity of transactions; it is primarily concerned with whether block producers have fully published the data behind the block headers. Celestia only provides data availability without executing state, allowing for higher block production rates, more space per block, larger blocks, and more data to sample, resulting in higher TPS.

4. Development History

2019.05 LazyLedger white paper published

2021.03.04 LazyLedger Labs completed $1.5 million seed round financing, planning to launch the testnet by the end of the year

2021.06.15 LazyLedger renamed to Celestia

2022.05.25 Celestia launched its first testnet Mamaki

2022.10.20 Celestia completed $55 million financing, led by Polychain Capital and others

2023.03.15 Celestia testnet Blockspace Race launched, block explorer has been initiated

2023.05.12 Celestia: Initial version of Quantum Gravity Bridge has been launched on Blockspace Race testnet

5. Team Background

The mission of the Celestia team is to change the way blockchains and decentralized applications are built, making them more secure, scalable, and sovereign.

Team members have extensive experience building and scaling blockchains in projects such as Ethereum, Cosmos, and Harmony.

• Mustafa Al-Bassam

CEO of Celestia Labs, graduated from University College London with a Ph.D. in Computer Science. Co-founder of the hacker group Lulzsec and co-founder of Chainspace, a company implementing a smart contract platform that was acquired by Facebook in 2019. Mustafa has also authored several pioneering papers on the security of sharded blockchain systems. In 2016, he was named one of Forbes' 30 Under 30 in Technology.

• Ismail Khoffi

CTO of Celestia Labs, a well-known research engineer in the industry, graduated from the University of Bonn with a Ph.D. in Computer Science. In addition to building academic research models, Khoffi has contributed significantly to various non-blockchain and blockchain projects, including Google UK and Tendermint.

• John Adler

CRO of Celestia Labs. Previously worked at ConsenSys as an L2 scalability researcher, involved in the second phase of Ethereum 2.0. Adler found new applications for data availability from Mustafa and created the first prototype for the Optimistic Rollup solution. He is also a co-founder of Fuel Labs.

• Nike White

COO of Celestia Labs, holds a bachelor's and master's degree from Stanford University. Before joining Celestia, White co-founded the blockchain protocol Harmony for scalable blockchain infrastructure, providing new momentum for the decentralized revolution. White is also a senior AI expert in the Zeroth.ai accelerator program for AI startups in Asia.

In addition, Celestia Labs has dozens of members, including engineers, management, and consultants.

6. Financing Information

In March 2021, Celestia completed a $1.5 million seed round led by Binance Labs, with other investors including: Interchain Foundation, Maven 11, KR1, Signature Ventures, Divergence Ventures, Dokia Capital, P2P Capital, Tokonomy, Cryptium Labs, Michael Ng, Simon Johnson, Michael Youssefmir, and Ramsey Khoury.

The seed round investors are quite impressive, mainly focusing on two institutions: one is the COSMOS creator Interchain Foundation, and the other is Binance Labs. These two institutions can provide substantial support in terms of project resources and trading venues.

On October 19, 2022, Celestia Labs announced the completion of a $55 million financing round led by Bain Capital Crypto and Polychain Capital, with other participants including Coinbase Ventures, Jump Crypto, FTX Ventures, Placeholder, Galaxy, Delphi Digital, Blockchain Capital, NFX, Protocol Labs, Figment, Maven 11, Spartan Group, and several angel investors including Balaji Srinivasan, Eric Wall, and Jutta Steiner.

This round of institutional investors is even more impressive, featuring Bain Capital Crypto, a fund under Bain & Company, which is a top traditional web2 institution and one of the top 100 institutions globally. Additionally, leading institutions in the web3 space such as Polychain Capital and FTX Ventures are also involved.

According to an insider, the $55 million is the total amount raised in Celestia's A and B rounds, and the latest round of financing has made Celestia a unicorn with a valuation of $1 billion.

7. Development Achievements

Project Progress

Although polished for four years, Celestia is still a relatively young project, having raised a total of $56.5 million in two rounds. The second phase of the testnet Blockspace Race was launched at the end of March this year, allowing cross-chain bridge nodes, full storage nodes, and light nodes to begin participation. Celestia's official Twitter currently has 120,000 followers, and the Discord and Telegram communities are also very active.

Ecosystem Development

Officially, Celestia has 25 projects in its ecosystem, covering categories such as Gaming, DeFi, Wallet, RaaS, cross-chain, and infrastructure.

8. Economic Model

Celestia has not yet issued tokens.

9. Risks and Opportunities

Risks

As the first modular blockchain, Celestia has a long way to go. The feasibility of its proposed technology, the completion of its roadmap, and the ability to attract more projects for ecosystem development are all challenges and potential risks that Celestia currently faces. The project is still in its early stages, and its success needs further market validation.

Opportunities

Celestia has built a public chain that separates the data layer, allowing developers to focus on designs above the data layer without needing to worry about the underlying data recording. Many believe that this modular design for the data availability layer will not only provide faster solutions for scaling but will also significantly lower the barriers for developers entering Web3.

Currently, Celestia has not issued tokens, and you can follow the official community for updates and participate in ecosystem development. Among the many new public chains, those like Aptos and Sui from the Meta ecosystem stand out, while Aleo represents the privacy track. Celestia has also performed well in financing, ranking among the top new public chains, showcasing its strength.