Celestia, the first modular blockchain and a revolutionary solution, is redefining the way blockchains work and interact. As a modular blockchain network, it meets the growing scalability and security needs of blockchain applications. Celestia’s unique approach to data management and consensus mechanism, combined with its native TIA token, positions it as a pioneer in blockchain innovation. TIA has grown steadily since its launch last November, with a total increase of almost 800%, reaching $17.7 at the time of writing.
Source: Coinmarketcap
Celestia is an important project in the field of modular blockchains and, compared to Ethereum and Cosmos, it has undeniable technological advantages:
Ethereum operates as a rollup-centric blockchain network, where the interaction costs and flexibility of its Layer 2 network are generally not as robust as those of Layer 1. However, they can share security. On the other hand, Cosmos forms an interconnected network between several Layer 1 regions, offering cheaper and more flexible options than Layer 2s. However, the disadvantage is that the different Layer 1s in Cosmos cannot share security.
Celestia combines the strengths of both through modular technology. Projects using Celestia services can not only share security but also maintain flexibility, resulting in more cost-effective interactions for users. The core technology that enables this in Celestia is its unique validation mechanism. Its consensus mechanism is Tendermint, but as a public blockchain, it does not question the accuracy of transactions. Celestia transfers responsibility for verifying data accuracy to client-side users, i.e. other applications and public blockchains using Celestia services. They validate user data via roll-up nodes and prepare all transaction histories for Celestia.
However, Celestia faces its own challenges: 1. What is the appropriate block size? If Celestia accepts a malicious influx of data from roll-up nodes, the block size is likely to be excessively large, undermining the efficiency of the public blockchain’s validation. 2. As a specialised DA (data availability) execution layer, Celestia does not directly manage user transactions. It is responsible for processing user data from other execution blockchains, and its network effect may be limited in the future. 3. Competitors may erode its market share, such as Cevmos, recently developed within Cosmos. 4. The TIA token’s ability to capture value is limited to its own public blockchain. The value of the TIA may appreciate due to increased demand for Celestia block space from other public blockchains and applications, but this is limited to the Celestia blockchain itself. The token does not have value capture capabilities on rollups, unlike ETH. In addition, TIA tokens moving from one blockchain to another must use an intermediate credit gateway, which increases the risk associated with the tokens.
Article written by Bitget Research
