Understanding Celestia and its $100MM raise
Lex Sokolin
Managing Partner @Generative Ventures | ex Consensys Chief Economist & CMO | Fintech, AI, Web3
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Is Data Availability in demand? Unpacking Celestia’s $100MM Raise.
Celestia Foundation, the decentralised entity behind the modular consensus and data network Celestia, has raised $100MM in support from Bain Capital Crypto, joined by Robot Ventures, Placeholders, Syncracy Capital,1kx and others. The round takes Celestia’s total funds raised to $155MM and marks as a notable investment in a somewhat dry VC environment.?
Celestia's bread and butter is data availability.?Let’s talk about what this is.
There are different ways you can design blockchains — from bundling all the features (execution, settlement, consensus, and data availability) together, to having multiple networks perform these separately and integrate as a market.
On Ethereum, full nodes download a copy of the data in each block. The data needs to be available to download, and only blocks with complete data are added to the blockchain.?The challenge is storing and accessing all this data as transaction count grows into the billions.
This issue is compounded by the complexity of rollups, which add more transaction data, while providing faster and cheaper transactions. A recently implemented solution to this challenge is EIP-4844 (proto-danksharding), which introduced “blobs” and helped blockchains process data more efficiently. But Ethereum’s roadmap for full implementation of danksharding may still be years away — interim solutions like Celestia and Avail are either here to help, or render parts of the Ethereum roadmap obsolete.?
Unlike traditional blockchains, which bundle consensus, execution, and data availability into a single “layer”, Celestia decouples these components. It handles consensus and data availability, leaving execution to customisable layers, like rollups, built on top. This allows developers to create specialised, scalable applications without the constraints of traditional monolithic blockchains, such as Ethereum.?
One of Celestia's key innovations is "data availability sampling", which allows nodes to verify that data is accessible without needing to download the entire dataset, significantly improving scalability. It does this by only requiring resource-limited light nodes to sample a random number of shares from each block to verify data availability. This makes Celestia especially suitable for rollups, targeting a mix of security and efficiency.
The TIA token powers the network. Its primary role is as a proof-of-stake for participating validators. Validators stake TIA and validate blocks, with slashing occurring for incorrect validations. TIA is also used to pay for transaction fees on the network, such as paying for publishing data on-chain. Finally, it also acts as a governance token of the network.?
But who is using Celestia??
Over 20 rollups have deployed the networks using Celestia . Recently, Celestia’s data blobs exceeded half of the total data published by rollups to Ethereum. It did that at a fraction of the cost of posting data availability to Ethereum.?
There are two competing streams of thought for the future of L1s and L2s. One is to patiently let the Ethereum roadmap unravel — this has the drawback of slow, incremental improvements to L2 networks.
The other approach is to adopt modularity, implying a splintering of providers of various blockchain functions. The downside is that projects relinquish control over core technical components of their networks. Relinquishing control is painful for a couple of reasons: (1) it creates additional, unproven dependencies outside of the L1 and (2) it removes potential value and utility from a native token. This same logic applies to shared sequencers, which have only found adoption amongst smaller, fledgling L2s.?
That said, Celestia is still in its early days and already represents 40% of total data published . It recently launched the roadmap for achieving 1GB blocks , which would see it deliver the capacity of many Visa networks in parallel (Visa has a transaction throughput of c. 24L transactions per second).?
The jury is out on whether modular data availability and shared sequencer providers will begin to be adopted by the larger rollups in the space. This round could be indicative of VC conviction that Celestia will begin to break ground with larger players given its impressive data metrics and ambitious roadmap. Or, it could be VCs looking to offload capital into a highly touted project during the down market.
Either way, Celestia has more than enough capital to keep the wheels rolling on this particular science experiment.?
?? Related Coverage ??
DeFi: Ethereum's 'Dencun' Upgrade Targets Over 90% Reduction in Rollup Transaction Costs
Podcast conversation: Implications of the Ethereum Merge for Web3, with Justin Drake of The Ethereum Foundation
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Long Take: Will Revolut’s Gamble on Investment and Stablecoins Pay Off?
In this article, we discuss the ongoing pendulum swing between financial consolidation and decentralization, highlighting how companies like Revolut are navigating this cycle.
Revolut is expanding its services through ventures such as a standalone investment app and a potential stablecoin, targeting high-fee products like CFDs and aiming to compete with eToro and Robinhood. With 45 million users and $2.2 billion in revenue, Revolut’s growth strategy mirrors the earlier consolidation playbooks of JP Morgan and Ant Financial. The company’s investment app, with €8.5 billion AUM, reflects its push to diversify amidst declining interest rates, leveraging opportunities in brokerage and asset management. However, the key challenge remains balancing diversification with market volatility and future interest rate drops.
Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption?
DeFi and Digital Assets
Initia raises $2.5 million in under 2 hours on Cobie's Echo at $250 million token valuation - The Block
Blockchain Protocols
Solana Developer Platform Helius Raises $21.75 Million in Series B Round - Unchained Crypto
NFTs, DAOs and the Metaverse
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Disrupting the remittances across MENA ??
1 个月Exciting times for Celestia and the future of decentralized networks! ?? Data availability could be the game changer we've been waiting for. Looking forward to diving into why this might be the key to advancing the blockchain space. ????
4x Founder | Generalist | Goal - Inspire 1M everyday people to start their biz | Always building… having the most fun.
1 个月This is fundamental for trust and security in blockchain systems.
Thanks for sharing these insights on data availability and Celestia's significant milestone. ??
Director of Finance | Driving Financial Growth with Expert Analysis | White label Payment Systems | Tech Builder | Cross Border Payments | Prepaid Cards |
1 个月Celestia's raise spotlights data availability's crucial role for decentralized growth. Fascinating to analyze how this novel solution navigates scalability challenges. Your insights enlighten.
Co-founder | Pragmatist | Result Oriented | Director of Technical Operations @ Payomatix | Contact for anything related to payments | [email protected]
1 个月Data availability empowering decentralization? Insightful analysis. Can you elaborate more?