Modular blockchain Celestia has recently performed exceptionally well, sparking a new wave of discussion about whether Celestia will become the “Ethereum killer”. So, what sets Celestia apart from Ethereum? What threat does it pose to ETH? This article, written by Haotian and translated and compiled by BlockBeats, will provide insights into these questions.
Summary:
Celestia is one of the pioneers in the field of modular public chains. Instead of following the usual path, Celestia has infiltrated the Ethereum ecosystem with its Blobstream, which is combined with the Ethereum Layer2 OP Stack to enable one-click chain deployment. With this strategy, Celestia has almost conquered the territory of Ethereum Layer2.
So, how should we understand the threat that Celestia poses to Ethereum? In my opinion, Celestia’s invasion will continue in the Layer2 field, but the outcome of this war will not be a zero-sum game. Instead, it will achieve a “win-win” situation. This is the inevitable result of the highly modular nature of the Layer2 market. Why? Let me explain.
When we break down the Ethereum blockchain system, there are two core components: Data Availability and Interoperability. While other components such as the EVM execution layer and the POS consensus layer are also important, when it comes to Rollup Layer2, we focus more on Data Availability and Interoperability.
Data Availability corresponds to the verification ability of Ethereum validators. If Ethereum participates in Data Availability, the mainnet validators have the ability to verify the state transitions submitted by the Layer2, ensuring security. If Ethereum’s Data Availability is separated, the mainnet calldata and Blob blocks become the state transition bulletin board for Layer2, and their validity is determined by third-party Data Availability consensus. Even if a premeditated “bad account” is submitted to the mainnet, the mainnet cannot judge or intervene.
Interoperability corresponds to the communication and interaction capabilities between Ethereum and other chains, mainly involving asset settlement, communication security, and solutions for liquidity interoperability. Currently, there are projects like Eigenlayer and some middle layer projects that manage liquidity.
These liquidity management solutions not only stabilize the asset settlement layer of Ethereum, but also release the consensus overload of Ethereum to multi-chain environments. The key is that they can export the security consensus ability of Ethereum validators to other chains, opening up new territories for Ethereum DeFi.
Celestia, one of the pioneers of modular public chains, should theoretically focus on the Cosmos IBC-related public chains as its main target. After all, the lightweight nature of the chains based on Cosmos IBC is a perfect fit for Celestia’s Data Availability layer. However, Celestia has infiltrated the Ethereum ecosystem with its Blobstream as an “external threat” and combined it with the Ethereum Layer2 OP Stack to create an “internal threat” of one-click chain deployment. With this strategy, Celestia has almost conquered the territory of Ethereum Layer2.
For Layer2 developers, they face a tradeoff between the legitimacy of Data Availability and the cost of chain deployment. The legitimacy of Data Availability is relatively more passive in the commercial market, suitable for comprehensive Layer2 projects with a focus on security consensus issues and a certain brand reputation and market foundation. On the other hand, new and emerging Layer2 chains, especially those created with the OP Stack, will try to minimize costs.
Therefore, third-party Data Availability solutions like Celestia are a better choice. Although EigenDA also provides Ethereum Data Availability services, it cannot reduce the actual development costs for layer2 projects.
For developers who choose to take shortcuts in running Layer2, cost will inevitably be the first consideration. The biggest cost of Layer2 is the Data Availability cost of Ethereum. Choosing a third-party Data Availability with low cost to offset the initial operational revenue pressure may be the preferred choice for most small developers.
So, whether Celestia poses a threat to Ethereum depends on the future development of Ethereum Layer2. If Layer2 gradually narrows down to comprehensive Layer2 platforms led by the “Big Four”, Data Availability will be the main theme. However, if Layer2 continues to see the emergence of various Layer2 solutions, cost considerations will always be a determining factor.
Although there is still the variable of the upcoming Constantinople upgrade, the trend of Ethereum Layer2 is already clear. A large number of Layer2 solutions will emerge for various reasons, including the underperformance of the “Big Four” (Arbitrum, Optimism, Starkent, zkSync), challenges in decentralization for sequencers, 7-day challenges, hardware acceleration issues for Prover systems, EVM compatibility issues, cross-chain asset escape issues, token economic models that cannot empower governance tokens, and the difficulties of native DeFi development.
It is not an exaggeration to say that the development of Layer2 has left behind a basket of problems. Each of these problems, when paired with a Stack framework and Celestia Data Availability, can become a strong development direction with capital narrative and imaginative space.
As I mentioned in my previous article, the chaotic situation of Layer2 will truly unfold after the Constantinople upgrade, and the Layer2 market will move towards “diversification” and prosperity. Moreover, while OP Stack and ZK Stack are building a more open and inclusive era of Layer3 application chains, the framework of traditional Ethereum Layer2 will become more blurred. Celestia and other third-party Data Availability layers will become a necessary component of the modular Data Availability layer in the Ethereum ecosystem.
This is the inevitable trend of the commercial expansion of the Layer2 track and the fundamental reason why Celestia continues to pose a threat to the Ethereum Layer2 ecosystem.
However, this is not just a threat to Ethereum. As more Layer2 solutions adopt third-party Data Availability solutions like Celestia, the market position of Celestia will become prominent, and it will also drive changes in the Ethereum Layer2 market. Firstly, comprehensive Layer2 platforms will become the foundation, occupying the high ground in terms of liquidity, user volume, and application ecosystem, with Data Availability as the core differentiating factor to ensure their solid position. Secondly, personalized and innovative Layer2 platforms will become extensions, attracting adventurers and pioneers with diverse gameplay and market opportunities. Flexibility and freedom are their trump cards.
Based on this perspective, Ethereum’s core Layer2 will become increasingly stable, and the position of Ethereum’s Data Availability will not be shaken. Even for Layer2 or Layer3 solutions that do not rely on Ethereum for Data Availability, as long as they are built on the Stack framework on Ethereum, it will be difficult for them to escape the control of Interoperability.
By then, as the source of asset settlement and liquidity, Ethereum will have a more flexible control over these flexible Layer2 solutions.
If you don’t understand what I mean, just look at Celestia, whose price has skyrocketed but has very few actual transactions. While Celestia is invading Ethereum, it will gradually lose its “comprehensive chain” attributes (which it never had), and become a modular Data Availability layer in the Ethereum ecosystem. So what if many Ethereum Layer2 solutions adopt Celestia’s Data Availability? As long as the frameworks of Stack and Rollup remain unchanged, these Layer2 solutions will still have to continue to “pay taxes” to Ethereum.
Compared to the loss of Data Availability legitimacy, the rise of diverse and prosperous Layer2 and Layer3 markets will always make Ethereum the biggest beneficiary.