What is Celestia ($TIA)? Unpacking Modular Blockchains

Celestia’s token ($TIA) just dropped. Highlighted by its modular data availability network the crypto community has showed a lot of excitement around this launch. Why? What is so valuable about Celestia? What is its vision for crypto? How, if successful, will Celestia change the crypto landscape? Today, on Bankless We’re talking to two Celestia CoFounders Mustafa and Ismail to explore the thesis behind Celesia. So, strap yourselves in, put on your learning cap, because we’re going to learn about Celestia in today’s episode. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ⁠ 👾GMX | V2 IS NOW LIVE https://bankless.cc/GMX 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo 🦄UNISWAP | ON-CHAIN MARKETPLACE ⁠https://bankless.cc/uniswap ------ TIMESTAMPS 0:00 Intro 4:10 What is Celestia? 6:12 The Modular Thesis 9:00 Celestia & Ethereum Relationship 18:27 Economics of Celestia 21:21 Celestia’s SDK 26:31 Celestia’s Capital Power 28:15 $TIA 32:18 Blob Stream 34:30 Celestia Endgame 36:18 Current & Future Projects on Celestia 41:15 Celestia’s Vision 43:55 Closing & Disclaimers ------ RESOURCES Mustafa https://twitter.com/musalbas Ismail https://twitter.com/KreuzUQuer Celestia https://celestia.org/learn/ Vitalik’s Endgame https://vitalik.eth.limo/general/2021/12/06/endgame.html ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:03David Hoffman?

  Bankless Nation, we are going to learn about Celestia. Celestia's token just dropped and it's been up only ever since inception. Up over 200% since launch, Celestia is now a $7 billion network. Why? What about Celestia is so valuable? What is Celestia's vision for crypto? How, if successful, will Celestia change the crypto landscape? Today on Bankless, we're talking to the two Celestia co-founders Mustafa and Ismail to explore the thesis around Celestia. So strap yourself in, put on your learning hat, because we're going to learn all about Celestia today. But first, a moment to talk about some of these fantastic sponsors that make this show possible, especially Kraken, our preferred exchange for crypto in 2023 and beyond.

• 0:45David Hoffman?

  If you do not have an account with Kraken, consider clicking the link in the show notes to get started with Kraken today. Kraken knows crypto. Kraken's been in the crypto game for over a decade, and as one of the largest and most trusted exchanges in the industry, Kraken is on the journey with all of us to see what crypto can be. Human history is a story of progress. It's part of us, hardwired. We're designed to seek change everywhere, to improve, to strive. And if anything can be improved, why not finance? Crypto is a financial system designed with the modern world in mind. Instant, permissionless, and 24/7. It's not perfect, and nothing ever will be perfect. But crypto is a world-changing technology at a time when the world needs it the most. That's the Kraken mission, to accelerate the global adoption of cryptocurrency, so

• 1:28David Hoffman?

  that you and the rest of the world can achieve financial freedom and inclusion. Head on over to kraken.com/bankless to see what crypto can be. Not investment advice, crypto trading involves risk of loss. Cryptocurrency services are provided to US and US territory customers by Payward Ventures Eek, PVI doing business as Kraken. Introducing GMX V2, the deepest on-chain futures market to trade Bitcoin, Ethereum, and leading altcoins. With the launch of GMX V2, enjoy the best of both worlds: lightning-fast trade execution, competitive pricing, without having to compromise on custody. With 150 billion trades settled on-chain and over 500 million in liquidity across Arbitrum and Avalanche, GMX is the preferred destination for DeFi traders and community liquidity providers.

• 2:10David Hoffman?

  Right now, over $12 million in Arbitrum grams are being distributed to traders, LPs, and developers building on GMX V2. There's never been a better opportunity to experience the future of crypto trading. GMX and its ecosystem of integrations continue to move us forward. Your wallet, your trades, your choice. Trade on GMX with the exclusive Bankless discount code in the show notes and benefit from 10% lower fees. Try it out now at app.gmx.io. Cello is the mobile-first, EVM-compatible, carbon-negative blockchain built for the real world. And now, something big is happening. Introducing the Cello Layer 2. It's a game-changing proposal that's going to bring Cello's rapidly-growing ecosystem home to Ethereum. Vitalik has shared its excitement for the Cello Layer 2 on the Cello forum, so has Ben Jones from Optimism. But why?

• 2:55David Hoffman?

  The Cello Layer 2 will bring huge advantages, like a decentralized sequencer, off-chain data availability, and one-block finality. What does all that mean? Rock-solid security, a trustless bridge to Ethereum, and more real-world use cases for Ethereum without compromise. And real-world adoption is happening. Active addresses on Cello have grown over 500% in the last six months. With the Cello Layer 2, gas fees will stay low, and you can even pay for gas using ERC20 tokens. But Cello is a community-governed protocol. This means that Cello needs you to weigh in and make your voice heard. Join the conversation in the Cello forum. Follow @celloorg on Twitter and visit cello.org to shape the future of Ethereum. Bankless Nation, I am super excited to introduce you to Mustafa Al-Bassam.

• 3:37David Hoffman?

  Mustafa is a co-founder of Celestia and CEO at Celestia Labs, authored The Lazy Ledger White Paper back in 2019, we'll get into what that is and what that means, which kicked off the Celestia project. Previously, Mustafa was the co-founder of ChainSpace, acquired by Facebook. Mustafa, welcome to Bankless. Thanks for having me. Joined by Mustafa, we got Ismail Koffi. Ismail is a co-founder and CTO of Celestia previously. Ismail was a senior engineer at Tendermint and the Interchain Foundation, that's the Cosmos ecosystem. Ismail, also, welcome to Bankless.

• 4:09Speaker 01

  Thanks for having me.

• 4:10David Hoffman?

  Guys, there has been a bunch of energy around the Celestia ecosystem as of recently due to the token launch, putting the Celestia token on the map. So in this episode, I want to explore just the contours of what Celestia is, what its thesis is for the future of crypto, and what its role is for the crypto ecosystem. So let's just start at the very high level, and Mustafa, I'll throw this one to you. What's Celestia?

• 4:35Speaker 02

  Celestia is a modular data availability network that scales with the number of users on the network. And what that does is that it makes it very easy for anyone to launch their own blockchains and rollups while having not to pay high data fees.

• 4:51David Hoffman?

  Okay, so this is in the modular thesis of the crypto space. And there's been a ton of just like arguing and debating on crypto Twitter as to like what the future of crypto looks like, especially when it comes to scale. So does Celestia have like an opinion about what the future of crypto looks like? And how does it fit inside of that own internal thesis?

• 5:14Speaker 02

  Yeah, so Celestia was started in 2019 around the thesis that blockchains should not be responsible, or layer one blockchains should not be responsible for computation and execution. Basically, the original rollup centric Ethereum thesis, the idea that not every single application has to share the same chain, and not every single application has to be executed by everyone on the same chain. And instead, you can separate consensus and execution. And instead, you do execution of chain in rollups. And that's, that's the opinion, that's the kind of original thesis that Celestia had. And this was an entire year before Ethereum kind of switched to a rollup

• 5:58Speaker 02

  centric thesis. And I started Lazy Ledger to kind of like figure out how we can rework blockchains from the ground up and create a system that where the base layer is only responsible for consensus and data availability.

• 6:13David Hoffman?

  Ismail, maybe you can take this and run with it. What does it mean for a blockchain to only be up for consensus and data availability? When we talk about the modular thesis, what are we, what are we pulling apart here?

• 6:25Speaker 01

  So basically, we're pulling apart, well, Musaf already mentioned it, kind of. We're pulling apart the execution from consensus and data availability. So if a chain does only consensus and data availability, it means applications post their data, their blocks, their transactions on Celestia, and they get ordered, there's consensus on that order. And then the execution happens in the rollup or off-chain, like not on Celestia.

• 7:00Speaker 01

  So that's basically what's been pulled apart.

• 7:05David Hoffman?

  Musaf, you brought up the Lazy Ledger paper. Can you explain the significance of that? And what does Lazy Ledger even mean?

• 7:12Speaker 02

  Yeah, so it's called Lazy Ledger because it's a blockchain that is lazy in the sense that it doesn't do any computation or execution. It's just a blockchain where you just dump arbitrary data into it. So it just kind of acts as a lazy or like dumb data availability layer. And the kind of original idea behind this is, well, like, I was kind of involved with Ethereum research space in around 2018, 2019. And back then, people were discussing the Ethereum 2.0 sharding roadmap. And the kind of like missing piece of the puzzle from that was data availability sampling and the idea of how can we scale data availability? And so it was kind of around then that I kind of realized that the core primitives of a blockchain,

• 7:57Speaker 02

  like what a blockchain fundamentally is, is just a proof of publication system where you can just dump arbitrary data into it and it orders it and makes it available. And once you have that and scale that very well, that unlocks a lot of power and scale for developers to build their own computation environments and applications on top of it using rollups.

• 8:21David Hoffman?

  Ismail, what were you gonna add to that?

• 8:23Speaker 01

  Yeah, I just wanted to add that lazy is a very common term in CS, like in computer science or programming. And it doesn't only mean that it's just lazy. And like, I think Mustafa used the word dumb. In the sense, it's also like, it's actually optimized because it lazily does the execution only where it's needed, right? Like, it's not like this world computer model where everyone executes everything, like all the transactions, but it's optimized in the sense that the transactions only get executed exactly where it's necessary.

• 9:00David Hoffman?

  So this thesis from Celestia about just being A, a modular blockchain, and B, being focused on rollups, AKA like supporting more blockchains, is very harmonious and synergistic with the Ethereum thesis. So Ismail, maybe you can explain a little bit about like, what would you say is Celestia's relationship to Ethereum?

• 9:20Speaker 01

  I think it's very like, it could be very symbiotic in the sense that Celestia could also be used as a building block for Ethereum, like Williams or Layer 2s in the sense that people or like developers who want to launch like a Layer 2 currently have the choice to post call data directly on Ethereum, which is very like expensive. I mean, it's great for censorship resistance, but it's like not really practical and way too expensive. And the alternative to that is you have a data availability committee, which is rather centralized, right? So and Celestia is that like sweet spot between that

• 10:05Speaker 01

  because now you can have an Ethereum application or an Ethereum Layer 2, and you post your data additionally on, or not additionally, you post your data on Celestia and use that for data availability. So I think that might enable new applications that are currently unfeasible or not practical on Ethereum through Celestia. We have this project called Blob Stream that also posts attestations onto Ethereum, data attestations onto Ethereum. So that makes it very like, could make it very symbiotic, in my opinion.

• 10:44David Hoffman?

  What's the property that Celestia has that Ethereum doesn't have that you're saying is unlocking, potentially unlocking like new use cases or new applications?

• 10:54Speaker 01

  Oh, that data ordering and data availability is really cheap.

• 10:59David Hoffman?

  Okay.

• 10:59Speaker 01

  That's the goal. Yeah, exactly.

• 11:02Speaker 02

  Yeah, so like the initial block size, it's not like it could be symbiotic. It is very symbiotic because the initial block size for Celestia is something like 20 times higher than EIP 444 as well. I think this will add a lot of value to Ethereum as well because in order for, in order to have, even with EIP 444, in order to have a lot of applications that are practical, you need off-chain data availability, especially for these gaming chains that don't need as secure or as high security as on-chain Ethereum data has. And I should also mention, for example, EIP 444 only supports three blobs per block.

• 11:48Speaker 02

  And where Celestia doesn't have a limit to how many data blobs per block. And what does this mean practically? So we've discussed like the technical benefits of modular blockchains. But one of the thesis that Celestia has for why modular blockchains are important is this idea of application-specific blockchains. So on Ethereum right now, you have this, you have like a few big rollups, like you have Arbitrum Run, you have, you know, Optimism Mainchain and so on and so forth. But my original kind of thesis for Celestia was that, well, we should have many rollups. So it's very similar to the Cosmos vision where you have many blockchains, except that those blockchains will all be sharing the security. And so you have this idea of application-specific rollups.

• 12:29Speaker 02

  And that's a very powerful idea that can lead to inherently better products because what that allows you to do is it allows you to create modifications to things like the EVM. Or create competition environments that can do things that inherently aren't possible without a custom execution environment. So to give you some examples, so for example, there's a roll up on Ethereum right now called Manta, which has modified the EVM to add certain ZK, zero knowledge opcodes to make things like zero knowledge hold'em possible. So there's like this actual application running right now that wouldn't be economically feasible to run with an unmodified EVM. And then you've also got like a project called Curio, which which modified the

• 13:12Speaker 02

  EVM to embed an actual game as an opcode to the EVM. So they've managed to create like a 0.5 second tick engine for their game where you can have like a real time strategy game where it's like if you move your character, it moves immediately. And that inherently requires modifications to the Ethereum virtual machine. And so our thesis with application specific blockchains that like we can imagine a world where there might be, you know, thousands or tens of thousands of rollups rather than five rollups. I mean, you see this today, there's a project on Celestia called Dimension with 11,000 rollups deployed via Celestia via this project. And so you can imagine in the future, if you go to L2 Beat, you can imagine in a year

• 13:53Speaker 02

  or two from now, it's not going to be 30 rollups. It might be 10,000 rollups. And that's going to be inherently enabled by Ethereum L2s posting their data onto Celestia because those application specific rollups will inherently be enabled by much greater data throughput and greater quantity of data blobs.

• 14:13David Hoffman?

  Just to parse something out that you said, so we have a bunch of Layer 2s that are tinkering and playing around with new virtual machines, forking the EVM, or sometimes even just not even starting with a VPN, EVM, and just having a brand new virtual machine to power that blockchain. But that you can tinker, freely tinker with a virtual machine and settle on Ethereum. Celestia isn't unlocking anything there. That's not new. But what you're saying is that the data availability is enabling these things to actually have the low fees to actually have the use cases that the tinkering of the EVM does enable, right? So it's not like you can tinker and change up a virtual machine blockchain on Celestia anymore or less than you can on Ethereum. It's just that the fee, the cheaper fees due to the supply of data from

• 14:58David Hoffman?

  Celestia just opens up the landscape of when you do tinker with a virtual machine, you can get more use cases out of it. That's the way to interpret this?

• 15:07Speaker 02

  Yeah, that but and also it's the fact that But the IPA 444, for example, you can only fit three data blobs per block. And so you can like a roll up can only buy like 100 kilobytes of data at a time. So with roll up, you can buy as little as 500 bytes. So with that kind of like, um, the minimum unit of data you can buy, that inherently enables Ethereum to have a lot more, to have this proliferation of smaller application-specific rollups.

• 15:33David Hoffman?

  Right. So 4844, like three, three blobs per, um, per block, I think. So like three rollups can post, can post like their state root to Ethereum after 4844. But how does this compare to, and so 4844 is proto DANK sharding. How does Celestia compare to full DANK sharding?

• 15:50Speaker 02

  Yeah, so it's not, um, I mean, the, it's not yet clear how many data blobs then full DANK sharding will support, or like what, what the, what the full roadmap is there. Um, but generally speaking, uh, Celestia already supports eight megabyte blobs. So which I, uh, which I think is like, as of today, is around half of the, uh, maximum throughput that DANK sharding plans to support in a few years, in a few years' time. So I, I think the main benefit here really is, uh, through the blob stream bridge. Um, Ethereum rollups, Ethereum can, can remain a lot more competitive with, you know, other layer ones by having access to this much higher data throughput to allow rollups to scale and also to allow for application-specific rollups to, to proliferate.

• 16:35Speaker 02

  And I should also say that, um, like Celestia and Ethereum are actually very kind of similar in, in some sense, because they share very similar values. Because they, as I said, when I was kind of working on or looking at Ethereum research, uh, back when Ethereum 2.0 was still being planned, I was really interested in how to make sharding work. And one of the key primitives of sharding was data availability sampling. And so I could also this paper with Vitalik on how on data availability sampling. And data availability sampling is basically answers the question of like, how can end users or light nodes verify that the chain, the data behind the chain was actually made available

• 17:19Speaker 02

  without them having to download all the data themselves? Because that's inherently required to for for schemes like fraud proofs or ZK proofs. For fraud proofs and ZK proofs to work, you need to know that data is available. And you can obviously you can just increase the block size, but that will halve the the ability for end users to actually verify the chain. But with data availability sampling, end users can download small parts of the chain. Like if they download 1% of the chain, they can verify that 100% of the chain is available. And so this is very, this is, this is very different to other off chain data availability solutions on Ethereum, like data availability committees.

• 17:59Speaker 02

  Because with data availability committees, you have to trust that committee in order to make sure that data is actually available. But with data availability sampling, the end user can actually verify that the data is available themselves. And that's basically the also the the goal, the end goal of tank sharding. And so like from a values perspective, it's very kind of aligned that like end user verifiability is very important for decentralization.

• 18:27David Hoffman?

  I know one thing about the economics of Celestia is that the supply of bandwidth, if you will, the supply of data increases the more that people use it. This is a line that I've heard. Musafa, could you explain how that works?

• 18:43Speaker 02

  Sure. So as I mentioned, with data availability sampling, you can have a system where you have light nodes. And what what light nodes are is that if you go on MetaMask right now, how does your MetaMask interact with the Ethereum network? Right now, it just uses a centralized RPC endpoint like in Furo, for example. But one of the original goals of Web3 is that users should be able to verify the chain themselves without having to go through trusted third parties. And the idea of light nodes and light clients are important to achieve that because the idea with a light node is that you can run a node locally on your phone or your computer that connects to the network directly.

• 19:25Speaker 02

  And can verify the chain with very little resources using technologies like fraud proofs or ZK proofs and data availability sampling. And with data availability sampling, what happens is every light node downloads a very small piece of the chain. And so the more light nodes you have, the more pieces of the chain are downloading. And so the more pieces of the chain are downloading, the bigger block sizes you can have while allowing the light nodes to verify the chain. Because the property is that as long as you have enough light nodes downloading enough of the chain to collectively, such that they can collectively reconstruct the block themselves, then you can increase the block size.

• 20:07David Hoffman?

  Sure. So yeah, the idea is that the more people, the more people that are verifying smaller pieces of the whole entire Celestia system, the larger the whole entire Celestia system can be while having assurances that the whole system is being checked by the collective set of light nodes out there. Is that how?

• 20:24Speaker 02

  Exactly. And this is how, this is kind of like a very differentiating point between Ethereum and Celestia and Solana. Because people complain about, you know, Solana claims to do very high throughput, but it's got very high validator requirements. You need like 256GB of RAM to run a validator. And there's no way as an end user to easily or cheaply verify that the validators are doing the job correctly. And that's why like the Ethereum community kind of like pushes back against that rhetoric. Well, you can increase the block size, for example, but that would just mean having to increase the resources required to run a full node. But with line nodes, the idea is that you can increase the resources for full nodes

• 21:09Speaker 02

  without harming the ability for end users to actually verify that chain. Because they can use technologies like fraud proofs and data availability sampling. And this was also described, this was also described in Vitalik's end game post.

• 21:21David Hoffman?

  Yes, yeah, I remember that. I remember that. We'll link that post in the show notes. Ismail, I think I'll turn this one back to you. In the Ethereum rollup landscape, we have all of these different like rollup chain development kits or stacks, like the OP stack is a big one, of course. Polygon when they're supernet or supernets. And basically they call them the CDK. Does Celestia have something like this?

• 21:48Speaker 01

  So we're working internally on something called RollKit, which is also a development kit. It's like a drop-in replacement for Tendermint, or Comet BFT, as it's called today. And that enables any ABCI-compatible application, which is basically any Cosmos-flavorish chain to be deployed on top of Celestia. But it's not even limited to Celestia. It's like general-purpose development kit or infrastructure as you want. And you could also use it for Avail or other data availability layers. But we're developing it. That's the only one we're developing in-house.

• 22:29Speaker 01

  But there's a big community that are working on SDKs. For instance, like Southern SDK, Dimension, basically, that Mustafa mentioned earlier, can also be understood as an SDK. And we're also working with the... We have a fork of the OP stack, and we would like that to be merged upstream, such that you could also use OP stack off-the-shelf to deploy on Celestia as well.

• 23:07David Hoffman?

  So when we talk about using like a chain development kit, like RollKit, and to deploy rollups on Celestia, that sounds exactly what a lot of the Layer 2s are doing on Ethereum. Is it really that simple of a comparison? Or are there differences that we should understand?

• 23:22Speaker 01

  I mean, RollKit specifically is a bit different in the sense that it is... Like, it requires the application on top to adhere to a specific interface, right? But I think all these SDKs, like the beauty of Celestia is like you could potentially use like all these execution environments. In one flavor or the other, on top of Celestia as well, there's like, there's no limit on what you can build on top for like EVMs or any execution environments. So I think the main difference is that like in Celestia, we like welcome basically all the, the whole zoo of SDKs and developer tooling into our ecosystem as well.

• 24:07David Hoffman?

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• 24:51David Hoffman?

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  the Uniswap app is now available on both iOS and Android. Start swapping seamlessly with products from the most trusted team in DeFi. Visit app.uniswap.org to get started today. So where would Celestia get the assets? For example, like so deploying a Layer 2 on Ethereum, you get you instantly tap into the market cap of ETH. Like you get to have USDC and DAI transfer in, you get any of the tokens. So what's the saying? Like, where does Celestia get some of the just economic power from?

• 26:51Speaker 01

  So on Celestia directly, there is no like, there is no direct, I mean, it's connected through IBC with the Cosmos ecosystem. And I think ideally, the community should decide on a bridge to Ethereum as well directly. So but into like from Celestia directly, there won't be many like assets in and outgoing because it just doesn't make sense. Because like the applications are who need these assets, and they live on top of Celestia. So there will be bridges. There are like different bridging providers already for these. But ideally, this would also be in be happening in a more trust-minimized way.

• 27:36Speaker 02

  Yeah, so I think a good way to put it would be that like on Ethereum, the rollups scale the base layer, whereas on Celestia, the base layer scale the rollups. But that being said, obviously, you know, for rollups, bridging is still important. I mean, you have a very early kind of bridging ecosystem. So there's, for example, there's IBC, as is Mel mentioned, you can have IBC bridges. Between Celestia and rollups. And then you also have like projects like hyperlearning. They have a bridge called DEXs, which you can use on using DEXs that are already right now, where they've actually got bridges right now between like you can you can reach Celestia to other chain, other rollups, including Arbitrum, for example.

• 28:16David Hoffman?

  So how does the native token of Celestia, the TIA, call it TIA, TIA token? What does, what's its role? How does it make the whole system like work?

• 28:26Speaker 01

  So its main purpose is that like, first of all, is like a staking token, right? It secures the network the same way as ETH is used to secure the proof of stake network, like via staking. But the other big utility there is that it is used to pay for the data, right? Like if it's rollup or application-specific rollup posts data on Celestia, the fee is paid in TIA.

• 28:54David Hoffman?

  Kind of, kind of like how when a rollup on Ethereum pays to post data on Ethereum, it pays it in Ether. Same thing in Celestia. Is there like an economic model unlike like EIP1559, where the TIA token is burnt? Or like, what is the, what's like the supply characteristics like?

• 29:11Speaker 01

  Currently, there is no fee burning, like not, not, not, not exactly equivalent of that. So currently, the fees are distributed to stakers, like they don't end up at the, like with, with one proposer, like block producer, but they're distributed according to like the weight of the stake. It's also delegated, delegated proof of stake. It's a bit different than any Ethereum staking model.

• 29:39Speaker 01

  But yeah, it gets distributed to the stakers or delegators. And, but we are thinking about fee burning as a viable way forward for, for fees. I think, I think fee burning specifically makes sense if there's like a lot of transactions, right? And there's like a, like a fee market and you'd like balance it out. And I think that's something that's also on our roadmap.

• 30:08Speaker 02

  Yeah, I should mention, we have a, we have a very similar protocol improvement proposal process like Ethereum. We have a version of IPs called CIPs, Celestia Improvement Proposals. And I think the community plans to make some. Kind of like fee bonding proposals there.

• 30:23David Hoffman?

  Certainly. Yeah, okay. And just to take a easy question off the table. The Celestia is it's a blockchain and so there are blocks with certain sizes. And there's certain levels of demand for that block space. And then that demand is purchased in the T I T A token, correct?

• 30:41Speaker 02

  Yes, exactly.

• 30:42David Hoffman?

  Okay, cool. Is the like economic model for Celestia somewhat similar to like? Like a lot of the Solana people will say that the Solana case for the economics behind Sol is that they make it up on volume. And so like with Celestia wants to have not just like a few rollups, it wants to have many, many, many rollups. And so like in terms of like long term economic sustainability for Celestia. Is it like, well, we're never, it's never really going to make economic sense if Celestia is only supporting a few blockchains, even if they are really, really big beefy blockchains. The idea is that there's just so many blockchains and they're all paying a small amount. That Celestia like the really, the long term economics comes from like making it up on volume. Is that, is that right, the right model, understand this?

• 31:28Speaker 02

  Yeah, so I have a post on the forum called the core values of the Celestia social layer. And one of those values is that we should try to achieve economic sustainability through economy of state scale. Instead of trying to achieve economic sustainability through artificial scarcity of resources. Or trying or like highly contested state, because ultimately we're all here to try to, we're all in web three to try to provide products to billions of users. So I think like the healthiest way to be economically sustainable is not through artificial scarcity. But to try to provide sustainable, high quality block space to serve billions of people.

• 32:08Speaker 02

  And I think if that's, if you do that, then I don't see any reason why you can't achieve economic sustainability. While having affordable transaction fees.

• 32:18David Hoffman?

  It's something that was mentioned earlier that I want to make sure that we dive headfirst into is this thing called Blob Stream. Ismael, I think you, I think you brought it up. Could you just explain what Blob Stream is?

• 32:29Speaker 01

  So basically, it streams the data attestations onto Ethereum such that Ethereum Layer 2, so to say, can read the data attestations directly on Ethereum instead of like having to read the like the attestations from Celestia additionally. So it's basically a more like it enables a more decentralized way to handle data for a Layer 2 on Ethereum. So instead of a data availability committee, you have like a more decentralized solution there while still being very inexpensive instead of like posting on Ethereum. That's that's the main,

• 33:14Speaker 01

  I think that's without going too deep. That's the main explanation, I would say.

• 33:19David Hoffman?

  Is a way to understand this. It's basically like a bridge, not for assets, but for data. It's a data bridge between Ethereum rollups and Celestia.

• 33:29Speaker 01

  Exactly. So it's like you can think of it as like a one-way bridge. You post the headers and these like data attestations of Celestia on Ethereum. That's that's basically it.

• 33:40David Hoffman?

  So as far as I know, only Ethereum and now Celestia are going after like the rollup roadmap. I don't think there's any other like chain out there. Maybe, I mean, Cosmos is similar to this, the app chain thesis. But really, there's no like Celestia is the only thing like Ethereum in the sense that there's like one single settlement layer. Ethereum is a settlement layer for assets. Celestia is a settlement layer for data. But these are the only two ecosystems really going after like the thesis of producing rollups and not just a few rollups, like thousands of rollups. And so like is the kind of if unless without any new player entering this arena, is the kind of the long-term conclusion for Celestia, some combination of

• 34:22David Hoffman?

  Celestia native rollups and then also selling its data to Ethereum rollups. And that's kind of just like the grand scheme of things.

• 34:29Speaker 02

  Yeah, I mean, I should also mention that like there are some other kind of rollup-centric projects in this. And so I think like, for example, Tezos, it's trying to do have a rollup-centric roadmap. And I think there's some early experimentation of rollups on Cardano. I mean, I don't know how that's going. But like Celestia, but wait, what I would say is like Celestia is the only kind of base layer that has been created from scratch specifically with the rollup-centric ecosystem in mind. And as you said, like, we're not opinionated on how people use that base layer. Like, the core value here is we're going to create a credibly neutral base layer. And you can therefore for data availability and consensus. And that's completely neutral to any execution environment that builds on top of it.

• 35:14Speaker 02

  And as you said, like, people are kind of like free to use it however they want. Whether it's as a Ethereum L2 or a Validium that uses Celestia as data available there for Bobstream, or whether it's a sovereign rollup directly on Celestia or using some other settlement layer. Kind of that's up to the user. Because that's kind of like the whole point of modularism from our perspective. Which is that users have the flexibility, developers have the flexibility to choose how they want to, what elements in the stack they want to use. And as any kind of technology stack matures, and we also saw this in Web two, for example. In in Web two, you had this rapid modularization and software as a service architectures popping up where users kind of had like these micro service architectures

• 36:00Speaker 02

  and virtual machines where they can like have different components they can play, they can plug and play around with. And so, and as any technology stack matures, you have a modular modularization of the stack where developers can pick and choose what makes sense for the application. And that's what we're trying to do. And that's how we see the blockchain space moving forward.

• 36:17David Hoffman?

  So what are some projects that people can find on Celeste? What are some of the the earliest projects that have committed to the Celeste ecosystem? What are they up to? What was just like the landscape of Celeste projects look like?

• 36:28Speaker 02

  Yeah, so it's kind of like a wide ranging landscape. So you have various rollup frameworks that support Celestia. So for example, you've got Dimension. And Dimension is a Cosmos bridge, Cosmos rollup settlement layer that supports Celestia for data availability. So you can deploy a Cosmos rollup on Dimension. That uses Celestia for this availability and right now they've got incentivized test net with around 10,000 rollups deployed and I think that really kind of illustrates the point where we're trying to make deploying a rollup as easy as deploying a smart contract. And if you go to the portal, there's various kind of applications you can play around with

• 37:07Speaker 02

  deployed on there, like, you know, gaming and NFT applications. And then there's also support for Arbitrum rollups and OP stack rollups. So there's a few projects building OP stack rollups that plans to use Celestia for this availability. So there's one called Manta Network, which I mentioned earlier. It's kind of like a rollup that has certain ZK upcodes to make certain privacy preserving applications like privacy preserving hold impossible. They're already on Ethereum mainnet, but they're planning to support, support, use our OP stack integration to support Celestia as its availability for cheaper transaction fees.

• 37:45David Hoffman?

  Ismail, when you guys like daydream about potential future use cases or potential future ideas that somebody could build, is there anything that comes to mind here?

• 37:55Speaker 01

  I mean, I dream of like basically anyone like, like today, if you, if you deploy like an application, you just like have an app store or whatever, you, you host it in, in, in some like cloud, cloud provider. I think ideally we'd have something where you can like deploy your rollup, like your small rollup quickly on, in a browser and like run it with, with, with your community, run it with your friends and like turn it, tear it down once you don't need it anymore. So, so that's basically like a use case. I think like ephemeral rollups, so to say, like is something I would like to see. And

• 38:40Speaker 01

  maybe something like, I think it's been, it's been a dream since like, I don't know, early Ethereum days or even before, like have a social network on, on top of chain. And I think maybe not like, like the

• 38:56Speaker 01

  Like not all the whole application, all the data needs to live on on Celestia or or on chain. But I think to some extent, having an alternative, like a social network alternative on chain, or like a web three native social network, I think that would be, it would be really cool. And I, I think, yeah, Celestia enables applications like these as well.

• 39:24Speaker 02

  And so I, I personally think the killer use case for crypto is still payments. Kind of like going back to the roots of cryptos, like Bitcoin was a peer to peer hash system. But like, why hasn't that happened yet? And I think for consumer applications, like rollups, as I said, like, to me, the, the most important thing about rollups is to create a better product. To me, rollups are not just about like better scale or decentralization, but fundamentally to create a better product. So you know how the Solana people, they say the, the, the goal of Solana is to have like web two scale of blockchains. But I think like rollups are actually what will achieve that. And I had a thread, I had a tweet about this other day, but you can imagine like if you had a rollup sequencer,

• 40:09Speaker 02

  with a rollup, you can, for example, like, let's say PayPal wanted to become a, become a, like a rollup or compete with USDC or create some kind of stablecoin. They could easily kind of like make PayPal on chain by making it a rollup. And that sequencer would basically give, the rollup would give people a web two like experience without even knowing they're interacting with a blockchain. Because the sequencer, with, with, with rollup sequencer, you can get faster finality times than the base layer or any kind of consensus algorithm. So it's like Solana has, you know, 400 millisecond block times, but with a rollup sequencer that inherits base layer, system resistance and security, you can have web two level finality or, or latency, like 10 millisecond latency.

• 40:51Speaker 02

  And I think, and the fact that they can use their own execution environment means that they're not limited to kind of like having to work their system around how the EVM works. So to me, that's kind of like the real beauty of rollups, that you can literally just, you're in the future, basically literally get like any web two application.

• 41:09Speaker 01

  Give it and give it web three guarantees and their experience will be completely indistinguishable from using web two.

• 41:16David Hoffman?

  Well, guys, I've learned quite a lot going down this Celestia rabbit hole. There's a motto, a line, apparently, that is in the Celestia ecosystem and that I'll ask you guys to explain as we close this one out. What does it mean to have one gigabyte blocks, a billion light nodes and a million rollups? Can you just explain this vision, please?

• 41:34Speaker 01

  To achieve like what Mustafa mentioned, for instance, as vision, like you have like web two style applications and all this, you need like a very large block space, right? Like, we want to move away from the scarcity mentality and have like abundant and very inexpensive block space. And to achieve that, we want to aim for like massive blocks, but we don't want to, so that's the one gigabyte blocks, right? But we don't want to sacrifice decentralization and the verifiability of the chain. That's why light nodes are essential part of our vision and we want one billion light nodes, basically like light nodes running on your fridge and like on all machines everywhere,

• 42:18Speaker 01

  on your phone, in your browser. So these light nodes are necessary such that the massive blocks actually can be reconstructed in the case of a withholding attack, but also, yeah, also, we want to empower users to actually verify the chain. That's the one billion light nodes. And obviously, the applications on top are what matters. So that's the one million rollups we want. We already seen this with Dimension, 11,000 rollups, but we want to make it as easy as possible, such that like even today's web two developers come and say like, oh, I can also just deploy this as a rollup. So why not one million rollups?

• 43:04David Hoffman?

  Beautiful. Love it. When you guys are done with this podcast, it's Monday, so they've got a long, another long week of crypto ahead of us. Mustafa, what's the first thing that you're gonna go back and get working on? Like, what's the near-term focus for the Celestia team right now?

• 43:19Speaker 02

  So, yeah, I mean, in the short term, we're making various optimizations to the Celestia software, just to implement things like pruning. It's like very, these very short-term kind of optimizations that we have to do straight after mainnet, pretty much. Like, you know, a lot of the, kind of like, short-term is very boring, like this, kind of like, technical depth. But that will allow, that will enable the, enable the groundwork to have things like 1GB blocks.

• 43:46David Hoffman?

  And then what about the long-term? What's kind of the, the big landmarks ahead for the Celestia project?

• 43:52Speaker 02

  1GB blocks, 1 billion, 1 million rollups.

• 43:57David Hoffman?

  Awesome, guys. Well, if listeners are curious and they want to learn more, where should I send them?

• 44:02Speaker 02

  Yeah, celestia.org. There's lots of material on there, and also, material on how modular blockchains work as well, on celestia.org/learn.

• 44:11David Hoffman?

  Awesome. We'll get all of those links in the show notes. Mustafa Ismail, thank you so much for guiding us down the Celestia rabbit hole, and good luck. Congratulations on getting this, this project out there and seeing the light of day. And I, too, am very much aligned with the whole idea of a million rollups, so let's get it done. Thanks for coming on the show today.

• 44:29Speaker 02

  Thank you. Thanks a lot.

• 44:30David Hoffman?

  Cheers, guys. Bankless Nation, you know the deal. Crypto is risky, DeFi is risky, new chains are always risky. You can lose what you put in, but we are headed west. This is Frontier. It's not for everyone, but we are glad you are with us on the bankless journey. Thanks a lot.