The modular blockchain Celestia has recently performed well, sparking discussions in the market about whether Celestia will truly become an “Ethereum killer.” So, how is Celestia different from Ethereum? What threat does it pose to ETH? This article, written by Haotian, is sourced from X
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and compiled by BlockBeats.
Table of Contents
DA and Interoperability
Continued Chaos in Layer2
Conclusion
Celestia is one of the pioneers of modular public chains. Celestia takes a different approach and continuously infiltrates the Ethereum ecosystem with its Blobstream, which combines with Ethereum’s Layer2 OP Stack to launch a one-click chain deployment. With this, Celestia has almost conquered and continuously invaded the territory of Ethereum’s Layer2.
So, how should we understand the threat of Celestia to Ethereum? Will it really be an Ethereum killer? In my opinion, Celestia’s invasion war will continue to unfold in the Layer2 field. However, the result of this war is not a winner-takes-all situation but rather a “win-win” outcome. This is essentially the inevitable result of the highly modularized Layer2 market. Why? Let me explain my view.
When we break down the Ethereum blockchain system, there are two core components:
1) Data Availability
2) Interoperability.
As for other EVM execution layers and POS consensus layers, while they are also important, when it comes to Rollup Layer2, we focus more on DA and interoperability.
DA corresponds to the verification ability of Ethereum’s Validators. If Ethereum participates in DA, the mainnet Validators have the ability to verify the state transitions submitted by Layer2 to ensure security. If Ethereum’s DA is separated, the mainnet calldata and Blob blocks become the state transition bulletin board for Layer2, and the validity is determined by third-party DA consensus. Even if a premeditated “bad account” is submitted to the mainnet, the mainnet cannot make judgments or intervene.
Interoperability corresponds to Ethereum’s ability to communicate and interact with other chains, mainly involving asset settlement communication security between chains and effective solutions for liquidity interoperability. Currently, there are projects such as EigenLayer and some middle layer projects that focus on liquidity management.
These liquidity management solutions not only stabilize Ethereum’s asset settlement layer position but also release Ethereum’s consensus overloaded in a multi-chain environment. The key is that they can export the security consensus ability of Ethereum’s Validators to other chains, opening up new territories for Ethereum’s DeFi brand.
Celestia, one of the pioneers of modular public chains, should theoretically target the Cosmos IBC-involved public chains as its main target. After all, chains based on Cosmos IBC mostly focus on lightweightness, and it is a perfect fit for Celestia to build DA based on Celestia.
However, Celestia has infiltrated the Ethereum ecosystem with its Blobstream as an “external threat” and combined it with Ethereum’s Layer2 OP Stack to launch a one-click chain deployment as an “internal threat.” With this, Celestia has almost conquered and continuously invaded the territory of Ethereum’s Layer2.
As a Layer2 developer, the choice between DA orthodoxy and chain deployment cost is a tradeoff. DA orthodoxy is relatively more passive in the commercial market. It is suitable for comprehensive Layer2 projects that focus more on security consensus issues and have a certain brand foundation and market base. On the other hand, some emerging small Layer2 chains, especially those created through one-click chain deployment using OP Stack, will try to minimize costs.
Therefore, third-party DAs like Celestia are a better choice. Although EigenDA also provides Ethereum DA services, it cannot reduce the actual development costs for project parties developing Layer2.
For developers who choose to take shortcuts in running Layer2, cost will inevitably be the primary consideration. The biggest cost of Layer2 is the DA cost of Ethereum. Choosing a third-party DA with low cost to offset the market revenue pressure in the early stages of operation may be the preferred choice for most small and medium-sized developers.
So, whether Celestia will threaten Ethereum depends on the future development of Ethereum’s Layer2. If Layer2 gradually narrows down to comprehensive Layer2 platforms led by the “four kings,” DA orthodoxy will be the main theme. If Layer2 will see the emergence of various Layer2 solutions, cost considerations will remain valid.
Although there is still a variable of the Cancun upgrade, the trend of Ethereum’s Layer2 is already clear. There will be a large number of Layer2 solutions emerging for various reasons: the development of the “four kings” such as Arbitrum, Optimism, Starkent, and zkSync falling short of expectations, the decentralized issue of Sequencer, the problem of 7-day challenge not being implemented, the hardware acceleration problem of Prover systems, the problem of cross-chain escape pods for assets, the problem of token economic models unable to empower governance tokens, and the sluggish development of native DeFi, among others.
It is not an exaggeration to say that Layer2 development has left behind a basket of problems. Any one of these problems, when matched with a Stack framework and Celestia DA, can become a powerful development direction with capital narrative and imagination.
As I mentioned in my previous article, the chaos in the Layer2 market will truly unfold after the Cancun 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 DAs will become essential modular DA layers for Ethereum.
This is the inevitable direction for the commercial expansion of the Layer2 racetrack and the fundamental reason why Celestia, with its “thief-like” intentions, is still relevant to the Ethereum Layer2 ecosystem.
However, this is not only a threat to Ethereum but also a fundamental change in the Ethereum Layer2 landscape when more Layer2 solutions adopt third-party DA solutions like Celestia.
1) Comprehensive Layer2 platforms will become the foundation, occupying brand high ground in terms of liquidity, user volume, and application ecosystem. DA orthodoxy will be the core differentiating factor to ensure their solid position.
2) Innovative emerging Layer2 platforms will become extensions, focusing on innovation, diverse gameplay, market opportunities, and will attract waves of people to explore and mine. Flexibility and freedom are their trump cards.
Based on this line of thinking, Ethereum’s core Layer2 will become more stable, and the position of Ethereum’s DA will not be shaken. However, for some flexible Layer2 or Layer3, even if they are not based on Ethereum for DA, as long as they are built on the Stack framework on Ethereum, they will have a hard time escaping the control of Interoperability.
At that time, Ethereum, as the source of asset settlement and liquidity, will have a more flexible control over these flexible Layer2 chains.
If you don’t understand what I mean by this, just look at Celestia, whose price has skyrocketed due to a small number of trades. While Celestia is invading Ethereum, it will gradually lose its “comprehensive chain” attribute (which it didn’t have in the first place) and become a modular DA layer in the Ethereum ecosystem. So, even if many Ethereum Layer2 solutions adopt Celestia’s DA, as long as the framework of Stack and Rollup remains unchanged, these Layer2 solutions will continue to contribute to Ethereum.
Compared to the loss of DA orthodoxy, the rise of diversified and prosperous Layer2 and Layer3 markets will always make Ethereum the biggest beneficiary.