What is Celestia (TIA): modular blockchains for a scalable future

If you've been in the crypto scene for long enough, you'll definitely have heard of teething issues like network outages for layer-1 blockchains like Solana and Aptos. These issues can be traced back to the monolithic design of such blockchains, where bottlenecks occur because networks are overwhelmed by complex transactions and user demand. Fortunately, with modular blockchain projects like Celestia and its TIA tokens, such overhead constraints due to the blockchain trilemma will become a thing of the past.

As a modular blockchain designed to scale up while keeping fees down, Celestia leverages an open-source approach and allows developers to use their own consensus algorithms and build custom modules on top of it. This means that instead of having one blockchain for all transactions, there can be multiple chains running in parallel, which makes the whole network faster and more reliable.

Keen on finding out more about Celestia and how it intends to resolve scalability issues? Read on as we cover all you need to know about Celestia and its TIA token.

What is Celestia?

As the answer to today's monolithic blockchains, Celestia is a modular data availability (DA) network that securely scales with the number of users, making it easy for anyone to launch their own blockchain. By focusing on transaction ordering and publishing, Celestia keeps the Consensus Layer separate from execution and settlement functions — freeing up crucial shared network resources.

Before diving into the specifics of Celestia and how it works, it's important to first understand the benefits of modular blockchains and why there's a need for them as we push the boundaries of blockchain technology.

What are modular blockchains?

Modular blockchains are a type of blockchain where developers can break down the components of the system into smaller, more manageable pieces. This allows them to easily customize and adjust any one aspect of the blockchain without needing to completely overhaul the entire network. By modularizing their blockchain, developers have greater control over how their system functions, allowing them to quickly adapt it to different scenarios and conditions.

Modular blockchains vs. monolithic blockchains

Curious about the differences between monolithic and modular blockchains? Essentially, monolithic blockchains have everything built on a single chain. This means all transactions have to go through one consensus mechanism and the size of data on it must stay within certain limits for it to function properly.

Conversely, modular blockchains offer more flexibility by separating the responsibilities of handling these various layers. Developers can choose between different modules to customize the execution, consensus, data availability, and settlement functions of their blockchain. This customization allows them to create specialized networks tailored for specific applications and use cases, while still keeping the core functionality of the blockchain intact. Overall, this makes modular blockchains the ideal option for organizations that need a reliable and efficient blockchain infrastructure that can easily be adjusted according to their needs.

How does Celestia work?

In short, Celestia is a stripped-down layer-1 blockchain that focuses solely on ordering transactions and making the data for transactions available. The blockchain doesn't handle smart contracts or perform computations. Instead, such functions are outsourced to rollups or other blockchains as part of Celestia's focus on modularity and flexibility instead of maximalism. This opens up endless possibilities as users can mix and match layers akin to a sovereign rollup that establishes its own execution environment. Users can essentially pick their own execution and settlement layers while taking advantage of the data availability function that Celestia excels in.

Data availability sampling

What makes Celestia excel in data availability is through data availability sampling (DAS). This is accomplished by letting multiple resource-limited light nodes — which are nodes that can run on cheaper hardware and slower internet connections than other node types — check if the data is correctly encoded by randomly sampling block transactions. Since Celestia doesn't need to worry about transaction validity, block verification only needs to handle data availability verification and light nodes won't have to download entire blocks.

Erasure encoding

To gauge whether data is being encoded correctly on blocks, light nodes make use of erasure encoding. When sending or storing information, light nodes add extra information for redundancy and recovery to protect the data being transmitted. If data gets lost in the middle of data transmission and storage, light nodes will make use of the extra information to fill in the gaps and recover the original data. Erasure encoding goes much deeper and involves parity backup information using Reed-Solomon's algorithm, more of which can be explored on the official Celestia website on its data availability layer.

Why is Celestia so popular: the Celestia airdrop

Since the project began in 2019, crypto traders and enthusiasts have long been excited about Celestia's token launch. This has only been magnified by the hotly anticipated Celestia airdrop, where 60,000,000 TIA tokens are being distributed to a wide range of active users across blockchain networks. This Genesis Drop has certainly amplified that excitement about Celestia being the next big thing in the crypto space and will include the following users:

• Top 50% of active users of the top 10 Ethereum rollups by TVL, with a balance of at least $50 based on a snapshot taken on 1 January, 2023. Eligible rollups include but aren't limited to Optimism Mainnet, Arbitrum One, Arbitrum Nova, Starknet, and Loopring.

• Cosmos Hub and Osmosis stakers and delegators of at least $75 based on a snapshot taken on 1 January, 2023.

• Various public GitHub contributors to the Celestia codebase across Modular Summits and Celestia's Modular Fellows program.

With TIA token futures trading at $3.15 prior to the public launch of TIA, it's fair to say sentiments for TIA tokens are optimistic. However, as with all newly launched and publicly traded projects, it's important for crypto traders to first understand the risks involved before diving in to trade it.

What is TIA: understanding TIA token utility

As the native token of the Celestia blockchain, TIA is an essential part of how developers will build on Celestia and use it for data availability. According to Celestia's white paper, TIA tokens will have the following uses:

Bootstrapping new rollups

A core tenet of Celestia's vision is blockchain deployment simplification such that anyone can effortlessly launch and deploy their own blockchain. With TIA tokens, developers won't need to issue tokens to complement their blockchain's launch. Like ETH on Ethereum-based rollups, developers can choose to bootstrap their chain quickly by using TIA as a gas token and currency. In doing so, developers can instead focus on creating their application or execution layer without fretting about token creation and issuance.

Paying for blobspace

TIA tokens are key to how developers build and interact with Celestia. To publish data on Celestia and use it for data availability, rollup developers submit PayForBlobs transactions, which consist of typical transaction information like sender identity, the data to be made available, the data size, the namespace, and a signature. These transactions will require a fee, which is paid for in TIA tokens.

Staking rewards

As a permissionless network based on CometBFT and the Cosmos SDK, Celestia uses the proof-of-stake consensus mechanism to secure its network. Like in other Cosmos networks, users can help secure the network by delegating their TIA tokens to a Celestia validator for a portion of their validator’s staking rewards. Notably, Celestia supports in-protocol delegation and will start with an initial validator set of 100

Decentralized governance

Centralization among founding developers can be a red flag for many blockchain projects. Fortunately, Celestia leans towards decentralized governance regarding overall decision making. Unlike some governance tokens which require staking to unlock voting rights, users simply need to hold TIA tokens to have the right to vote and submit governance proposals to alter existing network parameters, fund ecosystem initiatives, and manage the community pool. Said pool will also receive 2% of all Celestia block rewards.

TIA tokenomics

Has Celestia's TIA token piqued your interest? Here are some tokenomics to keep in mind:

• TIA will have a total supply of 1,000,000,000 and an initial circulating supply of 14.1% (141,000,000 TIA).

• 20% of TIA's total supply is allocated to the public and will be used for Celestia's testnet incentives and future initiatives.

• TIA tokens will have an inflation schedule of 8% in the first year and a subsequent decrease of 10% per year until reaching an inflation floor of 1.5% annually.

Celestia Trade and Earn Campaign

Set on trading TIA tokens? Celebrate Celestia's listing on OKX by taking part in our Trade and Earn Campaign. Do note that each user can only participate in one campaign at any one time. If a user participates in multiple campaigns, only the last campaign registered will be rewarded.

Deposit and buy to earn from a 10,000 USDT prize pool

If you're a new user looking to trade TIA, good news — you can get rewarded by following the steps below.

1. Sign up for an OKX account.

2. Deposit at least 50 USDT or USDC.

3. Buy at least 50 USDT or USDC worth of TIA as your first trade and stand to earn 10 USDT*.

* Rewards are limited to the first 1,000 new users who complete all the steps.

Trade $100 of Celestia to get $5 of Celestia back

Additionally, be one of the first 1,000 users to have an accumulated trading volume of $100 of TIA to get rewarded with $5 worth of TIA at its opening price**.

** Rewards are limited to the first 1,000 users who make $100 worth of trades in TIA.

Final words and next steps

Modular blockchains represent a breakthrough in the blockchain trilemma that developers and users are often faced with. As a blockchain's throughput is often held back because of limited network resources and balancing with blockchain essentials like security and decentralization, Celestia certainly seems like a breath of fresh air in how it's handling the scalability aspect of things.

With Celestia making headway thanks to its innovative introduction of DAS and Erasure Encoding, Celestia as a project and TIA tokens may have a bright future ahead when it comes to making waves in the popular layer-1 blockchain space.

Keen to learn more about Celestia's native token? Check out the TIA token with us today.