What is Celestia and How Does It Work?

Everything you need to know about Celestia, one of the first modular blockchains in the world!

In October 2023, the blockchain world saw a major shift with the launch of Celestia — the first truly modular blockchain. It went live on October 31, generating buzz through a massive airdrop of its native token, TIA, to 580,000 users.

What makes Celestia unique is its modular design, which separates execution from consensus. This gives developers the freedom to build custom blockchains more easily and efficiently. Celestia’s launch marked the beginning of a new era in blockchain design.

In this article, we’ll explore how Celestia works and why its modular approach could change the future of Web3.

What is Celestia?

Celestia is a modular data availability (DA) layer designed to help developers launch their own blockchains more easily. It acts like a “Dropbox for blockchain data,” letting other chains store and access data without needing to manage their validator sets. This makes building new blockchains cheaper, faster, and more scalable.

Instead of doing everything in one place like traditional blockchains, Celestia separates data availability from execution. It focuses on ordering and making data available, while developers can design their execution environments. This flexibility is ideal for creating custom Layer 2 rollups, especially those built for specific apps.

By taking care of data availability and consensus, Celestia removes the need for every new chain to reinvent the wheel. Developers can focus purely on building high-performance, app-specific blockchains while Celestia ensures secure, low-cost data access.

This modular design allows more innovation, faster development, and greater scalability across the blockchain space. As a result, Celestia plays a key role in the future of rollups and Layer 2 solutions by powering a new generation of lightweight, flexible blockchains that don’t need to compromise on speed, cost, or performance.

How Does Celestia Work?

Celestia is a modular Layer 1 blockchain designed to handle only two key tasks: ordering transactions and making their data available. It does not process smart contracts or run computations. Instead, it leaves those tasks to other layers, like rollups or custom chains. This design allows developers to choose their own execution and settlement environments while relying on Celestia for secure and scalable data availability.

Celestia uses a unique method called data availability sampling (DAS). Light nodes randomly check parts of each block to confirm that the data is correctly encoded. These light nodes are lightweight, meaning they don’t need expensive hardware or fast internet to function.

Celestia uses erasure encoding to ensure the data is complete and accurate. This method adds extra information during data storage so the network can recover missing pieces if anything gets lost.

Celestia runs on a proof-of-stake (PoS) consensus system with validator nodes and supports staking delegation. It has two main types of nodes: validator (consensus) nodes and data availability nodes, which include light, full, and bridge nodes.

Developers can build rollups — including optimistic or ZK rollups — or launch custom chains, using Celestia to handle consensus and data availability.

Celestia Key Features

Here’s what Celestia offers to its users:

Data Availability Sampling (DAS)

Celestia uses Data Availability Sampling (DAS) to keep the network secure and scalable. Light nodes randomly sample small pieces of transaction data to verify that entire blocks are valid. This makes it easy for anyone with internet access to run a light node, since little computing power is needed. As more light nodes join, more data can be checked, which improves the network’s scalability and decentralization.

Namespaced Merkle Trees (NMTs)

Celestia’s Namespaced Merkle Trees (NMTs) help apps manage and verify their own data efficiently. Unlike standard Merkle trees, NMTs let each app access only its specific data using a unique namespace. This avoids the need to process irrelevant data from other apps and improves performance.

Sovereign Rollups

Celestia supports “sovereign rollups,” which are rollups that run independently from the consensus and data availability layers. Unlike Ethereum rollups that depend on the main chain’s smart contracts, sovereign rollups on Celestia handle their own execution and can post raw data directly to the chain. This gives developers full control and flexibility, allowing each rollup to function like its own Layer 1 blockchain while still benefiting from Celestia’s shared infrastructure.

Celestia’s Rollups-as-a-Service

Celestia’s rollups-as-a-service makes launching a blockchain simple and fast. With one click, developers can create their own rollup without needing validators, token launches, or complex consensus systems. Celestia provides the data availability layer, turning blockchain creation into a plug-and-play experience. This reduces cost and time, making it easier for projects to build and scale.

The future of rollups may see either a few dominant players or an explosion of app-specific rollups. EIP-4844 will boost Layer 2 scalability, possibly favoring general-purpose rollups with strong network effects. Meanwhile, app-specific rollups will continue to grow, giving each application its own dedicated chain, enabled by Celestia’s modular design.

What is TIA?

TIA is the native token of the Celestia blockchain. It plays a key role in how developers build on and interact with the network. TIA can be used to launch new rollups without the need to create a new token. Like ETH on Ethereum, TIA can serve as the gas token for new blockchains built on Celestia.

TIA is also used to pay for blobspace — Celestia’s way of storing data for rollups. Developers submit “PayForBlobs” transactions to publish data, paying a fee in TIA based on size and content. The network uses a proof-of-stake model. TIA holders can delegate their tokens to validators to help secure the network and earn staking rewards in return.

TIA also enables decentralized governance. Token holders can vote on proposals, make changes to the network, and manage community funds. Unlike some blockchains, you don’t need to stake your tokens to vote — just holding TIA gives you governance rights.

Overall, TIA supports Celestia’s mission to simplify blockchain deployment and make data availability scalable, secure, and developer-friendly.

Closing Thoughts

Celestia represents a new chapter in blockchain design. It focuses only on ordering and sharing data, letting developers build their own execution layers. This modular approach lowers costs, boosts performance, and enables more tailored blockchain experiences. Instead of one-size-fits-all chains, Celestia supports app-specific rollups that do one thing well.

Backers like Chris Burniske see this as the next big wave, though investors should always think critically. Still, Celestia’s role as the data layer for the modular future is hard to ignore. As blockchains become more specialised, Celestia may quietly power the next generation of innovation behind the scenes.