On Celestia's business philosophy: Can it be feasible to attract Ethereum Layer2?

This article does not involve much technical interpretation, but rather focuses on the situationAnalyze Celestia's current business ideas and situation. Celestia's self positioning is the "best DA layer" under modular blockchain narrative

This article does not involve much technical interpretation, but rather focuses on the situationAnalyze Celestia's current business ideas and situation. Celestia's self positioning is the "best DA layer" under modular blockchain narrative.

Celestia has created its own public chain, which provides data publishing services specifically for the Rollup project, also known as DataPublication. One thing to ensure in 'data publishing' is:Individuals who need to obtain the latest data can quickly obtain the necessary data.In the past, many people referred to data publishing as data availability,Confusing it with retrievable historical data is a misconceptionThis is being continuously corrected by the Ethereum Foundation and Celestia officials.

If you have a simple understanding of Rollup, then the following content will be easy to understand: Celestia believes that Ethereum expansion networks similar to Layer2 can beNewly generated dataPublishing to the Celestia chain instead of directly publishing to Ethereum can save over 90% of processing fees. Taking OrbitrumOrbit as an example, Orbit's sequencer can publish the latest data from Layer2 to Celestia's blocks. Then, nodes that need to obtain this part of data (such as Orbit full nodes) can run Celestia's light nodes to obtain the data published by the sorter from Celestia full nodes.

As for Celestia's token TIA, the main application scenarios areData publishing fee+POS node pledgeIf a Rollup project chooses Celestia as the DA layer, there will be a processing fee for each data release; At the same time, the Celestia main chain, which is specifically used to carry the data published by Rollup, has a maximum of over 200 validator nodes, and TIA tokens are the assets that validators need to pledge in advance.

Although the official document of Celestia mentions that TIA tokens can also be used as gas payment tokens for the Rollup project within the Celestia ecosystem, this proposal is not mandatory. At the same time, TIA will also be used for Celestia's governance in the future, such as voting on some parameter adjustments in Celestia's network. Comparing TIA with ARB and OP, it is not difficult to see that the former has an additional seemingly high-frequency application scenario: as a handling fee for data publishing.

If many expansion projects in the future really adopt Celestia as the DA layer, and these projects have abundant liquidity and users, and can continue to create application conditions for TIA tokens, then it can indeed strengthen TIA. To put it further, as long as Celestia is fully recognized by the industry and even the market, and the ecological construction is successful enough, even if TIA, like ARB, is simply used as a governance token, it can still be fully priced by the market. But the viewpoint that this article aims to raise is exactly the opposite:Celestia may not be fully recognized by the market or even the industry, and its attempt to attract liquidity from within the Ethereum Layer2 system may face resistance,Their situation may be similar to EigenLayer.

(Image from an article by TokenInsight titled 'Resting King: Is EigenLayer's Business Model a Golden Idea or a Dross?')

Whether the project is successful or not, technology/narrative is not the first priority, but the most important thing is to assess the situation

If we want to discuss whether Celestia can be fully recognized by the market and industry in the future, it is actually equivalent to discussing a very philosophical question:What are the most important factors that determine the success of a project? Does Celestia possess these elements?Here, the author briefly explores the first point. If we look back at history and examine public chains such as Polygon, Flow, Avalanche, Infinity, Solana, Nervos, etc. that were established and launched on the main network during the same period, it is not difficult to see that the most successful one among them is Polygon. Although it is considered by many to be the weakest technology in the public chain mentioned above, it is undoubtedly the most successful one.

Polygon's ecological construction is more successful than several other research subjects,Its token market value, DAPP carried, and various types of data are among the top, and Trump has previously chosen to issue exclusive NFTs on Polygon. Its' whole family bucket 'also includes a variety of things such as Ethereum Layer2 (PolygonzkEVM), independent public chain (Matic), DA network (Avail), and ZK related teams such as PolygonZero, PolygonMiden, and PolygonNightfall, exploring different technical directions. At the same time, Polygon also has an open-source modular blockchain suite, PolygonCDK, which seems to have a more complete modular blockchain stack than Celestia.

(Image source: Messari)

Polygon loves to 'follow the big trend',Especially in 2020, I advertised myself as Plasma to cater to the needs of the Ethereum Foundation, which attracted a lot of liquidity and obtained a considerable amount of resources. In the eyes of many technology supremacists, Polygon, which was originally weak in technology, quickly elevated its "status in the world" by catering to the Ethereum Foundation. Later, it invested heavily in acquiring multiple technology teams related to ZK and modular blockchain, gradually building its own business empire.

In contrast, projects such as Flow, Avalanche, Infinity, Solana, and others have stronger technologies than the original Polygon, but their current comprehensive strength is weaker than Polygon. Among them, Solana has also been quite successful with the long-term support of the FTX exchange (Anatoly spared no effort in promoting her project to the latter in order to persuade SBF); Avalanche has also been relatively successful in developing BD with the support of overseas capital, EVM compatibility, and a large amount of investment.

But these two seem to be not particularly optimistic about Layer2's narrative and have not invested heavily in it, and to some extent, they are not as good at "taking advantage of the situation" as Polygon.From 2021 until today, blockchain has not been a suitable field for mass adoption, as the upstream supporting facilities are extremely imperfect, and user access is severely restricted

Layer2 only makes sense when Layer1 carries excess liquidity, and simply meeting Layer2's needs technically is not the optimal solution

Ultimately,For a project, the most important thing has never been whether the technology is impressive or the narrative is attractive, but whether it can assess the situation in the context of the times and find the most appropriate business operation path.However, this is precisely the weakness of many academic teams. In the fraught business world, they have never emphasized the importance of "technology first" or "honor and morality first", only "success and defeat". Many teams with unique technology/advanced concepts ultimately did not gain their rightful position, and it was precisely because they were not flexible enough in commercial operations that they ultimately resented the Northwest.

What are the issues with Celestia's business operation philosophy

Let's take a look at Celestia: Are there any issues with its commercial operation path?Or is there a good way to "assess the situation"? It should be emphasized that Celestia's modular blockchain and DA layer narrative require a public chain with abundant liquidity and overflow phenomena as the corresponding settlement layer, which is actually Ethereum. If Celestia were completely disconnected from the Ethereum ecosystem, the narrative of its modular blockchain would not have much significance, as the situation of Nervos mentioned earlier has already revealed. However,To attract liquidity from Ethereum without directly empowering Ethereum itself seems to be a makesense approach.If we carefully observe the changes in the attitude of the Ethereum Foundation towards Layer2, it is not difficult to observe this.

In previous articles on Geek Web3, we have repeatedly emphasized that,The Ethereum Foundation and L2BEAT have clearly clarified that expanding the DA layer without Ethereum is not Ethereum Layer2,DACelestiaValidator200EigenDADARollupLayer2Plasma

(Image source: L2BEAT)

Regarding the intention of the Ethereum Foundation's approach, many people believe that it is actually using the differentiation of technological solutions to safeguard their own commercial interests. The reason is self-evident:If the DA layer outside of Ethereum, such as Celestia and EigenDA, is adopted on a large scale, the status of Ethereum will inevitably be weakened, and the significance of EIP-4844 and Danksharing that the Ethereum Foundation has invested a lot of effort to achieve will no longer exist.

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The author would like to share two interesting things here:

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Celestia.CelestiaWeb3.

Intention may bring different results

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Layer2..IntentSolanaDAPP"".

We can imagine that in the future blockchain world where Intent and full chain operations are the mainstream narratives,People don't need to have awareness of the existence of Ethereum and Layer2, they just need to perceive DAPP itself or even its front-end, and everything may changeDAPP.DAPPbaseCelestiaDACelestiaLayer2.CelestiaWeb3..