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The Bankless Guide to Celestia

Updated: Jan 2024
Bankless Bankless Jan 19, 20243 min read
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The Bankless Guide to Celestia

Celestia is a data availability (DA) blockchain created as an affordable and efficient hub for Layer 2 (L2) rollups to publish transaction data. 

Celestia helps projects launch their L2s by allowing rollup teams to sidestep needing to manage their own DA solutions and instead focus exclusively on their execution layer, where transactions occur. 

How Celestia Works

At the heart of Celestia's infrastructure is a Proof of Stake (PoS) blockchain that relies upon celestia-core, a modified version of the Tendermint consensus algorithm. Beyond this architecture, Celestia centers around two main features: data availability sampling (DAS) and Namespaced Merkle Trees (NMTs).

DAS is a technique that allows light nodes in the Celestia network to verify the availability of data without downloading entire blocks. This is achieved by splitting block data into chunks, encoding them, and then sampling these segments. Accordingly, light nodes can efficiently verify data availability by checking only a small portion of the block.

Additionally, Namespaced Merkle Trees (NMTs) are another key feature of Celestia. They allow the network to categorize data into different "namespaces," enabling applications to download only the data relevant to them. This selective data retrieval makes Celestia that much more efficient and scalable, particularly for apps that only need specific selections of blockchain data.

The Pulse of Celestia

The Celestia mainnet was launched in beta in October 2023. Given the network's recent launch, not many L2s are using it for their DA needs in production yet. 

However, a number of scaling solutions that are still in development have announced plans to tap Celestia for DA, including Hypr, Lyra Chain, and Nitrogen. Look for more projects to come online with the network in the coming months. 

The $TIA Token

The native currency of Celestia is $TIA, which has a genesis supply of 1 billion and a decreasing annual inflation rate, starting at 8% and settling at 1.5%. 

The token is used by developers to pay for DA on Celestia, and it's also offered as a ready-to-go gas token for new rollups. Through its PoS system, $TIA holders can secure the network by delegating tokens to validators, and the token additionally empowers holders to participate in Celestia's governance, enabling them to vote on network decisions.

At the time of this guide's latest update, $TIA was trading around the $17.48 price mark with a market cap of $2.77 billion, presently making it the 32nd-largest crypto.

If you're interested in staking $TIA to earn staking rewards and potential airdrops, it’s easy to get started here. The process looks like this

  • Create a Celestia wallet — A great option here is Keplr, a user-friendly browser wallet for Cosmos chains like Celestia that also offers a streamlined staking interface.
  • Acquire $TIA — The easiest path here is to buy $TIA on a crypto exchange like Coinbase or Kraken. When you have the funds you want to stake ready to go, deposit them into the Celestia address you generated in Keplr. 
  • Stake through Keplr — With your $TIA in hand, click on the “Manage Portfolio in Keplr Dashboard” button in your wallet. In the “Staking” hub, click on “Celestia,” and then choose a validator to stake with from the provided list. Input the amount of $TIA you want to stake and approve the final transaction with your wallet.

Getting Started with Celestia

To begin diving into the Celestia ecosystem, be sure to check out these helpful resources:

The Big Picture

Celestia has emerged as an efficient hub for L2s that want to simplify data availability challenges. Its innovative features, like data availability sampling and Namespaced Merkle Trees, enhance scalability and selectivity in data access. With its native token, $TIA, playing roles in staking and network governance, Celestia not only paves the way for streamlined blockchain development but also stands out in the market with significant potential for growth and influence in the crypto economy.

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