How to understand the threat of Celestia to Ethereum, is it an "Ethereum killer"?

Haotian

24-01-16 19:02

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Original author: Haotian

Editor's note: Celestia is one of the pioneers of modular public chains. Celestia takes an unconventional approach and continuously infiltrates the Ethereum ecosystem with its Blobstream tailored for Ethereum, coupled with the Ethereum Layer2 OP Stack, which has sparked a one-click chain launch. With this, Celestia has almost conquered and continuously invaded the territory of Ethereum Layer2.

How to understand the threat of @CelestiaOrg to Ethereum? Will it really be an Ethereum killer? In my opinion, Celestia's invasion war will continue to be fought in the layer2 field. However, the result of this war will not be a winner-takes-all situation, but rather a "win-win" situation. Essentially, this is the inevitable high modularity of the layer2 market. Why? Let me explain my views below.

We break down the Ethereum blockchain system into two core components:

1) Data Avaliability, 数据可用性;

2) interoperability, which means the ability to interact and operate with each other.

As for other EVM execution layers and POS consensus layers, although they are also important, when it comes to Rollup layer2, we are more concerned about DA and interoperability.

DA corresponds to the validation ability of Validators on Ethereum. If Ethereum participates in DA, the state transition process submitted by layer2 can be verified by mainnet Validators to ensure security. If Ethereum DA is separated, the mainnet calldata and Blob blocks become the state transition bulletin board of layer2, and the validity is determined by the consensus of third-party DA. Even if a premeditated "bad debt" is submitted to the mainnet, the mainnet cannot make judgments or interventions.

Interoperability refers to the communication and interaction capabilities between Ethereum and other chains, mainly involving asset settlement, communication security, and effective solutions for liquidity commonality between chains. Currently, there are mainly Restaking projects such as @eigenlayer and middle layer projects that manage liquidity.

These types of liquidity management solutions not only stabilize Ethereum's asset settlement layer status, but also release Ethereum's overloaded consensus to multi-chain environments. The key is that they can output the security consensus capabilities of Ethereum Validators to other chains, opening up new territories for the foundation of Ethereum DeFi brand.

Celestia is one of the pioneers of modular public chains. In theory, it should make the public chains involved in Cosmos IBC its main target, as most of the chains based on Cosmos IBC are lightweight and the choice of DA layer based on Celestia is a perfect fit.

However, Celestia takes an unconventional approach and launches Blobstream, which is aimed at continuously infiltrating Ethereum's ecosystem. Coupled with the one-click chain launch "internal disaster" brought about by Ethereum layer2 OP Stack, Celestia has almost conquered and continuously invaded the territory of Ethereum layer2.

As a layer2 developer, the only tradeoff that lies ahead is the balance between DA legitimacy and chain deployment cost.

DA legitimacy is relatively passive in the commercial market and is suitable for comprehensive layer2 projects that are more concerned with security consensus issues, have a certain brand background and market foundation. However, some new and innovative small layer2 chains, especially those based on OP Stack's one-click chain launching, will try their best to minimize costs.

Therefore, third-party DAs like Celesitia are a better choice. Although EigenDA also provides Ethereum DA services, it cannot reduce the actual development cost of layer2 for project parties.

For developers who choose to take shortcuts in layer2 operation and maintenance, cost will inevitably be the primary consideration. The biggest cost of layer2 is Ethereum's DA cost. Choosing a third-party DA with low cost to offset the market revenue pressure of early operation may be the preferred choice for most small developers.

Therefore, the key to whether Celestia will endanger Ethereum lies in the future development of Ethereum layer2. If layer2 gradually narrows down to comprehensive layer2 led by the four major kings, then DA orthodoxy will be the main theme. If layer2 will emerge like mushrooms after rain with various layer2 solutions, then cost consideration will always be the hard truth.

Although there is still a variable for the upgrade of Cancun, the trend of Ethereum layer2 is already very clear, and there will definitely be a large number of layer2 solutions emerging. The reason is not difficult to understand:

Arbitrum, Optimism, Starkent, zkSync and other four major players have not developed as expected. There are also issues with Sequencer's decentralization, the 7-day challenge of non-landing, hardware acceleration for Prover systems, EVM compatibility issues, asset cross-chain escape cabin issues, token economic model unable to empower governance tokens, and difficulties in the development of native DeFi.

It is not an exaggeration to say that layer2 development has left behind a large basket of problems. Any one of these problems, when taken out, could become a powerful development direction with the support of the Stack framework and Celestia DA, both of which have the potential to create a narrative imagination space with capital.

As I mentioned in a previous article, the chaotic situation in the layer2 market will truly unfold after the upgrade of Cancun, and the market will move towards "diversity" 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, and third-party DAs like Celestia will become a necessary component of the modular DA layer.

This is the inevitable trend of commercial expansion in the Layer 2 track, and it is also the fundamental reason why Celestia has a "thief's heart" for the Ethereum Layer 2 ecosystem.

However, this is not just a threat to Ethereum. As more and more layer2 solutions adopt third-party DA solutions like Celestia, the market position of Celestia will become more prominent, which will also drive changes in Ethereum's layer2 landscape:

1) Comprehensive layer2 platforms will become the foundation, with liquidity, user base, and application ecosystem occupying the high ground of the brand. The legitimacy of DA will become the core differentiator to ensure their strong position.

2) Personalized and cutting-edge layer2 platforms will become extensible, innovative, diverse in gameplay, and market expectations will attract waves of people to explore and mine, flexibility and freedom are the trump cards they hold in their hands.

Based on this idea, the core layer2 of Ethereum will become increasingly stable, and the position of Ethereum DA will not be shaken. As for some flexible layer2 or layer3, even if DA is not on Ethereum, don't forget that as long as they are built on the Stack stack based on Ethereum, it will be difficult for them to escape the control of Interoperability.

At that time, Ethereum, as the asset settlement layer and the source of liquidity, will form a more flexible liquidity control for these flexible layer2 solutions.

If you don't understand the meaning of what I'm saying, just take a look at Celestia, whose prices have skyrocketed due to the lack of trading. While invading Ethereum, Celestia will gradually lose its "comprehensive chain" attribute (which it never had), and become a modular DA layer in the Ethereum ecosystem. So what if many Ethereum layer2s adopt Celestia's DA? As long as the frameworks of Stack and Rollup remain unchanged, these layer2s will continue to "pay taxes" to Ethereum.

Compared to the loss of DA orthodoxy, the diversified and prosperous layer2 and layer3 markets are rising, and Ethereum will always be the biggest beneficiary.