Bankless - Is $TIA Modular Money? | Nick White

Episode Date: April 16, 2024

In today's episode, David delves into the interesting dynamics between Ethereum and Celestia. While Ethereum and Solana are often seen as the main rivals, Celestia shares similar design philosophies and goals but with notable differences. Is it Ethereum's true competitor? Joining us to help answer that question and much more is Nick White, COO of Celestia Labs. ------ 📣 SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24  https://bankless.cc/spotify-premium   ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2    ⁠   🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo  🔐 SAFE | ATTEND SAFE{CON} https://bankless.cc/SafeCon ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum   🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle  🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/toku  ------ TIMESTAMPS 0:00 Intro 5:28 Celestia 2 Years Ago 6:30 Build Whatever & DA 11:29 Celestia Design Architecture 19:15 Ethereum vs. Celestia 22:26 Celestia No Virtual Machine Trade-Offs  29:57 Sharing DA Layers & Blockchain Interoperability 37:23 Celestia Trustlessness 42:09 DA as a Commodity?  54:09 Network Effects of DA 57:35 $TIA’s Role in Celestia Ecosystem 1:01:50 Lightnodes  1:04:57 $TIA’s Moneyness 1:10:20 Execution & Settlement Layers 1:16:46 Cosmos & Celestia & Ethereum 1:21:56 Sovereign Endgame  1:26:42 Closing & Disclaimers   ------ RESOURCES Nick’s 1st Bankless Episode  https://youtu.be/bmSU3cZhe3U   Nick White https://twitter.com/nickwh8te   Celestia https://twitter.com/CelestiaOrg   ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠  

Point of build whatever is there's no optimal point. It's all like a tradeoff curve, right? And Celestia is optimizing for a certain thing. Ethereum optimizes for a different thing. And again, also to tie back, that's why they're not commodities because they're just going to be very different. It's like Ethereum block space is going to be different than Celestia block space because they make different choices.

They're optimized for different things. I think that like Celestia just has a different philosophy and that results in different design. Welcome to Bankless, where we explore the frontier of internet money and internet finance. And today, we explore the frontier of Celestia and the roll-up landscape that it wants to bring into the crypto universe. Bankless Nation, there is a paper-thin wall between the design of Ethereum and the design of Celestia. These two networks are both designing for very similar outcomes. It's often discussed that Ethereum and Solana are the biggest competitors out there,

but I actually think the reason why these two networks are positioned, as big competitors, it's because the design philosophies of Ethereum and Solana are just completely opposed to each other. I suggest to you, Bankless Listener, that it's actually Celestia that is the real competition to Ethereum, because it's made the same choices, optimizing for the same outcome, but with just some few key differences that we're going to unpack here on the show today. Perhaps this is also why there is a much more friendly relationship between these two ecosystems between Celestia and Ethereum, because despite being more meaningful competitors, our values are the same. So personally speaking, if Celestia won the Game of Thrones in crypto, I would actually

still consider that a positive outcome for the preservation of crypto values and the bankless thesis to which I hold dear, and to which other networks I could not say the same for. Today on the show is Nick White, the C-O-O of Celestia Labs and has been with Celestia from the earliest of days. We had Nick on the show about two years ago, but since then both, Celestia and my understanding of it has grown quite a bit. And also this meme of Tia as modular money has also emerged. And whenever some token presents itself as money in the crypto space, I immediately want to go kick its tires and see where that idea holds up or where it breaks down. So let's go ahead and get right into the episode with Nick White from Celestia Labs. But first, a moment to talk about

some of these fantastic sponsors that make the show possible, especially Cracken, our preferred crypto exchange in 2024. If you do not, have an account with Cracken. consider clicking the links in the show notes to getting started with Cracken today. If you want a crypto trading experience backed by world-class security and award-winning support teams, then head over to Cracken, one of the longest-standing and most secure crypto platforms in the world. Cracken is on a journey to build a more accessible, inclusive and fair financial system, making it simple and secure for everyone, everywhere, to trade crypto. Cracken's intuitive trading tools are designed to grow with you,

empowering you to make your first or your hundredth trade in just a few clicks. And there's an award-winning client support team available 24-7 to help. help you along the way, along with a whole range of educational guides, articles, and videos. With products and features like Cracken Pro and Cracken NFT Marketplace and a seamless app to bring it all together, it's really the perfect place to get your complete crypto experience. So check out the simple, secure, and powerful way for everyone to trade crypto, whether you're a complete beginner or a seasoned pro. Go to crackin.com slash bank lists to see what crypto can be.

Not investment advice, crypto trading involves risk of loss. Have you heard about Safe? They're not just pioneers in crypto custody. They're also leading the transition to the world of sports. smart accounts. With SAFE, managing your crypto has never been smarter or safer. They've recently passed a $100 billion in total value secured and are now deployed everywhere with over 15 supported networks. But that's not all. Safe is revolutionizing the game with their full compatibility with ERC-4337, making embedding wallets super easy to integrate into your daily crypto activities.

So, what are you waiting for? Head over to SAFE.combeau to join over 8 million others in securing your crypto. And while you're there, don't forget to check out SAFECon happening during during the Berlin Blockchain Week, where the future of smart accounts is unfolding in real life. Secure your spot today and be a part of the transition to smart accounts. Click the link in the show notes to learn more and take your first steps towards smarter crypto management. Selo is the mobile-first EVM-compatible carbon-negative blockchain built for the real world. Driving real-world use cases like mobile payments and mobile defy. And with Opera MiniPay as one of the fastest growing Web3 wallets,

Sello is seeing a meteoric rise with over 300 million transactions and 1.5 million monthly active addresses. And now, cello is looking to come home to Ethereum as a layer two. Optimism, Polygon, Matter Labs, and Arbitrum have all thrown their hats in the ring for the cello layer two to build upon their stacks. Why the competition? The cello layer two will bring huge advantages like a decentralized sequencer, off-chain data availability secured by Ethereum validators, and one block finality. What does that all mean for you? With Cello layer two, gas fees will stay low and you can even pay for gas natively using ERC20 tokens, sending crypto to phone numbers across wallets using Social Connect. Sello is a community governed protocol.

This means that Sello needs you to weigh in and make your voice hurt. Join the conversation in the Sello forums. Follow Sello on Twitter and visit Sello.org to shape the future of Ethereum. Bankless Station, I'm here with Nick White, C-O at Celestia Labs. Nick, welcome back to the podcast, my man. Thank you, David. I think it's been almost exactly two years since I first came on bankless. So I'm thrilled to be back.

Yeah, and two years ago, let me tell you, I had much less of an understanding. of what Celestia is. I think even we were using like lazy ledger as like the name for this whole system. And the concept of DA was just very foreign to me. So I'm hoping to do kind of just like a reprise of that same podcast. But your host this time has a lot more knowledge to ask the right questions and take this conversation into the right direction. Celestia has like the project has grown immensely and has really like redefined an

entire meta. So A, just like, congrats on the success, my man. Like, what's it been like over the last like two years of Celestia? Like, give us a peek behind the scenes. Well, it's been a grind. There's been a lot of work happening behind the scenes. You know, people like to, you know, call things overnight success or whatever. But really, the reality is it started way back in 2019.

And maybe even earlier in 2018 when Mustafa and folks like John Adler, some of the co-founders of Celestia were, you know, researching roll-ups in L2s back when no one was talking about them, you know, forming the foundation of data availability sampling and all the technology that now is, is live and in production and forms a basis of modularity. So it's been a huge amount of effort and work to get where we are. And I think to us, it was kind of inevitable because these things just make so much sense when you get to the bottom of it. It's like this is, this is the right way to build blockchains. One thing I appreciate about Celestia is that there is a notion of like a logical conclusion of the design construction.

Like from first principles, like you can arrive at the conclusion of Celestia. And so maybe we can kind of start there. Like Celestia's motto is build whatever. And I think going into the design construction of Celestia, people listening to the podcast will be able to understand like why and how that motto emerges. But maybe you can just kind of walk us through like the first principle is nature of Celestia. Why?

Celestia, it's a data availability layer. Maybe you can kind of like walk us through just the base foundations of like the theory, the thesis behind Celestia and why might might one be interested in building a blockchain that starts using, starts with DA first and foremost to build like to be at the bottom of the stack. What does it mean to build whatever and how did you start here at DA? So first, what is Celestia? Well, you can think of what Celestia is the first modular blockchain network. And the goal of Celestia is to make it easy for anyone to securely launch their own blockchain. So you can kind of think of Celestia as an L1 that's been designed from the ground up to do one thing, which is to provide secure and scalable data availability for roll-ups.

And so now to go like a step further, like, well, what does it mean to be a modular blockchain, right? And this is kind of what ties into the build-whatever concept. Monolithic blockchains, which is pretty much every blockchain up until, you know, the first roll-ups and Celestia came along, were blockchains where all the functions were combined and coupled into one protocol. And so the nodes in that protocol had to do all the functions of running a decentralized application at one time. And when you do things that way, you fundamentally have a bunch of constraints that when you take a modular approach where you decouple those functions and break them into separate

protocols that are optimized for that and that can be remixed, you get all the this, you remove those constraints and you have all this freedom as a developer, as a builder, to build new things that weren't possible before. So build whatever is touching on this aspect of modular blockchains that really removes all the constraints and just blows the doors open and what's possible. So that's really what Bill Whatever is about. It's about, so first of all, you know, what are some of the constraints to get removed? First, scalability in a modular system becomes like is significantly better because you have a really high performant data availability network at the bottom which provides this very cheap, scalable, secure

block space. And that's enabled by data availability sampling. Then you have roll-ups which scale the execution part. So all of a sudden, you can have a blockchain that can have really high throughput while still being secure and trust minimized and all the things that we want. And that wasn't really possible before those two. innovations. That's the first thing. Scalability. You don't have to worry about the

throughput and congestion and all those kind of things. And get dedicated block space, basically, because you're running your own chain. The second thing is that you get to mix and match the different components so that you can actually choose the kinds of features that you want your chain, your

application to have. So you can choose different data availability layers with different properties, different tradeoffs. You can choose different execution layers. You don't have to be just in the EVM or the SLONABM. You can choose any kind of VM or build your own custom execution environment. You can choose various kinds of fast confirmations like sequencing schemes to have, you know, different tradeoffs or different kinds of mempools that have MEV tooling or, you know, privacy enabled features. And so all these

different pieces can be, and you can control the economics of your chain as well, which is really important because you can all of a sudden, instead of giving all the value back to the L1 that you built your application on, you can actually capture some of the value that you're creating as the application builder for yourself and for your community and your network. And so it's all those kind of things that as a builder, like open the door wide open to what you can build. So build whatever is like whatever you can imagine, you can build. Like let's let's explain. And we want to explore and encourage the exploration of this design space. Because ultimately how how we get from where we are to where, where blockchains and web three are used on a daily basis worldwide is by by app builders

experimenting and showing us what's possible because you know ultimately a lot of people also say like oh well module blockchains are just a bunch of infrastructure without real users or real applications well and and so it's like you know you guys are just really just i don't know it's kind of like a uh i don't know you guys aren't actually thinking about the end product um or what like the real users But really, modular blockchains are about that. And it's about experimenting and unlocking new capabilities that I think are going to be the key to figuring out how blockchains become useful, you know, for the rest of the world. Baked into, there are some opinions in the Celestia model. There are opinions in every single layer one.

And so I kind of want to, like, define what the opinions are of the Celestia design architecture. First and foremost, like modularity, of course. but like first and foremost I think like there are the celestial model is opinions that there will be many many many many blockchains. And in fact, it's trying to encourage the growth of that. And what do all blockchains do is that they need to provide like assurances and verification about their state externally so that the world can verify the state of all of these blockchains. And so like, you know, every single blockchain like with that we've had from the beginning of time, has some sort of just like node set internally. Like, like Bitcoin has nodes.

Bitcoin has nodes. Ethereum has nodes. You know, pick your blockchain. It's got some nodes doing some verification. And that verification is some sort of data. And all these nodes are verifying the data of the state of some particular chain. And so Celessia's opinion is that like, hey, like, we will be the place where that data is posted. We call this data availability.

That's what Celestia is providing to the world. And there's some sort of like opinion that like data available. is like at the bottom of the stack because in order to have verification of all of these blockchains, we need to verify the proofs, the state proofs of all of these different chains. And so like I think one of the opinions of Celessia is that it's a multi-chain world. There's going to be infinity different chains and actually like not only was there, we can actually encourage that. And we can actually support more and more chains by actually doing one of the, one of the jobs

that all chains have, which is. the verification of the state. And whether you're an Ethereum layer 2 and you are posting your fraud proofs or your blobs to blob space, it's kind of doing the same role. Or to the Celestia data available. There is proofs,

there's statements about the state of all of these chains, and you can post them on Celestia in order to get the security of people able to verify the state of all these things. And so this is something that's like, this is just fundamentally true about crypto. This is not something that Celestia invented. this is something that Celestia discovered and is now optimizing for.

And so when I hear like kind of the build anything model or the, excuse me, the build whatever motto, to me it's like Celestia is providing this like space for blockchains to do something that they all must do, which is allow for the verification of their state, except the difference is Celestia is just being this one central place to kind of like all of these proofs to be posted, which helps more and more blockchains, kind of like manifest. That's kind of like my attempt at explaining this. How would you, how would you riff on that? That was great. There's so many things I want to say following that. One is, um, so Celestea is the most minimal blockchain that you can build. Because when you,

when you go down to first principles, all that you need to build these trust minimized applications is some form of ordering, which is consensus. You need to figure out like what are the order of the, the inputs to this, you know, state machine, right? Because every, every application on a blockchain is a state machine, it's a computer. And you're trying to make sure that everyone can verify and arrive at the same state. So if you want to be able to all arrive at the same state, you need to agree on what's the order of the inputs to the state machine. And you need to know, first of all, what are those inputs in the first place? And that's data availability. That's data publishing is maybe a better way to put it. You need to know everyone that's participating needs to be able to see

what what's actually happening right so but then the actual state machine and the execution the verification of those transactions doesn't have to live on on the layer one on on that chain it can be run sort of client side or on a different layer a layer two like a roll-up and so that's that's really the insight so when you think of things that way one way to sort of tie this back to bill whatever is when you're L one when your layer one your base layer is that minimal you're kind of you know, you're basically providing the maximum expressivity for the other, the people building on top of it. Because you've made the most minimum amount. And so we're taking some opinion out of the layer one to allow for all of that choice of what that opinion is to be made by all of the layer

twos on top of Celestia. Exactly. Yeah. And so, and like also to talk about monolithic blockchains, right, like Solana or whatever, it's sort of a one size fits all models. It's like, let us make the choice for you. We know what's best. We have all of the opinions. Yeah, exactly. We, we, We're the experts where we have the best execution. We have the best this and that and just like build on us and we'll take care of it for you. Now I think there's there's validity in that. But I think that the vast majority of the opportunity is in this space of giving expressivity to developers and app builders because they're smart. They know what they want.

There's no one size fits all. It's like everyone has a different style. Everyone has a different size that fits them. Anyway. And then another thing about when you make the block space, minimal. Maybe one analogy that could help people is that it's sort of like a refined sort of commodity. We can also touch on this, like refined oil or something that's like now been processed into something new, like a value-added product versus something that's raw and unrefined,

like a pure, just a pure, like just got it out of the ground resource. And so block space that has an execution layer embedded in it to me, like whether it's on Ethereum base layer or a salonah, and a monolithic chain is a refined sort of value added, like already transformed good. You can't take it back into the raw form that easily. I guess you can, like in Ethereum we can just like post blobs. But that layer is not actually built for that,

whereas Celestia is optimized, just for massive scale of raw block space, unrefined block space. And then you can go and like take however much you want, basically purchase it from the protocol, and refine it to do the thing that you want. It could be jet fuel. You know, maybe you're running like a SVML 2 and you want it to go really fast.

So you refine the block space, the crude oil into jet fuel. Or maybe you're just like, hey, I just want it, you know, everyday EVM chain, turn it into gasoline to put it into your car. I don't know. It's that kind of mentality. Yeah, I totally under, I see that pattern. And I know you read an article that's going to come out this week on bank lists. I call like Celestia in this, there's an axis here on size of blocks and sophistication of blocks. sophistication being like basically, is there a virtual machine in the blockchain or is there not?

And Ethereum and Slessia actually occupy opposing corners here, where the Ethereum layer one is a small blockchain. We have like small constrained data with a virtual machine, whereas Slesia is the opposite, where it is unconstrained, as in the layer one, can support like massive size, massive capacity, blobs. But it doesn't have a virtual machine because that's one of the opinions that it allows, it pushes up to, the higher layers to the layer two's. Interestingly, even though we occupy, like, kind of opposing corners here, we've taken, like, the opposite tradeoffs. There's still a lot of, like, shared values and shared, like, philosophy here, like,

easy to verify clients. Like, even though Slessia is, like, kind of a big, a big blockchain, since all the blocks are, like, simple, because they're all unsophisticated, there's no virtual machine, there's no computation here. It's so trivially easy to verify, which is also one of the goals of Ethereum. Maybe even as Slesia is, like, even more easy to verify than Ethereum. because Ethereum, you have to actually redo computation to verify it. But also at the same time, both are interested in, like, producing this layer two design space.

Maybe, like, correct me if I'm wrong, but I think, like, kind of the main difference between Ethereum and Celestia, especially now that Ethereum has 4-4-4, it has its own blob space, whereas Celestia is, like, only blob space. So the only difference between Ethereum left and Celestia is that, like, Ethereum retains its virtual machine at the layer one. and whereas Celestia just like has no virtual machine. It's like just post your blobs. Is there any other differences that we should parse out or is that kind of just like the main one? I think that I really love that diagram by the way of like, and I like that way of thinking about a sophisticated, unsophisticated and big blocks and small blocks. And I think that basically Celestia really believes in, yeah, big unsophisticated blocks.

I like to say big lazy blocks that are because when you, as you add sophistication, what happens is it becomes more difficult to verify. If you have state and execution, then the transactions that come through, like all of a sudden to run a node and verify the chain, you have to have a bigger machine that holds that state that actually processes those transactions. Whereas the point of Celestia is that because of data availability sampling

and the fact that it has no execution, you can run a light node. You can run on your phone. It requires almost no bandwidth and no compute. and very little storage, and yet you can basically have the assurances of verification of a full node. And when you start to add execution and state,

the more state you have and the more execution you add, the worse and worse that becomes, basically you lose that ability and it becomes heavier and heavier to run a node that has like, you know, fully verifies the chain. So in Ethereum's case, you know, obviously it started out as a monolithic blockchain and it's been extremely successful.

There's been so much application. There's so much state. And that's the value of Ethereum, right? There's so much valuable state and applications and logic on Ethereum. And now Ethereum, and so it's actually pretty, I mean, it's way cheaper than running a Solana full node, but it's actually, you know, relatively expensive to run an Ethereum full node and fully verify the chain. Now, adding the sort of sidecar of data availability through blob space and eventually like, full dang sharding kind of like gives you this sort of like dual system of like you have a sort of monolithic stateful execution environment with this like more modular very like you know

specific big big unsophisticated blocks thing so it's kind of this amalgam which I think has some tradeoffs that and that are actually good and are different than celestialia it's just it's just like so they I think there's similarities like you can think of like Celestia is very similar to like when dangsharting is fully live but Celestia will never have this like full, stateful L1 because we just, we want to be as minimal as possible because we think that, you know, we want to preserve, like as soon as you have that stable L1,

every roll-up that launches on top of you has to pay attention to that and run a full node of that whole execution. And we don't want to, we want to be as light as possible for the roll-ups to build on top of us. Right. And Celestia as a platform for sovereignty is something that definitely like comes to mind here,

which is exactly what you were talking about, right? So because Celestia pushes its virtual machine to the higher level, there's no virtual machine on Celestia. And so all roll-ups must make their own opinion about, like, what kind of virtual machine do they want? Can you talk about that trade-off and, like, what properties that give Celestia-based roll-ups that Ethereum-based roll-ups don't have?

Whereas, like, Ethereum-based roll-ups are also free to choose their virtual machine, but there's something different about the fact that the settlement layer for Ethereum roll-ups all uses the E-Earine-Based. can you talk about the difference in this model? This is such a great question and a great segue segue because so I really think this is one of the philosophical differences potentially between the Ethereum, Ethereum's approach to modularity and Celestias.

Now, first of all, as a disclaimer, like Celessia also believes in settled roll-ups, but we're also very bullish on sovereign roll-ups. And the thing is when you take the Ethereum approach where you have this- Is a settled roll-up and Ethereum roll-up? Is that a... Yeah, it's like a...

smart contract roll. It was a roll-up that like settles to other another chain and like has to like sort of its forked choice rule and sort of like the canonical chain is sort of determined by what like a bridge contract on another chain. It's also a very controversial topic as well. If people remember like a year ago, like there was like months of discussion and debate on this. Anyway, wait. So Celessia rollups don't settle to Celessia because Celessia isn't a settlement layer. Right. And so like, they settle to themselves. They are their own layer one. Whereas what you're saying is settled roll-ups are, there's kind of like a hub of final settlement, which is like the Ethereum layer one or any other smart contraint chain. Yes, well, but you can still run a settled roll-up on Celestia. So there's no reason.

It's just that Celestia does not want to be a settlement layer. And there's no way currently to settle on-settlement. That's not Celestia. Yeah, including another roll-up on Celestia. Right, right. Yes, exactly. We can unpack all that. It gets a little confusing.

Yeah, that was here. I also want to say that Celestia doesn't have any means of settlement right now. But we are going to add a way. And one of the downsides of this is that there's no way to bridge Tia as a token in a trust-minimized way up to roll-ups without some form of settlement. But we have a plan to solve that. We can talk about that later. Anyway, so put like three pins in three different conversations, which I all want to come back to, but keep going. Anyway, okay, so when you are Ethereum, right, Ethereum lens of like roll-ups, you know, starting back in 2020 when they were first getting sort of proposed was this idea of we want to extend the throughput and the functionality and the users and the assets and all these things of the L1 itself.

like Ethereum has this rich ecosystem of users and applications and liquidity and stuff like that. We need to scale that. So the mental model of- The original fight, just to really extend that, both Arbitrum and optimism were fighting over, like, which one is more Ethereum equivalent? Because they are trying to literally blur the lines between the layer one and the layer two by being exactly the same as Ethereum and having this very natural continuation. This was the genesis of like the Ethereum roll-up like landscape here, just to add on to. what you're saying. Exactly. And so when you start with that mental model of what role-ups should be, they're just, they're sort of subordinate like, you know, add-ons to the scale the layer one.

You, you kind of, you have just different assumptions about how they should work and what they should look like. And then you see that everywhere in the Ethereum L2 ecosystem, in my opinion. Most of them are just running the EVM. Most of them, also pretty much all of them settle down to Ethereum. I mean, that's the whole point of building on Ethereum is that there's users and assets and all that stuff. But they make those assumptions in their design that they basically need to be, they need to have this bridge contract and a lot of them have it baked in that that's like the bridge contract is sort of like the source of truth for their rollup. And so that's what you can think of as like this like a non sovereign roll up, like a settled or smart contract roll up. Now, Celestia comes at it from a very different angle, which is more sort of from the cosmos sovereign. chain's interpretation of what roll-ups are. In our minds, roll-ups, there's actually no reason why roll-ups need to settle to another chain at all. They are actually their own blockchains in their own right. They just happen to run, it's like a virtual blockchain where they run on some other chains block space.

So they borrow, they pay to use a block space of another chain. And that's it. But there's no reason that they need to actually post like a proof to another chain to be able to determine the canonical chain for themselves. And so now there's, but there's reasons that they might. Like obviously if you, and this is also, there's a whole spectrum of like, well, once you start bridging to other chains, do you lose sovereignty? I happen to have my own opinion there, which we don't need to get into. But that's sort of like the big difference. And where Celestia is right now is are actually helping a lot of Ethereum L2 chains still like scale by using Celestea DA while still settling to Ethereum, right? And we do that via this data availability bridge called Blobstream. We're rolling that out.

Also, we deployed on base and Arbitrum. And the idea there is that like you can still tap into an external data availability layer while still being able to settle to another chain. There's security tradeoffs there, which is that that bridge, contract now makes an honest majority assumption on the external DA layer. And so it's not as good. If you, if you are ultimately caring about, you know, Ethereum is my settlement, like, root of trust for like the liquidity and everything, then, you know, Ethereum DA is sort of the gold standard because that is more secure from that lens, from the lens of the bridge. But as, you know, our belief is that like, we're still so early in the development of

blockchains that eventually, like, it's going to become, like, roll-ups and, like, the successful roll-ups are going to become so big that they're no longer really necessarily to have to be tied to anything. They can stand on their own legs and, and basically, like, all the liquidity and users and things can be native. And so I think that's sort of like, we're, we're thinking, like, that's the end game of where, where this, the stack goes. And so we want to build for that. And also just, I guess, philosophically, we believe that, like, these applications, applications, these communities that are building and using these roll-ups should have control if they want to of their own chain. Because like when you settle to Ethereum, ultimately,

if something happens and there's a hack or something like that, in order to change anything, you have to like change the bridge, right? Because the bridge is a source of truth. But you can't fork your bridge unless you fork Ethereum. And so you end up kind of like stuck essentially. you're embedded within the Ethereum social consensus and social contract rather than being on your own thing. That was a long rant and there's a lot to talk about, but I'll stop there. I think maybe just one pattern I'd like to elevate the idea when I got into crypto in 2017, and ever since then, honestly, there's always been this idea of like, it's a multi-layer one universe. It's a multi-blockchain universe.

There's going to be so many blockchains. Blockchains everywhere. And then as a result, downstream of that, like, meme, a lot of like, interoperability chains surfaced like chains that are trying to connect other chains. Some are like bridges like in the 2017 world there's like aon network which is like this one chain that would connect to other chains. There's a blockchain that connected blockchains and there's been this whole entire sector of like these these like interoperability solutions that like would solve the interoperability problems of blockchains with like another

blockchain and that like those of all that whole entire sector hasn't really taken off yet. But the same opinion of like, hey, there's going to be a bajillion chains is nonetheless held by both like Ethereum and Celestia. It's just like there's this main one difference of like instead of like adding a third chain to connect two chains. Instead, these two chains are just using the same sort of like shared resource being DA. And that is actually the thing that actually allows for two blockchains to actually talk to each other without having like this intermediate. mediary third chain that does that one this like one global service. Riff on that for a second.

Like, because like this is kind of the evolution of like the many chain world. Absolutely. I'm so glad you brought that up because that's something I wanted to talk about earlier, but then there were so many other things to mention. So that the why does it make sense to share a data availability there? Like why does it make sense for this like base layer of security like Celestia to be to be data availability. And the reason is that data availability, it makes sense, if we're living in a world where

there's tons and tons of different chains, it makes sense for them to share the same DA resource for a few different reasons. One is exactly like you said, data availability, there's actually like an impossibility result, an interoperability for blockchains, which states, if you don't, if you're not able to verify the other chain's data availability, you cannot have a trust minimized bridge with them. and so if you want to have these chains be able to interoperate with a high like degree of fidelity and security and economic bandwidth you need that they need to be sharing a common DA layer right now is that just because like you reduce um you just reduce trust assumptions if we all make the same trust assumption if we all agree to use Celessia as the place to uh to so like on from the Ethereum side of things right like a roll up canized or use Ethereum DA, Ethereum for settlement, which can be expensive,

or it makes an all different choice. It'll make the choice to have an additional security assumption, which is using an external third-party DA provider, which is what Celestia is. But if we all make that same external choice, then that same external trust assumption is better for all of us,

and we're all making the same trade-off. And so that trade-off actually kind of becomes more secure because more people have made it. Is that what you were saying? Sort of. I wouldn't even call it a trade-off. trust assumption, it's sort of like, well, this ties into the idea of light nodes, which I was talking about earlier, right? Which is that, okay, so how does blockchain interoperability

really work under the hood? Well, there's specifically when you're trying to do it in a trust minimized way. What you do is, so you need your blockchain, blockchain A, to verify the state of blockchain B, right? Like, if I'm going to, if you're like, you're, you're saying, I bridged these tokens or I did action, certain action on blockchain B, that I want to trick. trigger to, you know, mint my tokens here or do some action here, right? I need to actually, this blockchain A itself needs to be able to verify that that actually happened. Now, the way that we do this currently, in the most trustmanized way, for example, like let's say IBC, is that these two different chains, they run what's called a light client of each other, which is the same thing that

certain users run, like you can run a light client on Bitcoin or whatever. And what that light client does is it basically verifies the signatures of this other chain, the block producers. And it says, okay, all the block producers signed off on this state. Therefore, I'm okay to trust it and do, you know, mint these coins and whatever. Now, the problem with that is that a light client makes an honest majority assumption on the other, the validator set of the other chain. If this, if this chain decides to go rogue and sign some, you know, arbitrary state, this chain has no way of defending itself. And so that's what I mean.

It assumes that both chains are secure when they might not be, but it assumes that they are. Well, it's, yeah, specifically it assumes that the validators are secure, not going to, like, corrupt, get corrupted. The problem with that is that, like, if a rational validator, if I have a certain amount of stake at, you know, value at stake, if I sign, like, invalid state, I get slashed for that, right? But if the amount of damage I can do to other chains that I'm bridged to is, a higher, like amount of money I can steal is higher, then like, I may as well do that, right? Or like,

it becomes the rational choice to do it. So in this world where interoperability is based on like clients, which even to this day, like most interoperability is not even based on like clients. Like like clients is better than 99% of other interrupt. But even in this world, you have this problem, right? And the way that, okay, one, and tying you back to data availability, I hope I'm not losing the listeners, is that now if we want to do this in a, a trust-minimized way. What we could do is instead have this chain post an actual proof or use proofs rather than just like a multi-sig or like a sign like a signature set. It can post like fraud proofs or ZK proofs of this date to this chain. Now the problem is and

we all know that so that that's a big step in step up in like the security. However, there's still another attack which is a data withholding attack, which is this chain post state over there and then, but it never actually publishes the data behind that state transition. If this chain is not able to verify that all the data is available on this chain, then it can again break the bridge and steal all the money. Right. So now you're stuck in this thing of like, okay, well, in order to have two chains, have totally secure interoperability, which is proof-based, not like validator signature based, honest majority based, fully trust minimized, they need to verify that each other's data is available.

So now all of a sudden you're like, okay, well, it makes sense for us to post our data to a common data availability layer. Now, before data availability sampling came along, that didn't really make any sense because ultimately, if every chain posts this data to the same DA layer, that DA layer just gets bigger and bigger and bigger and now everyone is burdened with having to download more and more data. So every chain now has to do way like more work. It basically increases linearly with the amount of, like the amount of chains or the amount of transactions. With data ability sampling, all of a sudden you make it sublinear so that we can actually share a common DA layer without increasing the load on the other chains. So now you can have this interoperability, fully trust minimized, without an actually scalable system. Okay. And this all kind of, this conversation all kind of spawned with Celestia as a platform for sovereignty.

sovereignty yet yet trustless composability. Is it trustless or it's just like we call it trust minimized and it's like is it an end of one trust assumption? Something that I learned very early on from Mustafa and is that never use the word trustless because there's always...

There's no such thing as trustlessness. There's no such thing as trustless. There's always some assumptions baked into these things. But you want to be as trust minimized and the most trust minimized that we know how to build so far is basically, basically having some kind of execution proofs, whether ZK or fraud proofs, with some form of, with data availability guarantees with like data availability sampling or if you want to,

you can just download all the data. And that's that way you're like fully secure. And you're not making any assumptions. Now, the reason why like tying this back to sovereignty, you're like, why does it make sense to share a common DA layer? First of all, it's an interoperability thing. And then I guess why I kind of already covered it. But before, yeah, before data, sampling, like, it didn't make sense for chains to all, like, couple this. But, but you also get this shared security of, of the consensus as well. Like, if, if, if, if you're also deriving consensus from the underlying DA layer, you don't have to, uh, have your own consensus network and your own proof of stake system. It can all be kind of within, within one proof of stake system. And the good thing

about consensus is that it's extremely scalable because all you're doing is just voting. Like, consensus is actually one thing that is inherently makes an honest majority assumption. There's no way, consensus is a subjective thing. It's not objective like, oh, well. Consensus is honest majority. Yeah, yeah, exactly. Whether it's proof of work, it's like you're assuming that like the majority of miners are not going to like go back in time and start mining a different like, you know, uncle chain and proof of stake, you're assuming they're also not going to sign conflicting blocks essentially. But the beauty of sharing this common DA layer is that you don't have to spend your own chain from scratch.

So all of a sudden, you can have consensus and data availability, which is the root of the security of your chain, out of the box. And you can pool all those resources together rather than duplicating the effort and fragmenting the security. Mantle, formerly known as BitDAO, is the first Dow-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle Network, a brand new high-performance Ethereum Layer 2 built using the OP stack, but uses eigenlayers data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle network's gas fees by 80%, but it also reduces gas

fee volatility, providing a more stable foundation for Mantle's applications. The Mantle treasury is one of the biggest Dow-owned treasuries, which is seeding an ecosystem of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 onboarded, like Game 7 for Web3 Gaming, and ByBit for TVL and liquidity and on-rance. So if you want to build on the Mantle Network, Mantle is offering a grants program that provides milestone-based funding to promising projects that help expand, secure, and decentralize Mantle. If you want to get started working with the first Dow-ledd-Layor-2 ecosystem, check out Mantle at mantle.xy-Z and follow them on Twitter at Zero-X Mantle. Launching a token? Don't let complex legal and tax issues slow you down.

Toku provides specialized support to optimize your launch and ensure that you as a founder and your team and your investors get the most tax-efficient outcomes. The Toku team understands the crypto space inside and out and will ensure your token launch is fully compliant while maximizing tax efficiency. Toku can connect you with the best attorneys if you need them to make sure that you have the best advice and Toku can help to optimize your taxes so you pay the least possible amount of taxes while still maintaining legal compliance. With Toku's guidance, you can concentrate on building your company while Toku handles the logistics. Tokin launches don't have to be complicated. Talk to Toku today to get a free initial token valuation. Taking self-custody of your crypto is one of the

most important things you can do on your bankless journey. It's also one of the hardest things to get right with huge consequences if you don't. If you want help going bankless, talk to CASA. Kaza helps you take custody of your crypto assets so you don't have to wonder whether you're doing it right. Kasa is a one-stop shop for doing self-custody the right way. With CASA vaults, you can hold ether, bitcoin, stable coins, all with one simple app and multiple keys for the ultimate peace of mind with a support team to help you every step of the way. But it doesn't stop at self-custody because even though crypto is forever, you are not. We all plan on making life-changing wealth in crypto, but with CASA's inheritance product, life-changing wealth can elevate to generational wealth.

For your kids and your loved ones, who don't know anything about crypto. With CASA, you won't lose your private keys, and you won't accidentally take them to the grave either. Click the link in the description to get started securing your generational wealth. So one of the big conversations around Celestia is like the notion of DA data availability as a commodity or not. Like some people will look at the market cap of Tia and be like, well, that doesn't make any sense because what are they doing? They're selling a commodity. The price of DA, the cost of D.Rgoan is zero. The economic sustainability of selling DA is just like not a very good business. But I think we've already kind of like opened up how Celestia is just more than just

like a seller of DA, which is the network effects around many rollups, many, many, many rollups, all kind of like leveraging Celestia for DA. And like especially that like sublinear relationship with more roll-ups using Celestia for DA and how scalable it is, right? And so, like, technically infinite amount of room for Celestia to fit many, many roll-ups who can all have this, like, logically concluded, minimized ease of verification of other chains, giving you, like, a maximum level of, like, interoperability with the retention of sovereignty. And all of this happens because of, like, there's a common layer here. So, like, Like maybe DA is a commodity, but like that's not all what Celestia is.

Like Celestia is more than that. This is my intuition of like I think where this conversation goes. Maybe you can pick it up and run with it. Yeah, absolutely. I'm glad you're talking about DA as a commodity because this is one of the takes that I, I hear the most, which I think is like the most short-sighted or just like misguided, basically. Because again, like if you think about it, right, I mean, do you think that, for example,

any EVM block space is the same. Like is block space on Ethereum L1 versus like Tron or like, I don't know, even let's say arbitram, right? All like block space, all block space is like differentiated in some way. They have different features. And just I think people just think like, oh, well, data availability, it just sounds like, oh, I'm just putting my data somewhere and like, you know, it could be anywhere. So like it's trivial to just spin up more data availability.

But the reality is that data availability is just another name for block space. It's just unrefined block space, but it has all the same properties of block space in other contexts. So like if you, unless you think that literally all block space is a commodity, then you should not think that DA is a commodity. And I think there's a lot of other, like one way I've heard kind of this expressed, this idea expressed, but someone, I think someone in the Ethereum community uses an analogy of like, block space as a building material, right? And so this is another way of like explaining this is like not all block space is made the same. Not all DA is made equal in the sense of like there's there's block space or data availability that's that's flimsy. And then there's blocks space and data ability that's very strong and robust. And like what you know, if I'm a builder and I'm building

this whole the whole point of blockchains, right, is to have this shared state in a trust minimized way. And if I'm building my application and I choose certain building materials, like something that's flumsy to say like particle board or something, like the house I'm going to be able to build or the tower or whatever is going to be like just frankly not very sturdy. Right. And maybe that's okay for your your specific thing. But for the majority of like use cases and like the real essence of what makes blockchain is useful, you want something that's very sturdy like steel that you could just like you could build like a tower. power, like, and the social scalability of that is so much greater. So it's like, it's kind of like this, this building material analogy is one way to think about it. And Celestius's goal is to be the most sturdy, trust minimized and yet scalable DA. So it's like, so it's cost effective. Like you also might

think like, well, okay, if it's, well, if it's made out of steel, you know, it's going to be more expensive than if I bought just like plywood or like particle board or something. And it's like, yes, absolutely it will be. Like, if you want to just use DA on AWS, S3 or something like that, go for it. And that's going to be cheaper, obviously, but you're going to pay for it in other ways. Post your DA's tweets on Twitter. It's great. Yeah, exactly. Yeah, exactly. But you're going to pay for it in other ways. And so like, but the goal of Slessia is like maybe, maybe, okay, this is maybe a good thing. Like, okay, maybe Ethereum lockspace right now, right, is like steel. It is like the most, it is like insanely secure, like, like, so many people running nodes, like all these, you know, different features.

Celestia is perhaps not as sturdy yet for now, but it's cheaper. So maybe you think of it like carbon fiber. I don't know if carbon fiber is like actually cheaper than... Definitely not cheaper, but... Okay, no mind. That's a bad analogy. Imagine something that's like not quite as strong, but cheaper to build on and still extremely sturdy. Build houses out of the word.

Yeah, yeah, I'll think more about what the specific analogy could be, but that's the way to think about it. It's not a commodity. Now within each block, like within Celestia, like block space is kind of created equal. So you could think of it as a commodity within like all Celestia specific blocks space, all Ethereum specific block space is a commodity. But then you even have Ethereum breaking out its block space into like execution block space and DA block space, right?

And also you can think of it like, well, top of block is actually more valuable sort of like part of the Ethereum block space because there's MEPV to be extracted at the top of the block. So anyway, that's just sort of me, my rant of like, D.A. is not a commodity. And like, I don't know, we can we can talk more about specifically the network effects around block space and D.A. generally, which I believe are there. There's another sort of like element of this conversation. Yeah, I see two pillars of this conversation. The one that you were just talking about right now and then the second one, which you just identified, which is just like, what are the extra features that come alongside of a shelling point? where everyone's using the same DA layer and like how can like a platform like Celessie or any other

DA platform like how can they maximize network effects, which is which is one part of this like DA as a commodity conversation, which I want to definitely want to get to, but I still want to hang on the first one for a second. Because I don't think what your opinion was actually directly attacks at the heart of like the whole DA is a commodity meme. Like block space is also a commodity like to your point. It's definitely a commodity. But like block space. is less commoditized, whereas Think DA is very commoditized, as in like you can, like, Ethereum produces block space, the Ethereum layer one produces block space at a very specific rate, and so it's producing this commodity. But in this very constrained fashion, which is actually

where Ethereum block space gets its value from, the fact that it's so constrained in its supply in production, whereas Celestia, as like the big block, big unsophisticated block, blockchain, actually can, like, expand the supply of DA very readily to host infinity chains. And so, like, because there's no fundamental constraint on literally the supply of DA, we can totally compare, contrast Celestia DA with all the other DA providers. And we can say, like, well, like, Celestia's just like the best. It's like the best product. It's the best quality out of all the DA,

but it still doesn't, like, address the point that, like, Selesia can also massively expand the supply of data availability when needed to sell it to all the roll-ups that are purchasing it. And so I think that's where kind of the meme of, like, DA is a commodity comes from. Yeah, here's maybe a better to, on your, to reply to your point, maybe a better analogy is, like, that maybe Ethereum block space is like diamonds.

or some kind of rare mineral where it's like the supply is so limited and you have to do a lot of work to like get it out of the ground. It's insanely secure like, you know, diamonds are like the hardest thing in the world, right? Like you're not going to break it. But like, you know, it's just difficult and the supply is fundamentally constrained, right?

And what Celestia is more like, is actually more like steel where the ingredients to make it are very cheap and accessible. And so it's very scalable, right? But it's still a great building material. Maybe it's not as strong as diamond, but you can still build in, you know, really, really good things out of it. And ultimately, like, what Celestia wants to, like, okay, if we were never going to, if we want to reach web, web scale for, for Web3 and blockchains, we can't do it, you know, building out of diamonds. We're going to, we need to have steel or something like that to build all these different things.

And so that's why we fundamentally believe that, like, we, like, constrained supply of block space is a block. locker to actual adoption, right? And there's, and now you're thinking like, okay, well, if it's totally unconstrained, then there's no, like, how do you price it? The price is like a, like a race to zero. And that's also not the case. Like, the price just needs to be higher than the cost to produce, to produce it, right? If I'm a steel manufacturer, it's like, would I rather, like, I could sell like a thousand, I don't even know what you call those, like, you know, bars of steel. yeah yeah exactly beams of steel at like a you know

a thousand dollars a piece or I could sell like a million of them at like a hundred bucks a piece or something like that really you want to it's better to have a low price point but sell a lot like that's how that's how we're gonna actually make these systems work in the real world and that's what Celestea wants to do rather than trying to constrain supply

and drive the price up it's like have the price be low and accessible to anyone and just, you know, sell a lot of it, basically. It's like economy of scale is sort of like the underlying goal. Yeah. All metaphors like sadly break down.

And so this is where kind of like these like economic resources are like metaphors are kind of like imprecise. But I think like really the measure is like both Ethereum and block space and Celestia blob space are both like renewable resources.

But Ethereum constrains its supply and Celestia maximizes the supply. And so like Celestia regrows its block space very, very quickly because like that's kind of the nature of blob spaces. You can actually prune it. And so like its ability to regrow more blob space happens at a very high rate. And it's also interested in growing it, growing like renewing its resource over and over and over again faster and faster where Ethereum is like, yo, like really, really put a damper on how much new commodity that we are producing because that's just what the nature of block space. is. Yes, exactly. Yeah. And just a quick thing on like the pruning part, right, which is that

data availability is different to data storage. So like people get mixed up. They're like, oh, man, well, Celestea doesn't store its data beyond, you know, 21 days. I think that's what the pruning threshold is. But the reason for that is that data availability is about publishing and not about storing. And those are two different things. It's sort of like, you know, like a newspaper, publishes data and distributes it around the world, but you don't expect them to have the copy of, you know, the newspaper from three weeks ago, like, you know, when you go back and check it because it's like, well, they already did their thing. If you need it, there's copies of that newspaper everywhere. Just go or go to a library and pull it out because the libraries are storing it. And library is more like a storage. Anyway, that's a small aside. Yeah, right. It's not the newspaper's job to retain the knowledge. Like, humanity does that in other places. And, So like their knowledge remains, but the newspapers decay. Exactly. Yes.

Okay. Let's get into the other pillar of this conversation, which is like the specific network effects around Celestia DA or any sort of DA layer that generates network effects. Because this is the, and I think we've kind of talked about it, so we're actually kind of rehashing part of this conversation. But just like is one thing to talk about, say, DA is a commodity or not or it's actually a precious material, but really the separating factor between like one DA platform's quality of their DA and others is largely it's like shelling point as like a settlement network for DA.

And so like we've already talked about like when we, if we're all, if Rolips are all using the same DA layer, call it Celestia, there are like tailwinds. Maybe we can just kind of run through that conversation a little bit more formally one more time about like the nature, how the quality of DA changes when everyone uses the same DA platform. Yeah. So the one of the main ones, which we already covered well, just recover. quickly is that if ever like the more more roll-ups the more chains are using a specific data availability layer you get this shared security property basically which is you can have first of all you share the same like root sort of consensus and ordering between the blocks and you don't

and you have this like shared sort of proof of stake network at the at the base right but then more importantly, potentially, is the fact that you share this common data availability route. And there's actually, in Celestia, there's this, it's what's called the data route. And if everyone's verifying the same data route, then they get this privileged access to each other's state. And they can have these trust minimized bridges that allow them to have, you can really have this high fidelity, high economic bandwidth interoperability between these chains, which I think is going to be vital to achieving the actual, like, value proposition of what blockchain is

are supposed to be, right? And because as soon as you sort of like bake, if you want to now, all of a sudden, you're on this DA layer, you want to talk to this other chain on a different DA layer or its own sovereign chain, whatever it is, you end up, now you're having to cross this boundary of trust that has all these limitations and security implications that right now we might not really care about because there's such like, where we are as a space is so like peanuts compared to where we want to be. Like fast forward 20 years, right? Like it's the same as the internet. Like people just thought like, oh, whatever, it's email, blah, blah, blah. Literally, now everything runs on the internet. That's where I believe Web3 is going. And except instead of just

data and information, it's going to be like the value. It's like everyone's livelihoods. You know, the equivalent of whatever next, like the next iteration of central banks are and like the whole global financial system is going to be on these things. It's not going to be a joke. It's going to be like, well, I actually want to stay within my zone of like if I go outside of this trust minimized zone, I'm actually taking a risk and there's going to be a limit. Like obviously people will take that risk. I'm not saying that we're going to be in these isolated islands. There will be bridging between these, but it's going to be constrained by those trust assumptions baked into them and that are just inherent to the nature of blockchain as far as we know with this impossibility result. So like there's going to be this privileged, there's going to be like a, I would say, like a natural sort of like pooling slash aggregation consolidation around specific DA layers for the for the chains that really need trust minimized interoperability with each other.

other. That's one. Okay, beautiful. I want to get into the conversation of Tia, the token's role in the Celestia ecosystem. So of course, Tia gets the economic security, gives the economic security to the Celessia ecosystem, basic proof of stake principles. I don't really think we need to define proof of stake here. But, like, what is Tia's relationship with the roll-ups that build on top of Celestia? Like, how does, how do these relationships like emerge? and progress. Yeah.

So Tia is basically, first of all, the proof of stake token at the root of the network. It's also the token that people use to pay for block space. So whenever, if you want to, you know, if you're running a chain on Celestia, you're going to need to pay Tia to the underlying layer to purchase the block space. And the fee basically is proportional to the amount of data that you want to consume. So it's actually more similar, but the fee market is more similar to Bitcoin, which is like a byte-based, like, fee model versus Ethereum, which is like gas-based. So that's another interesting difference there because there's no execution. There's no gas. And it's linear. Is it

linear to bytes? So bytes go up by one gas or price goes up by one? Or is there a... Basically, yeah, there's like a base fee. And then there's like, it scales up as you consume more more data beyond that. But I think Tia ultimately there's like nothing other there's nothing stopping it from being used as a gas token for execution layers built on top of it, which actually could be very useful. Similar to what roll-ups used for ETH, you may not want to issue your own token to do gas. If those roll-up operators and folks using it are already posting data to Selesia can kind of make sense to just have that also be TIA because it kind of aligns the cost of execution with like the same sort of unit of account essentially between the DA and the execution. So there's a lot of reasons why that

could make sense. It can also be... And just to put a pin in this, this is something that I've learned from David Graber's book, Debt First 5,000 years as, and also like one of the ways that we understand money emerges in the first place is that like some governments have some control over some piece of land. And then they say, hey, citizens, we are going to protect you and you are going to pay taxes. Oh, also you're going to pay taxes in this unit of account, which is our currency that we issue. Uh, and so go do commerce with each other, generate revenue. We charge you in, in taxes in this unit of account. And because, uh, you have to pay taxes in this unit of account, that unit of account becomes the money of that, like, particular domain. It's like,

just a very, like, uh, uh, understood way in which money emerges in a particular landscape is that people just use the money that they are required to pay taxes in. And in taxes in this, this particular, like, Web3 Context is just like what it costs to pay for the resources that are required to make your blockchain work. Exactly. You know, that book is something that I remember I bought it at one point and I was like, I'm going to read this book. And I just could not get through it.

It's such a good book, man. I know. I know. Everyone says, I got a, I, it's on my list. Anyway, that's a great way to think about it, I think. And then similar to Ethereum, Tia can be used as, like in Defi, it can be used to price NFTs. And also in the future, potentially people could build sort of restaking type functionality to,

to, to, sorry, to Celestia. So I think there's a lot of actual parallels, frankly, between like Tia as a token and eth as a token. It's just like very, they're like, they have very similar like uses or potential uses. Like Ethereum is obviously way further along in terms of like, distribution and you know there's actually actually people like pricing NFTs and doing all these things like in in T's case is still very hypothetical but there are people that I'm aware of that are that are building

these kind of things and so we'll see how it plays out and and I think that's that's one I don't know if we were already off the topic of network effects but there's a couple other ones that I think are kind of interesting to go into if that's that's something that we have time for one the other interesting network effect around data availability specifically, and this is light nodes. And so something that we didn't talk about is that in order to have this ability for the block space to scale, but in a trust minimized way where it's still verifiable, you need to have a certain minimum number of light nodes that are sampling the data. If you don't have that minimum number

of light nodes, the assumptions that allow you to call that block space trust minimized collapse, basically. And so the interesting thing is that when these networks get really, really big in the future, if you want to compete and have that much throughput, that much block space that you produce, but still have this very sturdy trust minimization like steel property, you are going to need to have a ton of light nodes out there in the world. And bootstrapping that, getting light nodes distributed, getting users and different people, entities all around the world to run these light nodes is a fundamental thing that you can't just like snap your fingers and be like, okay, all of a sudden I have, you know, 10 million light nodes all over the world sampling my chain.

So I think that's another really important part of this that like you can't just replicate, you can't just fork, you know, Celeste or some other DA layer, just like you can't. can't fork Ethereum. It's like, yeah, okay, forks Celestia and run in your basement, but no one cares. And it's not trust minimized because you don't have all these things that are fundamental to making that possible. And then I think the last one is just, you know, integrations. And this is not necessarily like at the protocol layer, but just if you think about it, you know, the modular stack, as much as we want things to be like plugable, the reality is I think we're still pretty far from that. And right now to integrate different kinds of

layers and different tools, like the amount of tools and tooling and integrations you have with execution layers and shared sequencers and all those things is actually a very fundamental sort of network effect of like if I'm building a new modular component, where am I going to choose to build it on first? Or what is my priority going to be when I'm launching it? It's like, okay, well, I'm going to go to the DA layers that they have the most, you know, users and other integrations as well. And so like Ethereum, everyone's like, everyone immediately built, if you're building a modular thing and it doesn't like, like touch Ethereum, then you're, it's like, what are you doing? Right? Yeah. And I think. Yeah, exactly. And so it's like, well, who's, who's really

going to, like, that's your main user base. So that, like, without an Ethereum integration, it's kind of like, well, you know, no one, no one's, no one's really going to care. And I think that there's a similar sort of path here where there's like ultimately going to be a limited number of DA network. that these builders are going to want to support and continuously like battle test and and can like upgrade and like maintain these integrations with. And so I think there's there's kind of a consolidation also at that layer. Okay. So I accidentally truncated this conversation and you brought, you brought us back to it to which is just like the network effects around the celestial ecosystem. But I also think that also

bleeds back into the money conversation because like what is money? It's just like network. It's just network effects. It's just network effects. And so, like, some of these network effects, like many, many, many more light clients, I think are, like, loosely affiliated with the moniness of Tia, but affiliated nonetheless, which is just like there's some sort of like security and money are go hand in hand. Like, you don't have money without security. And so many, many, many, many, many, light clients produces security for many, many, more chains,

which kind of just like fosters some sort of like emergent breeding ground for, like, Tia as money. Like no one can ever force money to become a thing. It's like kind of this bottom up adopted thing as a result of just like the correct context. And I think what you're saying is just like when many roll-ups use the same settlement DA layer, when many light clients are securing all of these roll-ups, all of a sudden like we are fostering a lot of the ingredients that one would require in order to like allow for money to emerge. And I think you're continuing, the continuation of is like, well, naturally, Tia is the most logical thing to, like, leverage as money inside of the modular role of ecosystem. Is that kind of the thought process? Yeah, that is, that is a good way

to summarize it. And one thing that didn't mention is that there is actually a blocker to that future currently in the way that Slessia is designed. Because without execution or without, like, settlement, I guess, there is actually no way currently to bridge Tia and a trust minimum way to the roll-ups on top of it currently. And so now Tia is getting bridged there, but it's using IBC or Hyperlane or like, you know, these non-trust-minimized options, right? And like that kind of sucks because if you think about like Ethereum,

one of the great things for like the ETHL-2s is that they have, they have a canonical bridge that is like, in theory, as secure as Ethereum itself. So when you're bridging Ethereum up into those roll-ups, it's like it's like the purest, like that, that ETH is not compromised. It's like, it's like almost as close to native Eth as you can get, basically.

Unmediated Eth. Yeah. Exactly. Unmeat. There, that's a very good way to put it. Love that. And so Celestia right now does not have that ability.

And that was, we chose that because we thought at the time we were like, we would rat, like there was the only solution we could think of was basically to add execution to Celestia in order to do that. So you could have a smart contract that verifies the roll up. But that would add state. and all these problems.

So like, we were like, how can we do this? How can we add this functionality of being able to have a trust-minimized bridge to roll-ups without adding complexity on state and all the, like, adding baggage and weight to the L-1? And we came up, Mustafa wrote this forum post on the Celestia Research Forum. I don't know, maybe over a year ago,

which is basically like, describe this idea of having a snark account or a ZK account at the Celestia base layer. and essentially what it is is, you know, normally, you know, it's a basically a stateless way of having a bridge to other roll-ups and like an execution minimized way of doing it, where normally an account on a chain, right, it has an address and a private key. And if you sign a message, if you have a signature, right, a valid signature of a certain like transaction, if it matches that address, then the chain will execute that transaction, right? It will consider it valid. Now, what you can do, and this is a vast oversimplification, by the way, but it's just trying to get the message across.

A ZK account is essentially, instead of like the public key, essentially, you have a ZK program, like a commitment to a ZK program. And if you provided a valid proof rather than a valid signature, that some execution happened on this ZK program, then it will carry out that transaction, which could be like moving Tia to another address. So all of a sudden, with this thing, you can have an arbitrary sort of like,

it's kind of like a, I wouldn't say enshrine ZK rollup, but it's sort of like you can have a ZK rollup that can settle to Celestia, and that roll up can be like just used as a bridge, essentially, to get Tia up into that thing. but you can also interestingly, likely build more interesting things, like potentially restaking and stuff like that. And so this is something that we're still designing and speccing out.

People are interested. We have a working group. We have a very active CIP process. So Celeste Improvement Proposals process where there's a lot of really, like, gigabrain people much smarter than me, who are like designing these kind of systems. And I'm excited about that because I think that is the key to unlock this ability. and in a way that stays aligned with Celestia's values of like,

we try to be minimal as possible and not burden the rest of the roll-ups with like all the state and execution. So is this feature, is this inside of blob space or is this kind of like making a new lane just to kind of enable this one particular feature? So Celestia is execution minimized, but it still has execution. We actually thought originally one of the designs was like,

okay, actually we'll just have all the execution. can be just a roll-up on top of Slici, but it turns out you do need minimal amount of state for like proof of stake and doing all that. Kind of like a Heron's beacon chain, right? Yeah, exactly.

So there is, exactly. That's a very good analogy. So there is execution, Slicia, but it's as minimal as possible. So basically all it is like staking related things and transferring tokens. And you, and that's it. So this just adds one other feature

to that very minimal state machine, which is like, hey, we can have these ZK accounts where you can verify ZK program on the Slesia base layer. And that can add all this rich functionality on top of it. Okay, so this is kind of like Ethereum started out with a very, from the celestial perspective,

like a heavyweight execution layer. And it's always been that way. And that's what Ethereum does. The theorem layer one does execution. Recently, in Ethereum land, we added 4844, which is like a pretty lightweight data availability sidecar, whereas Celestia is like the heavyweight DA provider, like DA champion of the world. And now is adding a very lightweight execution module inside, like,

I don't think you like the word enthrine, but like kind of like built into the Celestia layer one itself in order to like kind of like converge back to like the Ethereum model, which has execution on the layer one and now is adding DA, whereas Celestia is DA, now is adding a a light little like execution module. I see like a ton of convergence here. I would agree. However, it's really important, right, that people get the message that Celestia is not trying to be a settlement layer.

And to the difference, right, between having this ability to bridge and verify something on Celestia base layer and being a settlement layer is like, there's no way to issue tokens on Celestia. There's not even a way to bridge tokens down. There's no way to represent other tokens on Celestia. So Celestia is not a lot of, liquidity like a lot of settlement layers are like okay we'll verify your proofs and we'll have this

pool of liquidity and users and whatever and you know that's that's one of the value propositions and celestialia is not trying to do that so let's see a very very distinctly does not want to ever be a settlement layer we just want to be purely d a it's just we're adding this because we think it will be useful for the bridging part and potentially some other interesting things but not not for settlement so i think that's that is sort of the difference but you're right that there is a little bit of convergence. But Celestia, again, it's like, what's the minimal amount of things that we can do to provide the maximum amount of expressivity and functionality?

And adding ZK things is one of those things that makes sense for us on the tradeoff. Interestingly, Bitcoin, a lot of people want to do the same thing to Bitcoin. And it's because, you know, that diagram of sophisticated, unsophisticated, like both Bitcoin and Celestia have very unsophisticated block space. And in Bitcoin, people want to build these L2s, but there's no way to, they have the same problem. There's no way to bridge the Bitcoin up. So they want to add a ZK op code. Obviously, this is going to take a lot longer to ship on Bitcoin then on Celestia. But I think it's just a last point on the settlement thing. One of the reasons why Celestia doesn't want to do settlement

is because we have this vision of scaling any ecosystem and being fully like, you know, the Switzerland of DA essentially and be very agnostic to any ecosystem. So like obviously most of the chains using Celestia right now are Ethereum L2s. But in the future, as there's more Bitcoin L2s, we're going to provide D-A to Bitcoin L2s. When there's, you know, there's a lot of cosmos chains that are now thinking about using Celestia. Some of them are already using something called roll chains. So like every ecosystem, and now base and arbitram, right, they're going to have their

own L3 ecosystems that can use Celestia. So we're trying to be this like underlying, very thin, minimal layer that it encompasses as much and can service as much of the ecosystem as possible. And that's really, and as soon as you start to, do settlement and try to like, I feel like it compromises your, your ability to be that credibly neutral, just like maximally minimal settlement layer,

or sorry, DA layer. So that's, that's like the difference. And like, yeah, I think there's a lot of other DA. Like, for example, eigenDA is very Ethereum centric, right? So like would a Cosmos chain or Bitcoin chain use it for DA is unclear. So like, or like Ethereum DA is all opinionated with, you know, this very heavy settlement like executionally or attached to it.

So like would a Bitcoin roll up use Ethereum for DA? Probably not because of all those things. So like that's that's one of the core value props of like the reason why not to go to settlement because so many people have been like, well, you guys should do settlement or whatever. We're like no. That's like very short-sighted in our opinion.

Just to be clear, this whole like ZK thing that you're the Slesia is like trying to figure out how to add to its chain. It is settlement, not on the Celestia layer one, but it is like cross-celescalescia roll-up settlement. It's like a settlement module that is a service to other roll-ups where that settlement doesn't happen on the layer one, but it does facilitate settlement as a module. Is that correct? Yeah, facilitate settlement specifically for Celestia, the Tia token. It's possible.

It's specifically a module for the Tia token. Well, it's a, it helps you can control an account on Celestia with that, that can transfer Tia or do different things with, with Tia. But it's not a settlement again, like you can't take tokens from that roll up and then bridge them down to Celestia and then bridge them to another roll up, if that makes sense. And I think another part of this. It's specifically, the opinion here is it's elevating Tia the token as a first class citizen. It already is a first class citizen, but it's really elevating Tia, the token as a first class citizen,

of its roll-up landscape. Yes, exactly. Okay. Yeah. Which is where we get to the whole meme of Tia's modular money, right? Yes, that's part of it. Exactly.

Yeah. Okay. Okay, so, like, one thing that I'm, like, optimistic that Celessia brings to, like, its own ecosystem, the cosmos ecosystem, I kind of like categorize Celestia inside the cosmos, the cosmos ecosystem,

and the cosmos idea, right? What is, what is cosmos? It's this idea of, like, producing, like, super sovereign chains. That's a great, like, notion about cosmos, but, like, I've always thought it's, like, it's going to be unconstrained, pretty constrained as an idea, because, like, Cosmos is, like, too goddamn, like, it's too much of an anarchy to, like, really coordinate and scale. Because, like, all these chains are so maximally focused on sovereignty that they can't, collectivize. They can't coordinate. They can't band together because they're also goddamn

focus on sovereignty. And so Celestia seems to be like the minimum amount, the absolutely lightest amount of compromises on sovereignty, which do exist, although they're extremely minimal, to allow for some sort of like shared coordination layer for this like Cosmos idea, cosmos meme to proliferate. Whereas like, hey, guys, use the same layer for D. maybe perhaps consider using Tia as money. But like Tia is this one platform inside of the cosmos ecosystem that I actually see becoming like a shared resource by all these independent cosmos chains

that actually produces some sort of like coordination in these chains, which I have always considered the cosmos world to have lacked. Great way to put it. I would say Celestia shares a lot of philosophical, roots with Cosmos. It also, frankly, is built, the, the base chain is built with tendermint or now Comet BFT and the Cosmos SDK. So there's like this deep root in Cosmos, but I think Celestia's vision and value prop is like

quite different. So I don't, I don't, like, Celestia is, is definitely part of the Cosmos community, but I think it's, it's something sort of to its own in a sense. And I actually, I think of Celestia as sort of the perfect middle ground or marriage of Ethereum and Cosmos. That's sort of the way that I think about it. I see that too. Because like it's exactly what you said, which is like, we, we do believe in the idea

of like app chains and sovereign chains. I think Ethereum is now like also moving more towards the direction of app chains. App chains and sovereign chains. But we also believe in like shared security and coordination, some of the things that Ethereum provides to its things, which the cosmos ecosystem as it currently is, does not have. And so, like, Celestius' role is, like you said, to be like this minimal coordination layer and sort of like shared security layer for whatever kind of role if you want to build, whether that's sovereign or settled. And ultimately, you know, we're just, we're unopinionated.

Like, yes, I frankly believe that in the long term, just technically, more and more chains will be sovereign because I think, I believe that like settlement and settlement layers will become less and less important as chains get more and more abstracted. And actually my, my view is that in long term, execution becomes commoditized because if you, like, I'm running my application on your, on your roll-up or on your shared, you know, shared layer, all of a sudden, when roll-ups are a thing and bridging becomes like trivially easy, it's, just like, oh, well, as soon as I want to, whenever I want to, I'm going to just spin up my own execution layer and migrate there. And there's very little cost or downside to doing that.

And so all of a sudden, it's like, it doesn't matter, but Barry from Skip, which is a cosmos-oriented interop like chain abstraction project said, said this the other day, which I thought was like just really expresses as well. It's like in the long term, it's going to matter less where you build as compared to what you build. Right. And we're in this world where, the first thing you ask someone when they're like, say, like, I'm building an app. It's like, oh, well, where are you building it? Are you building on Solana? Are you building on Ethereum? Are you building it? Blah, blah, blah. And maybe that will make venture judgments based on your answer to that. Exactly. And I think maybe there will still be a component of that of like, which DA, like, trust zone are you building on? Right? Because that there is actually a reality of like in the future. That is a hard boundary that is just set by the technology that will still matter. But in terms of like, are you building on like X EV. chain within this trust zone or Y chain over here won't matter. It's like wherever you're building, it's all part of it like you could, you could just like, it matters more what you build. It's like, well, what are you building? Because you will have access to all that liquidity in

users. And that, the flow of that will be so much more seamless and liquid, essentially, in the long term future. And that's why sovereignty, like settling and being rooted in some other chain is going to be less important because like roll-ups will be able to stand on their own two feet basically and be sovereign. Nick, this is really great. I really love this construction, mainly because I think it's extremely parallel to Ethereum with just like very small divergences. I really think the difference between like the Ethereum landscape and like what Celestia is

building towards is really defined by like this very marginal difference of like how sovereign are your roll-ups. Whereas like Ethereum's role. roll-ups are very sovereign, right? Like, you can pick your virtual machine. You can pick your block space. You can build a nap chain. You can, like, make something brand new.

Like, you have a lot of freedom in the Ethereum roll-up-centric roadmap here. But, like, it just makes one more opinion about, like, well, you use the Ethereum virtual machine on the layer one for settlement, which is an opinion that Celestia does not have. And making Celessia roll-ups, like, more, I will call it, like, marginally more sovereign. because like Ethereum's role as like I said are already very sovereign, but Slessia is like, well, no, no, no, a little bit more. Like literally up to the theoretical maximum of sovereignty while still preserving like this base layer of shared resource, shared interoperability, which is like this Celestial platform. So like I actually think there's a really in the end game for both ecosystems. There's actually like a pretty marginal difference as to like what each one is building for.

And it really comes down to like how sovereign are each other's respective rollups. Do you agree with that? Yeah, I think that that has an element of truth to it. And I think that, you know, obviously if you were Ethereum, right, and you had all this rich state and all this stuff, that approach makes total sense. And I think the difference is that Slessia is starting from scratch. And so we have the ability to basically, well, first of all, actually, we had this disadvantage or rather not the privilege.

We're not in the privileged place of Ethereum, which has all that state and use. and things like that. But it's also a superpower in that like if you start over from scratch, it's like, well, and you were really building for the long term, long, long, long, long term end game, right? What would, how would you design a blockchain? And like Zucky, apparently I heard him say that when he, when he read the lazy ledger white paper and heard about the project, Celeste, which that used to be what Celeste was called.

He was like, oh, you guys are building the last blockchain. That was that was sort of the phrasing he used. And that was also my, my feeling when I read the paper and, you know, you know, in 2020 was like, holy crap, this is like so forward thinking. And like, I feel like if you play out the various ways that blockchains, you know, evolve, this optimizes for the end state the most of any design that I've seen. And now, to be clear, it could, that could be wrong. We could be wrong about a lot of different assumptions we make. In fact, we're guaranteed to be wrong about some things.

And ultimately, there's going to be always different tradeoffs. And this also comes back to build whatever, is that Ethereum makes different tradeoffs. And that's a good thing, because what we want is more optionality for builders. So, like, building on Ethereum right now is actually very appealing and great. And it will probably continue to be, despite this tradeoff of like, well,

Celestia is like very minimal with no settlement and Ethereum. It does have settlement. It has state. It has execution. it's not necessary like the point of build whatever is there's no optimal point it's all like a tradeoff curve right and celestial is optimizing for a certain thing ethereum optimizes for a different thing and again also to tie back that that's why it's not they're not commodities because they're they're just going to be very different it's like Ethereum block space is going to be different than celestial block space because they make different choices they're optimized for different things and yeah and and like that's great so yeah, I think that like Celestia just has a different philosophy and that results in different design.

Well, Nick, this has been fantastic. This is exactly the episode that I wanted to record. So thank you for coming on and sharing the perspective on Celestia. And I wish you the best, my man. This is really cool. Thank you, David. Yeah, I mean, I'm just all fired up now. This is awesome.

You ask the best questions and you have great analogies. I kept finding myself being like, oh, damn, that's a really good way to explain it. Thanks for having me. Hey, that's what we do here on bankless. We are people who do analogies. It's kind of like our one thing. Awesome, my man. Bankless Nation, you guys know the deal.

Crypto is risky. You can lose what you put in. But we're headed west. This is the frontier. It's not for everyone, but we are glad you're with us on the bankless journey. Thanks a lot.