Celestia: Ethereum’s Biggest Competitor in Data Availability? Can EigenLayer Turn the Tide?

YBB

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YBB Capital

12 min readJan 19, 2024

Author: YBB Capital Researcher Ac-Core

Foreword

According to Ethereum Foundation’s definition, Ether’s Layer2 = Rollup. according to Vitalik’s recent new view, if other EVM chains use non-Ether as DA (Data Availability), then it’s Ether Validium (move the blockchain’s Data Availability layer off-chain). Although there is still a certain degree of controversy over the precise definition of Layer2 because of the DA issue, the upgrade route of Ether is still Rollup-centred, and the DA plays an important role in saving or uploading Rollup transaction data in the upgrade of Ether. ZK Rollup’s ability to access relevant data through the DA affects their own security to some extent, even if they have different levels of dependency. In the face of Cosmos’ shared security innovations and Celestia’s DA penetration, as well as market maker-driven marketplaces, can EigenLayer, whose borrowings are located in native ethereum, regain market sovereignty by elevating its middleware to an ethereum-level security narrative?

EigenLayer

Simply understood, EigenLayer is an Ether-based Re-staking protocol that provides Ether-level security for the entire future Ether-based crypto economy. It allows users to re-stake native ETH, LSDETH and LP Token through the EigenLayer smart contract and receive verification rewards, allowing third-party projects to enjoy the security of the ETH mainnet while gaining more rewards, thus achieving a win-win situation.

Ether is able to attract a large amount of transaction volume and liquidity because it is currently recognised by most people as the most secure first-layer blockchain other than Bitcoin, and EigenLayer directly connects to the security and liquidity of Ether through the Actively Validated Services (AVS), which essentially delegates the security validation of its token model directly to Ether. The essence is to entrust the security verification of its tokens directly to the Ethernet nodes (which can be simply understood as node operators), a process known as “Re-staking”. In this article, we only cite the first AVS project developed by the EigenLayer team: EigenDA.

EigenDA: Rollup Data Availability

According to the official explanation and introduction (no actual relevant data to support it for the time being), EigenDA is a decentralised Data Availability (DA) service built on Ether using EigenLayer Restaking, and will be the first Active Verification Service (AVS) on EigenLayer. Restakers can delegate pledges to node operators that perform EigenDA, perform validation tasks, and in return receive service fees, and Rollups can publish data to EigenDA to reduce transaction fee costs, achieve higher transaction throughput, and improve the security of the entire EigenLayer ecosystem. The security and transaction throughput of this development process will scale with the volume of pledges, related ecological protocols, and the overall growth of the operator.

EigenDA aims to provide Rollups with an innovative DA solution that allows Ethernet pledgers and verifiers to connect with each other to improve security and reduce costs while increasing throughput, with the EigenLayer shared security system adopting a multi-node approach to ensure decentralisation. According to EigenDA, the Layer2 solutions it has integrated include Celo, which transitions from L1 to Ethernet L2; Mantle and its companion products outside the BitDAO ecosystem; Fluent, which provides a zkWASM execution layer; Offshore, which provides a Move execution layer; and OP Stack in Optimism. currently in use on the EigenDA test network).

EigenDA is a secure, high-throughput and decentralised Data Availability (DA) service built on Ether, based on EigenLayer Restaking. The following are some of the key features and benefits that EigenDA is designed to achieve:

Features:

Shared Security: EigenDA leverages EigenLayer’s shared security model to enable Restakers to participate in the verification process by contributing ETH, improving the overall security of the network;
Data Availability: EigenDA’s main goal is to ensure data availability on the Layer 2 network. It uses verifiers to validate and guarantee the validity of data on the Rollup network, preventing undesirable behaviour and ensuring that the network functions properly;
Decentralised Ordering: EigenDA leverages EigenLayer’s decentralised ordering mechanism to ensure that transactions in the Rollup network are executed in the correct order, thus maintaining correctness and consistency throughout the system;
Flexibility: EigenDA is designed to allow L2 developers to adjust various parameters, including the trade-off between security and activity, the mode of pledged tokens, and the corrective coding ratio, as needed to suit different scenarios and requirements.

Advantage:

Economic Benefit: EigenDA reduces potential pledge costs by enabling shared security of ETH through EigenLayer. It provides a more cost-effective validation service by decentralising data validation work and reducing the operating costs of each operator;
High throughput: EigenDA is designed to be horizontally scalable, increasing its throughput as more operators join the network. In private testing, EigenDA demonstrated throughput of up to 10 MBps, with a roadmap to scale to 1 GBps, opening up the possibility of supporting bandwidth-hungry applications such as multiplayer gaming and video streaming;
Security Mechanisms: EigenDA uses multiple layers of security mechanisms, including EigenLayer’s Shared Security, the Proof of Custody mechanism, and Dual Quorum, to ensure that the network is secure, decentralised, and censorship-resistant;
Customisability: EigenDA provides a flexible design that allows L2 developers to find a balance between security and performance by adjusting various parameters to their specific needs and use cases.

Re-pledging model

Native ETH Repledge:

Applies to independent ETH pledgers, who can point their pledged ETH to an EigenLayer Smart Contract via Withdrawal Vouchers to re-pledge it and receive additional revenue. If an independent pledger commits misconduct, EigenLayer can directly forfeit their withdrawal credentials;

LST Repledging:

LST (Liquid Staking Token) stands for Liquidity Pledging Token. Ordinary investors, even if they don’t have 32 ETH, can “carpool” through Lido, Rocket Pool, and other liquidity pledging protocols, deposit their ETH into the pledging pool, and receive LSTs representing their ETH and their right to claim the proceeds of the pledge. Users who have already pledged ETH in Lido and Rocket Pool can transfer the LSTs they hold to EigenLayer smart contracts, so as to achieve repledging to obtain additional income;

LP Token Repledging:

LP Token Repledging is divided into ETH LP Repledging and LST LP Repledging.

ETH LP Repledge: Users can repledge a pair of DeFi Protocol LP Token including ETH to EigenLayer.
LST LP Repledge: Users can repledge a pair of DeFi protocol LP Token containing lsdETH to EigenLayer. For example, the stETH-ETH LP Token of Curve protocol can be re-pledged to EigenLayer.

Celestia in Cosmos

Currently, there is no blockchain that truly solves the impossible triangulation problem of decentralised, secure and scalable blockchains, and Cosmos believes that only a multi-chain design architecture can overcome the trade-offs between them to some extent. Before discussing Celestia, let’s briefly review Cosmos, in which blockchains achieve interoperability through the IBC (Inter-Blockchain Communication) protocol. Below is a detailed discussion of security between Cosmos chains:

IBC PROTOCOL SECURITY: IBC is the protocol that ensures communication between chains in Cosmos network. It ensures the confidentiality and integrity of messages by using mechanisms such as encryption and signatures.The IBC protocol includes a series of authentication steps to ensure the trustworthiness of inter-chain communication. With IBC, Cosmos chains can securely transmit messages and assets against fraud and tampering;

Consensus Mechanism Security: Individual blockchains in the Cosmos ecosystem may use different consensus mechanisms, the most common of which is Tendermint.The Tendermint consensus algorithm ensures consistency between nodes through Byzantine Fault Tolerance (BFT). This means that the system can still function properly in the presence of a certain number of malicious nodes. The security of the consensus mechanism is crucial for the stability and security of the entire network;

Hub Security : There is a centralised blockchain called Hub in the Cosmos network which acts as a bridge between different chains.The security of the Hub plays a key role in the stability of the entire ecosystem. If the Hub is not secure, it may lead to problems in the entire network. Therefore, ensuring the security of the Hub is an important task in the Cosmos ecosystem and involves strict control over its consensus mechanism and node management;

Asset Security: As assets can be transferred between Cosmos chains, ensuring their security is crucial. By using cryptography, Cosmos chains are able to protect against malicious activities such as double-flowering attacks. At the same time, the IBC protocol is designed to make the transfer of assets across the chain secure and reliable;

Smart Contract and Application Layer Security: The Cosmos network allows for the development of smart contracts and distributed applications. Securing this level of security is achieved by ensuring code quality, auditing, and vulnerability remediation for smart contracts and applications running on the blockchain.

Celestia enables scalability and flexibility through a modular design that separates consensus and execution, facilitating a customisable ecosystem for a wide range of blockchain solutions. In contrast, Cosmos promotes blockchain collaboration in an ecosystem-neutral manner, emphasises interconnectivity between independent blockchains, and integrates consensus and execution using Tendermint to provide a cohesive environment, which has the intuitively negative effect of losing its own flexibility. Celestia’s modular approach provides enhanced scalability, development flexibility, and customised solutions to meet the needs of different applications, and there are calls for Celestia+Cosmos to be the final form of the future application chain.

Celestia’s ICS with EigenLayer’s EigenDA

However, it is worth paying attention to the recent mention of ICS (Interchain Security) in Celestia’s proposal, as opposed to EigenLayer, which is a data availability layer built on top of Ethereum, and some of the contrasting aspects of ICS vs. EigenLayer, and how they relate to each other can be understood in the following ways:

Shared Security: Celestia’s proposal discusses the possibility of using ICS to use validators in the Cosmos ecosystem (e.g., those in the Cosmos Hub) as Rollup sequencers for Celestia. Such an approach would allow multiple Rollup networks to share the same set of validators, enabling shared security. This idea is somewhat similar to the idea of shared security in EigenLayer, in that both provide security by leveraging the validators of the underlying blockchain network. The difference is that ICS uses the validators of the Cosmos Hub to provide validation services for the connected blockchains, which improves the security of the whole ecosystem through a shared security model, while EigenDA provides validation services through the EigenLayer on Ethereum, which uses ETH’s validators to validate the Rollup network’s Data Availability;
Decentralised Sequencer: The concept of a decentralised sequencer mentioned by Celestia makes use of the ICS approach. This is somewhat similar to the use of EigenLayer’s Restaking Primitive (repledge mechanism) in EigenLayer to build decentralised sequencers. Both attempt to achieve a more decentralised sorting mechanism through the properties of the underlying protocol;
Rollups Composability: Celestia mentions that cross-Rollup composability can be achieved by using the same sequencer in multiple Rollup networks (possibly via ICS). This is somewhat similar to the goal mentioned in EigenLayer of wanting to have multiple AVSs (Active Verification Services) in the EigenLayer ecosystem collaborating with each other to achieve higher levels of composability and interoperability;
Economics: Putting aside the technical aspects of Celestia and EigenLayer, from the perspective of the market, users are more concerned about their own revenues, and EigenLayer is slightly stronger than Celestia in terms of layered revenue stacks for LSTs and other benefits, as well as the expected value of airdrops for the entire EigenLayer ecosystem in the future.

Comparison between DA layers

Data Availability (DA) is abbreviated as DA. At present, in the upgrading route of EtherChannel, the whole process is mainly based on Rollup, and the role of DA in the process is to save or upload all the transaction data of the whole Rollup.The emergence of Rollup is to solve the scalability problem of Layer1, but the actual access to Layer2 data through DA will affect the overall security and TPS level. Layer2 data will affect the overall security and TPS level, in order to allow Layer2 to inherit the security of Ethernet, Ethernet needs to be able to upload a large amount of Layer2 data by optimising the entire protocol security mechanism.

In the consensus mechanism, there is a fundamental dilemma, that is, the effectiveness and security, the former ensures the fast processing of transactions, and the latter ensures the accuracy and security of transactions, for which different blockchain systems will make different choices to achieve a balance that meets their actual needs. Ethereum, Celestia, EigenLayer and Avail solutions all aim to provide scalable data availability for Rollup, and based on the data provided by Researcher@likebeckett and Avail, I’ve summarised it below.

Celestia:

Decentralised Sequencer Proposal: Celestia discussed a proposal by COO Nick White to implement Celestia’s decentralised sequencer using Interchain Security (ICS) from the Cosmos ecosystem as a way of leveraging the Cosmos Hub’s validators to provide shared security for the DA layer via ICS. Shared security for the DA layer via ICS using Cosmos Hub authenticators;
Atomic Composability across Rollups: Celestia improves composability by enabling atomic transactions across multiple Rollup networks with ICS. The same sequencer enables multiple Rollup networks to work together, addressing fragmented mobility and reduced composability;
Multi-Rollup Interoperability: Using the same sequencer, Celestia facilitates interoperability between multiple Rollup networks for better mobility and data availability.

EigenLayer and EigenDA:

Data Availability Services with Shared Security: EigenLayer provides data availability services through EigenDA, which, unlike traditional blockchains, is a set of smart contracts built on Ethereum that leverage the concept of shared security. EigenDA can be used as part of the Celestia ecosystem to provide efficient, secure, and scalable data Availability;
Decentralised sorting: EigenLayer emphasises its decentralised sorting mechanism, which essentially adds ETH tokens and forfeits to the PoS process of the Rollup sorter to provide greater security for the Layer 2 network. Through this mechanism, EigenLayer achieves an efficient sorting process;
Data Availability Service: EigenDA focuses on providing data availability service for the Layer 2 network, providing high-performance data transmission for on-chain applications through EigenLayer’s shared security and decentralised sorting.

Avail.

Designing for Data Availability: Avail focuses on designing for data availability and introduces the Data Availability Sampling technique. This technique allows light nodes to verify data availability by downloading only a small portion of a block, rather than relying on the entire node for data, thus increasing the scalability of the network;
Interaction between blockchains: Avail is designed to improve interaction between blockchains. Light nodes that support data availability sampling make it more flexible to increase block sizes, improving overall throughput;
EIP 4844 Adaptation: Avail is actively involved in Ethereum’s implementation of EIP 4844, a key component of Polygon’s vision for a modular blockchain, a proposal designed to increase block sizes and lay the groundwork for the implementation of Danksharding, which allows Avail to adapt to upgrades in the Ethereum ecosystem.

Conclusion

For Rollup, 24 years, in addition to the certainty of the narrative brought by the Cancun upgrade, the DA issue debate has also brought about questions about the precise positioning of Layer2. Putting aside for the time being the issues of orthodoxy, security, and cost that Ether Data Availability actually faces, this Celestia vs EigenDA debate does not difficult to bring out a thought, in the Ether Killer and Ether Protector Under the confrontation between Ether Killer and Ether Protector, whether the future will lead to more market competition in the direction of combinable modules, so that there will be a new round of 10,000 flowers blooming in the way of Ether expansion.

Although the blockchain itself has many limitations, from the perspective of the financial market, the upward momentum of all markets comes in large part from the “hypothetical space”, which always needs to be fed with fresh stories. As for innovation itself, in addition to maintaining its own correctness, the “side road” is also a narrative direction outside the original framework.

About YBB

YBB is a web3 fund dedicating itself to identify Web3-defining projects with a vision to create a better online habitat for all internet residents. Founded by a group of blockchain believers who have been actively participated in this industry since 2013, YBB is always willing to help early-stage projects to evolve from 0 to 1.We value innovation, self-driven passion, and user-oriented products while recognizing the potential of cryptos and blockchain applications.

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