Executive summary

• Homepage: https://celestia.org/; Entity

• Explorers - Test-net

  • https://testnet.mintscan.io/celestia-testnet

  • https://celestia.explorers.guru/

  • https://celestiascan.vercel.app/

• Product: Consensus and data availability, to projects which are serving as settlement, and especially execution layers. Optimint: Allows to build Cosmos-based chains as rollups that can use other chains such as Celestia as a consensus and data availability layer.

• One-Liner Pitch: Pluggable consensus and data availability layer, to enable anyone to quickly deploy a decentralized blockchain without the overhead of bootstrapping a new consensus network.

• Use-Case: Potential users of Celestia are rollups, Sharded L1s

• Team: Mustafa Al-Bassam CEO, PhD in blockchain scaling at UCL, Co-founder of Chainspace (acquired by Facebook); Ismail Khoffi CTO Former senior engineer at Tendermint and Interchain Foundation; John Adler CRO, Creator of Optimistic Rollups, prev scalability researcher at ConsenSys; Nick White COO, Co-founder of Harmony

• Social Stats: Twitter - 85k; Discord - 56k

• Funding Round & Valuation: Total capital raise of $56,500,000. Seed $1.5 Million March 2021, last round (unknown stage) $55 Million.

• Investors: Interchain Foundation, Binance Labs, Maven 11, KR1, Signature Ventures, Divergence Ventures, Dokia Capital, P2P Capital, Tokonomy, Cryptium Labs, Michael Ng, Simon Johnson, Michael Youssefmir and Ramsey Khoury.

• Competitors: Filecoin; Arweave; Kyve; Security layers like Axelar, Layer zero etc. since Celestia allows cross-chain interoperability with light clients

Valuation

Pros:

• Optimint SDK ready to accept Cosmos based chains as rollups.

• Superstar team track record, CEO made an exit to FB, COO co-founder of Harmony, and other core members have directly contributed to IBC and Tendermint and optimistic rollups.

• Target users are Rollups, positioning celestia as market leader in a booming development trends.

Cons:

• No clear stats on testnet yet.

• No info on economic model and tokenomics.

• Unclear competitor landscape. Security layers like Axelar and LayerZero could potentially over the data availability market as well.

Relevant Notes:

• Product delivery (state of dev.): Devnet was released in . Devnet Dec 2021 features three core components: celestia-node, celestia-app and optimint. No stats on testnet. Q2 Update.

• Founding: Total raised is 56.5 Million, good war chest.

• Token utility: Validating the network, no token economics out yet.

Product Use Case

Target: Rollups, Sharded Blockchains

Problem: Data availability - Fraud proofs.

• Rollups are a design that uses a blockchain only as a data availability layer to dump transactions, but all the actual transaction processing and computation happens on the rollup itself. This leads to an interesting insight: a blockchain doesn’t actually need to do any computation

• This is the design philosophy of Celestia which is a “lazy” blockchain that only does the two core things that a blockchain needs to do — order transactions and make them available, in a scalable way. This makes it useful as a minimal “pluggable” component for systems such as rollups.

Features: Secure cross-chain interoperability with light clients.

• Cross-chain interoperability relies on light clients which are typically not secure because they make an honest majority assumption. However, with Celestia, light clients do not need this assumption, which unlocks secure cross-chain interoperability.

• Instead of downloading the entire block, Celestia light nodes just download small random samples of data from the block. If all the samples are available, then this serves as proof that the entire block is available. Basically, by sampling random data from a block, you can probabilistically verify that the block is indeed complete.

DevNet release:

• The celestia-node repo takes care of the consensus and networking for the blockchain. It's how Celestia full and light nodes make new blocks, sync new blocks and block headers, and of course sample data from blocks.

• The celestia-app repo is where the state machine for the chain lives, which handles staking and transaction processing.

• Optimint is the software that allows a Cosmos zone to deploy directly on Celestia, as a rollup. It spins up its own p2p network, collects transactions into blocks and posts them onto Celestia for consensus and data availability.

Core Team

• Mustafa Al-Bassam CEO, PhD in blockchain scaling at UCL, Co-founder of Chainspace (acquired by Facebook)

• Ismail Khoffi CTO, Former senior engineer at Tendermint and Interchain Foundation

• John Adler CRO, Creator of Optimistic Rollups, previously scalability researcher at ConsenSys

• Nick White COO, Co-founder of Harmony, BS & MS from Stanford

Click here to have a look at all the team members of Celestia Labs.

Quick Note on Data Availability

This problem asks: how can nodes be sure that when a new block is produced, all of the data in that block was actually published to the network? The dilemma is that if a block producer doesn’t release all of the data in a block, no one could detect if there is a malicious transaction hidden within that block.

Where Is the Data Availability Problem Relevant?

Specifically when it come to scalability issues...

But what if we wanted to increase the block size limit? Less people will afford to run full nodes and independently verify the chain, and more people will run light clients that are less secure. This is bad for decentralization. Therefore, adding fraud proof support for light clients becomes very important, but as discussed, light clients need a way to check that all the data in blocks has been published for this to work.

These shards have their own block producers, and can communicate with each other to transfer tokens between shards. The point of sharding is to split up the block producers in the network so that instead of every block producer processing every transaction, they split up their processing power into different shards that only process some transactions.

A full node in a sharded blockchain will run a full node for only one or a few shards, and run a light client for every other shard.

In order to solve the problem of detecting if any shard accepted an invalid transaction, you need to be able to guarantee that all the data in that shard was published and made available.

• Optimistic. These sidechains have their own dedicated block producers, which can transfer assets to and from other chains. fraud proofs are needed. Rollups on Ethereum deal with this by simply posting all of the rollup blocks on to the Ethereum chain and relying on it for data availability, therefore using Ethereum as a data availability layer to dump data on.

• Zero-knowledge (ZK) rollups. Similar to optimistic rollups, but instead of using fraud proofs to detect invalid blocks, they use a cryptographic proof called a validity proof to prove that a block is valid. Validity proofs themselves don’t require data availability. However, ZK rollups as a whole still require data availability, because if a block producer makes a valid block and proves it with a validity proof but doesn’t release the data for the block then users won’t know what the state of the blockchain is and what their balances are, and so won’t be able to interact the chain.

Sources

Thesis and technical docs:

• Celestia’s ‘Modular Blockchain’ Attracts Investors Looking for Scaling Breakthrough

• Modular vs monolithic: a beginner's guide

• Securely Scaling Blockchain Base Layers - Mustafa Al-Bassam

Written with ♥️ & 🧠 by Mark Mercatali (find me on Twitter and LinkedIn).

Disclaimer: This analysis is not intended as investment advice, but is published for informational purposes only. As always, we strongly advise to do your own research. If you do find any misleading or incorrect information please report it to info@3vlabs.io.

Executive summary

New investment opportunity - ZkSync (Matter Labs)- round: total of $258M in funding over 4 rounds. Their latest funding was raised on Nov 16, 2022 from a Series C round.

• Homepage: https://matter-labs.io/

• Explorers:

  • V. 1.0 Mainnet: https://zkscan.io/;

  • V. 2.0 Testnet: https://explorer.zksync.io/, https://zksync2-testnet.zkscan.io/

• Product: Layer 2, soon L3 “Pathfinder”

• Language: supports Account Abstraction, Solidity and Vyper

• Use-Case: Zk-Rollup. EVM compatible - ZkSync 1.0 (limited to swap, trading, paying) - V2 is the first general purpose Rollup (deploy contract etc)

• Team: Alex Gluchowski Founder and CEO; Marco Cora Head of Business Development; Petr Korolev Head of Operations; Angela Lu Product.

• Social Stats: Twitter - 494k; Discord - 249K;

• Funding Round & Valuation:

  • $258M Funding - https://astrol.pro/project/279

  • 200 million grant: Commitment by BitDAO across 5 tranches, first tranche being $40M, and subsequent tranches will be released based on achieved milestones and BitDAO governance vote approval. https://zkdao.io/

• Investors: Seed - Placeholder, DragonFly, 1KX. Series - A16Z, Lightspeed Ventures, Coinbase ventures, Aave, Consensys, Crypto.com, Covalent, Alchemy, et alia.

• Competitors: Aztec, Starkware, Polygon, Scroll.

Valuation

Pros:

• Leading General purpose zk-Rollup, with fast-paced development compared to competitors.

• Well founded, with 200mil (40mil available) for Ecosystem grants and development

• Layer 3 coming Q1 2023, with

Cons:

• High competition for Dapps and “Dapp chains”.

Future Development: zkSync’s EVM-compatible Layer 3 ‘Opportunity’ prototype will be deployed to public testnet in the first quarter of 2023.

Deal Structure

Raised a total of $258M in funding over 4 rounds. Their latest funding was raised on Nov 16, 2022 from a Series C round. The main source we used can be found here.

Product Use Case

Target: dApp developers, Ethereum users.

Problem: Gas Fees, Scalability.

Features:

• zkSync Layer 2 - V.1 - limited to swap, trading, paying

• zkSync Layer 2 - V.2 - General Purpose

  • General-Purpose ZK Rollup — To support general-purpose applications

  • EVM-Compatible — To enable easy porting

  • Solidity Support — To support the most common language for smart contract developers

  • Open Source — To protect the freedoms to view, change, or fork the code

  • Ethereum Ethos Compatible — To represent the values of the ecosystem with a decentralization model

• zkSync Layer 3 - Pathfinder

  With zkSync’s Layer 3 solution, developers will be able to choose from 3 data availability options all using the same proving infrastructure for their project. Developers can choose their own trade-offs between price, performance, and security.

  • Zk rollup — Choose this if you want to have the full security of Ethereum (Good for DeFi).

  • ZkPorter — Choose this if you want a mixture of your data to be made on-chain and off-chain to optimize for cheap, fast, and secure (good for gaming).

  • Validium — Choose this if you want ultimate performance with slightly less security than Ethereum (Limitless Use Cases).

Written with ♥️ & 🧠 by Mark Mercatali (find me on Twitter and LinkedIn).

Disclaimer: This analysis is not intended as investment advice, but is published for informational purposes only. As always, we strongly advise to do your own research. If you do find any misleading or incorrect information please report it to info@3vlabs.io.

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