Nick White and Jon Charbonneau on The Rise of Celestia's Native Ecosystem

Transcript

2025 is going to be even more exciting in terms of like truly scaling the The Da throughput are you expecting significant demand increases for Celestia block space Celestia will be certainly far ahead of what like somethingone like ather will ever probably be able to ever provide it's uh when not if there's more transactions driven by AI agents than humans that's the level of scale that we want to get to next year welcome back to the rollup your home for Tech techical talks and open conversations that shape the modular future nothing on today's show is to be construed as Financial advice you can see our full disclosures list at tholl up.co ventures sit back relax and enjoy today's episode after a quick word

from some of our awesome Partners safe is moving the world's GDP onchain with the introduction of safet safe is taking this to the next step very soon check out n.s. Global to learn more about how safe is moving the world's GDP onchain all right welcome welcome to Bangkok once again Nick it's good to have you um John good to have you back uh last one for the day so um yeah how you feeling Nick feeling pretty tired I'll be honest yeah but uh it's been a whirlwind and uh lots of fun events and great people as always I feel like Devcon is usually the highlight of the year in terms of like technical conferences so yeah there's no token 249 fluff here

no no shots taken but you know we like like the research K's you know what I'm saying yeah me too it makes two of us um one year after or a little over one year from Celestia's main net um around around this time 21 chains live 150 gigabytes posted to celesa 45% of Da market share which I think is actually somewhat misleading maybe you can kind of like uh give some insight there exactly what that means but broadly like how H how are you feeling about the growth and the overall kind of reflection of your past year um honestly I've been really pleasantly surprised at how quickly the ecosystem has grown and

I'm really proud also of the engineering accomplishments and the road map that we published and uh something most recently that I think is the most exciting thing is the mammoth mini test net which uh sort of showcases some of the first uh implementations of some of the road map uh engineering milestones we have planned and it it just shows how quickly we can scale the block size so I think 2025 is going to be even more exciting in terms of like truly scaling the The Da throughput but yeah in terms of the ecosystem adoption I think like given that it's been one year um I've been like pleasantly surprised at how quickly

things have have picked up we've had you know the first Sovereign rollups launch like Forma most recently flame um we've had you know a whole sort of like native ecosystem that's about like on the cusp of kind of like coming out so Eclipse recently launched their main net and um I think like alt VM season is going to come very very soon and consume that block space which is why we're we're kind of laser focused right now on scaling the the throughput I think like even though we're at 10% utilization um I I feel like that could like very quickly especially if this bull market really takes off off quickly get saturated so bullish yeah I'm I'm

bullish as well I mean there's one element where um bull market brings in a lot of new users uh like a lot a lot of um transactions as a result of like trying like new incomers that maybe only kind of come around like in Bull markets but one thing we were talking about earlier was this Advent of AI agents that are interacting on chain over the next like couple years that I mean in my opinion will pred like dominate block space and transactions like like more when I CU to me it's a matter it's it's uh when not if uh there's more transactions driven by AI agents than humans and I think that is where we really need abundant block space and

High throughput um because I mean that they operate at an entirely different uh uh level as like relative to human transactions so yeah and I think that we've had this like over supply of block space which we're kind of talking about yesterday but like it feels like that quickly can change you know like like the narrative has been like there's too much block space we don't need more chains we don't need more rollups but I think that I think that all it takes is a couple apps and that changes quickly well yeah I mean um I feel like it's a this happens every cycle where it's like oh you know we're never going to need so much block space or scalability and then there's a bull market and then it's like oh [ __ ]

we need like an exponential like increase in the the capacity of blockchains and I think like this cycle is going to be no different and I think um hopefully Celestia can be there to actually like you know Supply the market with the block space that that it needs um rather than have hitting these scale fails which you always seem to hit in previous Cycles I mean suppose suppose Celestia does get filled up and like utilization goes from 10% to like 80 90 100 what like I guess what happens is maybe too Brad of a question but like you know the the goal is to just Contin continuously increase block size so would would it

just mean like okay that like we've validated you know we've reached utilization of our current uh capacity it's just time to like like we're on the right path just continue to forge ahead I mean well as like any blockchain when the blocks fill up then you start having a fee Market that develops and um you know Mustafa tweeted about this recently where you know there's a lot of fud about like the the fees on celes being too low and the the if you think about it I mean people said the exact same thing about salana um that it would never be economically sustainable because it's like too cheap um and I mean every blockchain starts out where you have fees not actually to make money

but to serve as a sort of like Doss resistance mechanism and so Celestia's block space is essentially free right now so looking by Design Yeah by Design yeah like I mean if like Bitcoin or ethereum I guess ethereum maybe is a little bit different with 559 but like uh if there aren't if the block space is not full then the fees like go down and Shrink potentially basically to like like a very very low Baseline so um anyway if the blocks do get saturated then a few Market would develop now the goal the one of the design goals of celesy is that like we don't want to have we want to avoid congestion where

possible where we don't want to like price out actual users just trying to do normal things on chain uh we don't want to repeat like crypto kitties and like ethereum style congestion um that's a lofty goal I mean especially I mean like some people think like I mean to's always like oh you know I I pray that my competitors build for infinite demand or whatever like that but like I truly think that there of course that like there's not going to be infinite demand for lock space but there's going to be a huge amount of demand for Block space um and so we're trying to build for that future and I think um yeah the goal is like not to have crazy fee spikes but like it's okay if a fee Market develops but hopefully we're like low enough that

the uh yeah like average user transaction is still extremely cheap to the point where users are not feeling it uh and and and apps are not incentivized to migrate because they're like paying it's not meant to be extractive like the way that I think about it is that block you can charge for Block space up to the amount of the value that it is contributing to those like giving out to those applications or those users and where that price is we don't we don't actually know and I think it depends on a bunch of different factors but it's definitely not zero and um as long as you're charging so if you're charging that amount yeah at some point if you exceed that then it's like okay my I'm I'm an L2 I'm a

user whatever I'm rationally going to migrate somewhere else right and I think we saw that initially when Celestia launched um before 444 came online and the the call data fees were just incredibly high it was like kind of a no-brainer for a lot of different teams to migrate to Celestia it was sort of like a off offloading mechanism where it's like I can they people were literally saving millions of dollars P AO and and man to both yeah yeah exactly and now that's no longer the case uh because of 444 which is great um but now the blobs are getting filled they're at 80 or 90% yeah yeah but I think I mean yeah well I I think I think blobs realistically will the price will go up but I think it's

irreverently like they they they've they've made it significantly cheaper and I think it'll stay I don't think it hopefully it'll never get back to like call data back yeah back in the days kind of price prices and and I think they they have a scaling road map but where lesia is today so by the way um the ginger upgrade which is uh hitting test Nets now basically and will hit main net I think sometime in December is uh drops our block times from 12 seconds to 6 seconds so we could double our throughput and reduce latency kind of similar to uh I ibrl and salana increase lat but um and then and within that also there's a capacity to increase the block

size from 2 megabytes to 8 megabytes so in total with that upgrade we can eight X our throughput yep so and I think if I have the numbers correctly I think that is basically already the Dank charting Target throughput um I could be wrong but I think it's close like in that ballpark and then they're gonna stop there sorry is ethereum gonna stop there no definitely not but but like I guess what I'm saying what I'm trying to illustrate is that like Celestia is already almost there okay and and then again that's not even touching on Ginger is like has like very little of the the actual real road map

shipped and what what like what you can look to as a telegraph of where we're going next is Mammoth which we've implemented um uh something called vacuum which is similar to like uh the the sort of dag based uh consensus protocols like um narwhal and things like like Tusk the things that sui and Aptos use and that it decouples the uh propagation of transactions like the men poool from the consensus and then and there's also something called compact blocks which is originated from Bitcoin anyway what it does is it just like massively uh makes the uh protocol more like bandwidth efficient on the

consensus side which means we can scale the block size like 150x almost if we can hit those numbers on May net this is a closed test net so all fairness I've criticized other projects for you know publishing data or like metrics on a closed test net so take it with a grain of salt but like that's the level of scale that we want to get to next year yeah and I think that like I mean I I mean if we have like 30 megabytes per second of of Da bandwidth I feel like that's a lot um that's I think over four four times the throughput of salana today um if not potentially more especially if you consider you can like do compression and other clever things

with with rollups to consume less da than like I guess the way that Sal might do their transactions so a lot of amazing upgrades coming from after one year just in the next couple months and I want to touch more on kind of the like the vision of of the fees being related to Tia um a bit later on but I just want to give John a chance to kind of from from an outsider's perspective looking in on the growth of Celestia what's been what's been some of your key takeaways and just broader thoughts on the development of this alternative da Market as a whole and specifically on Celestia yeah no I mean the last year has definitely been impressive to watch um and really do

like the direction that the road map is going um like definitely seems to be a like very clear focus on like you guys like very clearly know like what the end game is like how exactly do we need to architect Celestia um in reflection of that um and so I I think it's pretty clear I mean that like Celestia will be certainly far ahead of what like someone like ethereum will ever probably be able to ever provide um both on like the ultimate kind of endgame scale that you'll provide um but also like time to Market of that of like obviously ethereum you know these other chains like they have to move a lot slower um so as of right now I mean like it it's not completely filled up yet I mean like the main interesting to uh thing to me to see now is okay like seeing the

actual use cases that are like popping up and um and kind of using it and so I mean like obviously that takes a while um and start a lot of the new stuff that you're starting to see now is where you're starting to see the early signs of like okay there are like a lot of cool unique things that like this is kind of the default place you go like hey I just want to launch a chain I want it to be cheap I want it to be easy to use um like if you guys are starting to get those like that's a really good s um and I've started to see that I mean like cool stuff like I know that you know well like we work with now is like a team like pay um stuff like that like genuinely like one of my favorite things

that I've like seen in crypto in a long time of like this is just like one of the obvious use cases that we've like wanted to see for a long time it is like it is a chain dedicated to doing private payments which is like the most obvious thing that like we know crypto is awesome at this thing um and what do they not want to worry about is like you know having cheap infrastructure in the background um and so like they like they will end up using SL and so stuff like that I mean getting you know 100 more of those a thousand more of those a million more of those is like what you want to start seeing for the years to come but I mean everything tracking well so far yeah just I mean uh I'm so glad you brought up pay because they're my

favorite like crypto app I've ever used uh and I'm just so genely so thrilled that they're I mean I used it last night I use it all the time um I love onboarding people to it it's insane I swear to God well when you use pay you cannot be bearish on the future of like actual consumer applications because it is that smooth like you just download the application never store your seed phrase you can onboard money with Apple pay in literally like 5 seconds and then you can you generate a ZK proof and like can send it to anyone and it's like just like private digital cash right there it is seriously mind-blowing and like and I

I had another experience with which is that I just recently changed phones and I wiped my old phone and then I realized I was like oh [ __ ] like I open pay and it was all blank and I was like [ __ ] I [ __ ] like deleted my private key or whatever and then uh like 5 seconds later like my balance popped up and it's because they have a iCloud backup Pass Key and like yeah and I was just like holy [ __ ] so like I like never even have to think about my private key y not once yep yeah we saw that with infinex as well I think that the General crypto app sphere is moving towards face ID pass keys and then I mean we can't discredit what pay is built on the actual app itself yeah with Celestia underneath of

of of course I think that's like the first iteration of like a really really solid consumer app on Celestia and then now we we have eclipse live I think I put out a tweet that was like uh fuel Network went live eclipse live yesterday Anisha tomorrow quote unquote not not Financial advice um and then movement you know next week right and so and so what are you thinking about like with this like alt VM expansion for it's like for Celestia and for the broader modular ecosystem as a whole are you expecting significant demand increases for celesia Block space definitely yeah I think um I mean when Eclipse went live obviously with with virtually empty blocks the amount of like da8 that they needed was

massive yeah because they have 400 millisecond block times and they're just stuffing the blocks like directly the headers directly on yeah so that adds up very quickly um but just taking a step back before we get into eclips and stuff I just wanted to like pay for example and and eclipse and these all VMS are both like applications that I feel really only make sense on Celestia because well like the like pay itself needs to be an app chain because in order to enable their privacy they need to like have a utxo based like execution model uh is very similar to zcash so like there's not they're not just like another L2 they're like a purpose built they're like the one of the best examples of a true app chain and like

why I hate having these arguments of like with toally of like oh anything you could just build on you know just a smart contract you just have to make it whatever their token extension [ __ ] thing it's like there's just certain things you can't build within like the confines of a predefined virtual machine like try building pay on svm go for it have fun yeah you're not going to do it yeah and so anyway like and and then also like if they want to be a consumer app so there's another like thing that you know susia stands for which is this like Unstoppable applications notion and like what that means is we want to build applications that

are like they they won't be stopped by several different things one they're Unstoppable from like a scalability perspective cuz like yeah you could have build a payments app like pay and then you start armboard it goes like vertical hockey growth and then all of a sudden like you just max out and you can't even your infrastructure can't support it or oh it's private and and I don't know or like some some government or some someone tries to block you and like censor you or whatever like you're built on a chain that is censorship resistant enough to ensure that you you're not going to get shut down and also it's like verifiable by end users so it's like it's like this Incorruptible like we want to like what that's always been

the vision of what Celestia is supposed to be is like this security Incorruptible like security layer on which you can build you know things that are extremely powerful and like kind of deliver on the original vision of of of crypto and like payment private payments is one of those and then all vmms are similar because they just need a a shitload of throughput and like there is nowhere else that you can go today right now to build if you want to have a salana on and and again actually I hate you know I don't know I'm mentioning toally so many times but uh you know he also me it all out today he me he mean I love the guy by the way this is actually not this is not a throwing creating some enemies recently on Twitter this guy this guy's

getting a little spicy there no no there's no enemy I I genuinely actually love toi and Sana as a project yeah I'm I'm seriously very aligned um but he's just good at trolling so like his other troll move is like oh well you know just make salana a roll up on ethereum right just oh just post all the data on ethereum and um and obviously the do there is like it's just so far from being possible but uh you know so it's like kind of like proving his point of like anyway and but the thing is like with Celestia you actually could potentially do that and that's why and only is Celestia and that's why eclipse for example and all these all highr about movement initia uh building on Celestia like

makes sense and it's like why we're enabling that like without that if you Tred okay try to build eclipse on ethereum blobs you're screwed yeah so Eclipse movement and then initia with I think like maybe eight rollups to start or six rollups maybe more maybe 10 15 yeah I know I'm just giving them the I'm giving them a little conservative guess here um so are you expecting so we have the ginger upgrade which is going to quadruple the block size um eight eight eight times eight times okay four times the size of the blocks but also half the block time right okay and so are you expecting um I mean I'm sure you can't give like exact ideas here but like what kind of demand

jump are you expecting from those three in the next like three to six months dude I how I have no way to predict that um because I mean dude I mean it depends on so many things um well just what what was the jump that you saw when Eclipse went live you said that they were stuffing the block headers into the into blocks it was probably a 50% increase but again like well from the Baseline so like it went from 5% % utilization to like 10% yeah so oh I so you know that but that was pretty significant but again likea claiming like credit for that or whatever uh or making that seem like a big deal is a little bit of a misnomer because it's like it's just empty blocks you know what I mean so it's like right we're not you know it's not something

that we we we want to like go out there and be like oh look at this but like Eclipse recently went live for actual users and I think um hopefully they're going to be launching more applications I mean I know they will over the coming month and so hopefully and they're going to start like rolling out liquidity and points and I I believe so like there's going to be I think an influx of users okay um and so that that's going to be exciting I mean also all this is a contingent on I think movement and initia equally have extremely exciting go to market plans where there I think there's going to be a ton of ton of users and liquidity and all that stuff it's going to be a very exciting time and it's also very dependent on the bull market because like this this whole

industry is so cyclical yeah like people want to come and speculate and you know Farm air drops and stuff like that when when the Market's up and people care all of a sudden again you know whereas like in the bare Market it's a ghost town so before we gets into some of the more uh security and technical stuff I just want to give you a chance to chime in on any of that uh kind of Salon trolling and uh how it relates to what Nick's saying no I mean it's definitely all fair um uh and totally is very very good at trolling um but yeah no I mean very concretely I me like that that is why eclipse is on top of Celestia and not on top of ethereum um at least for da um and like disclosure we're obviously in clipse investors um that that was the

obious choice when they're making it it was like okay we see that Salon is great we also have a strong view that ethereum L2 is great like we want to be scale e the asset um provide those kind of users with more scalable execution but like like what is the best option available it like it is Celestial da um that that is going to be the most scalable thing um or is now and is likely to continue to be so in the future so that is the obvious thing um and yeah I mean th those initial stats were just from like their uh developer mainten but like they're effectively like empty blocks and now they finally launch their uh real user made net just a few days ago um so hopefully we'll start to see those order of magnitude increases now um now that like real apps and real users are all

going to be there um but yeah try trying to project like you know what is the even like midterm state of like how many transactions are like eclipse and all these other alt VMS going to be doing is like is it 100 is it th is it 10,000 CPS like I like a man's just trying to be bullish over here you know so so as as those orders of magnitude start to compound and and tia start utilization starts to increase and we have all these rollups go alive and that contributes to to to the utilization going up what are the network of like how what is the value of cruel thesis to Tia the token what is so I think to before we get into that one one last piece of the road map that I think ties into this whole

question uh really well uh as a prequisite to cover is uh lazy bridging which is essentially ZK accounts um and uh the reason it relates this is like ZK accounts are so as people listening may or may not know Celestia does not have Smart contracts or applications you can't build you know a bridge on Celestia L1 there's IBC support but that's like quite limited and um so there's a proposal to add this feature called ZK a ZK verification feature to the state machine so you can actually build like Bridges and other like basically it gives you the functionality

of having smart contracts but without adding a full State like execution environment and without adding additional State um and could I ask you to clarify something real quick just because Celestia's like big thing is build whatever so how do we like why and I I think I mean you're kind of getting to like why Bridges weren't possible but are going to be possible and so like what I guess is the are are there other limitations to the to to build whatever or are we removing those limitations and kind of like really letting build whatever proliferate I guess like I I didn't I guess yeah I you were starting to explain I I may have interrupted you but

why was bridging not possible yeah so I think you know build whatever is already possible for the rollups themselves in the sense of like they have full stack customizability and they have all this throughput to play around with but Bill whatever is not really true on the Celestia Bas layer because we made this opinionated choice of like we don't you know Celia is meant to be as minimal as possible on the L1 but then that came with these really kind of crappy trade-offs I feel like even John may have been one of the first like vocal critics or pointing out like this is really bearish that you know Celestia can't have canonical Bridges and can't Bridge Tia up to its ecosystem in a trust minimized way right um and so that that very much limits like what you can

do with ti of the asset in the long run the interesting thing is like there ways around that that the ecosystem is already doing like you know when Forma this like nft chain launched uh it's a sovereign rollup doesn't have it's not like settling anywhere necessarily um it doesn't have a direct Bridge with Celestia but you could Bridge Tia there uh almost instantly by doing IBC to Astria and then uh up so um that's sort of like one uh like there's ways around it essentially but the ideal end system is like you have a canonical Bridge directly from the rollup to Celestia and back and without right now because there's no smart

contracts you there's no way you can go up but you couldn't ever come back because the Celestia Celestia needs to be able to verify what's happening on the rollup and without some kind of ZK verification thing it can't do that right and you can't have ZK verification because there's no smart contracts yeah exactly okay so you you could Implement a verifier in like a smart contract but you can't do that okay but with lazy bridging uh we can we can accomplish a canonical Bridge yeah so well ZKA counts one of the things you can do is have a canonical Bridge uh for TI tier roll up then kind of like the cool thing is that what you can build around that as a like a base primitive so like Celestia has IBC IBC is now expanding ending into

almost every other L1 ecosystem so Celestia can have a IBC bridge to everything in Cosmos obviously also to ethereum L1 to salana um I don't know about Bitcoin I feel like there's there are people working on that but like the idea is that SS L1 can Bridge everywhere outside of the ecosystem and then be kind of this through IC yeah and then and then through that through that those assets can be routed through ZK accounts into those uh those rollups so then when I deploy a rollup I can very seamlessly tap into a whole the like as much liquidity as like Celestia itself is connected to and then also vice versa where you know the more rollups that are

are plugged in here the they're now only like sort of one hop away from each other and you can you can build out you know a whole kind of EOS interoperability ecosystem there including solving and intents and things like that um around that to make it a very the goal as it always should be is to have like a user experience and a developer experience that is like monoliths like let's be honest like the it's uh a huge Advantage for anyone building or using salana that they don't ever have to think about what chain they're on um and so like that's the end goal obviously there's a lot of work to get there but we think that this like feature of ZK accounts and and sort of like this this like lazy bridging Northstar is sort of how we start to

move the Celestia ecosystem toward towards that user and developer experience um and it's lazy in in in a bunch of different ways like it's lazy for the users um because they don't have to like worry about where their assets are and and like deal with the overhead of like oh you know hop hop hop or you know connecting their wallets all these different things uh lazy for the developers like you when you deploy your roll up you just need one bridge and then you're kind of set and then it's lazy from the Bas layer perspective where you as a Bas layer is not really doing much work like it's not uh trying you know I think that's that's kind of where we disagreed with this notion of settlement is like you know don't don't don't overload the base layer with State

and execution or even we don't even want to be the the asset issuing layer where like because like Sovereign those assets should be Sovereign to wherever they originate from right and like Tia is the only asset that should be Sovereign on the Celestia Bas layer um and everything else should like live wherever it lives but it can be routed through that path if it's helpful I mean there's also a world where maybe there just direct bridging between all these ecosystems and like that's also fine too but uh one point I would make there is that like in order to have and this is one of the like base Baseline to Me Network effect about data availability and consensus that like if you want to have trust minimized

bridging in the long run you need to share a common consensus and da layer like Celestia mhm and so pre- lazyy bridging you had sort of these siloed rollups that were using Celestia underneath for da but you couldn't really tap into that liquidity because you didn't have that canonical bridge and and so the the the network effects to Tia were sort of uh sort of bottlenecked sort of like that there was limitations to those Network effects because you didn't have the interconnectivity between that network of sovereign rollups um but now with a bridge you have we've been talking about monetary velocity a lot today and like now with a bridge you have greater you have a faster monetary velocity because

you have more interconnectivity you can take these routes go between these one another access applications quicker move that liquidity between these rollups quicker and so all of this leads to like faster rehypothecation and faster value acral from users being able to kind of navigate the Tia ecosystem at a greater speed and just Tia everywhere as well right like the ability to have the the the Tia token in different rollups in in the initial ecosystem and and on Eclipse I think it's it's already there I was seeing some of your posts there about t defi so so with with these ZK accounts then with regards to Rob's kind of initial question and what John and tun and I were going on about eth and soul

is like what is the right mental model then for thinking about Tia the asset how does this post ZK account future change the way we can think about using Tia and valuing Tia as far as like occurring value from uh the ecosystem itself welcome aboard on our journey into the singularity this is the endgame road map for fra and fraxel the new L2 out of the fra ecosystem that is totally based on fractal scaling fractal is a modular L2 blockchain built by fra with modular and fractal scaling in mind fractal scaling is based on the mandal BR set of fractal images and it explains how l2s become l3s and the entire app

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best out of fraxel you are still early join today take part in our Expedition into the Singularity Redstone modular oracles are available on 50 plus chains trusted by over 100 clients and over 6 billion in total value secured visit redstone. Finance to find out more I want to hear John's John and yeah um yeah so it's interesting I mean part I'll start with the fees thing because that's where it started before of um to your point of uh like a lot of people will criticize now like celesa doesn't have any fees um or at least not

a very meaningful amount you could say the same thing of salana you know a couple years ago and look at them now um the the main important distinction I would definitely draw between the two is um there is like a fundamentally different business model of like something like Salon or eum versus Celestia where uh like most of that fee revenue for something like Sal is being generated because that is a shared State machine where the majority of what people are paying is for they want Priority Access to a piece of shared State um so Celestia Curr is not going to have uh for example like any me um generally going through the base layer because that's going to be captured at like whatever are the l2s the execution layers there um so it is more of just a pure like resource cost of you know what

am I willing to pay to Celestia for you know x amount of bandwidth you know replicated by you know y amount of nodes um as opposed to something like Sona where it's like hey I like I I want to capture this Arbitrage this is worth $1,000 to me I will bid 999 of that you know to the proposer so there there is a fundamental difference there and there there's a reasonable argument that um something like uh da which there are a lot of people who argue like this is effectively just a commodity that was describing of like you know I'm paying for bandwidth you know times uh X number of nodes you know the cost of this thing over time should fall to whatever is literally like the cost to run those boxes you know some reasonable multiple you know maybe we charge like 2x to

bandwidth cost or whatever versus the other side is like Priority Access um to valuable State should be a pretty like fundamental thing that you know people are always going to be willing to pay for that um the the difficult part there though is that like there that in some sense is also not entirely fundamental to the L1 and that like you are starting to see you know what is every application trying to figure out even if they are on a shared State machine is like all right but how can I keep that for myself um and whether that's running an offchain auction or chains experimenting you know with priority ordering and meev taxes such that we could return to them all these apps want to capture that whether they're on a shared State machine or they have their own chain on top of a DA so there's

definitely pressure on both to do that um to try to drive down the costs of whatever I am paying to the L1 you know they are trying to drive it down to I want to pay the L1 like literally what are like the resource costs that they are providing to me so there is pressure on both of them um and if that does start to play out in that direction I mean what you see is I mean how do you make money you need to [ __ ] ton a scale you know we need to do a million TPS and you know charge a small multiple on that um that is kind of where it ends up um it is so hard to project that for the reasons of like what we were describing earlier of like you know how how many uh TPS is eclipse going to do in a steady

state I don't know is it is it 10 is it 100 is it is th 10,000 you know what does that look like now versus 5 years from now the same thing is true for these Bas layers you know I I can reason about like how many times I'm going to use Unis swap in a day but like I can't reason about you know how many Bots and AI agents are going to be using these chains and like are we doing a million TPS on celesy or do we need like a trillion TPS like that obviously changes your you know your the economics that are going through it a ton um so so that's the very like simple I would say like literal cash flow part of it is like honestly we just got to wait and see um kind of how it shakes out um the

part that would change that is uh and this is what gets to kind of like the bridging stuff is like that that kind of implicitly assumes that this is an entirely fundable resource of like okay you know if Celestia is causing me you know charging me like 3x the bandwidth costs and then someone spins up like Celestia 2 over there and like they're going to charge me 2x band cost bandwidth cost like why shouldn't I just go over there um the reason why you wouldn't do that is if there is some meaningful level of like locking and network effects on like Celestial one instead of Celestia 2 um and that comes from you know am I locked into that because I want to get you know seamless trustless interoperability with the other chains who are in this ecosystem and if that's the thing that's providing

that to me well I can't get that at least as easily if I'm over on Celestia number two um so so that is why it ends up becoming important to do that kind of thing um and that is why I mean you start to see people get into this like oh yeah we want to be in the middle of being you know providing that sequencing and bridging and coordination for all these other chains because that's where actually the network effects are um and I think this is something that ethereum is starting to realize a little bit now um and which is why I've been pushing this a lot on the ethereum side of I think that there is like finally started to be a realization like hey even if we are just doing the whole L2 thing and even if you didn't care about the L1 one of

the things that I think that you fundamentally should care about is we probably want to incre uh reduce the block times have single sof finality such that like you are actually the coordination layer coordinating or interop between these chains because like that's actually a meaningful Network effect um versus if you're just like pushing that coordination to another layer um and then the third part in the economic I mean this gets to what we're saying like with the ZK bridging of you can actually do interrupt with all these other chains that are on a shared di layer like Celestia today like you could just have two Celestia rollups that are just you know peer-to-peer um bridging with each other what you can't do is you can't Bridge the uh the T of the base asset up at least in like a trust minimized way um and so adding

this minimal functionality of like okay how can we verify um on the Bas layer allows you to have this kind of two-way bridging between all the um all the chains and like that allows the base asset to go out and be used in all these chains in like whatever arbitrary way is you know does it end up taking on more utility you know monetary like qualities possibly like does it end up starting to be used in defi in places like flame and eclipse and those like very possibly um and so having that functionality should increase it a lot um at least the ability to do so um it like it really ends up mimicking a lot what we actually the exact same thing that we see in Bitcoin right now um I mean it's two sides of the same coin it's like pretty much the same conversation of like

should we you know adding ZK account to Celestia has the same conversation of like upat and CTV and all these different things on bitcoin it's like it's the same idea of like we have really minimal L1 and we want to get this asset BTC like up to these rups in a trust minimized matter what do we need to do what is the minimal functionality to get the L1 to be able to verify something that's happening off chain um and so we're all building the same thing it's ending up in the same place increase bandwidth redy and ZK um yeah yeah I I mean amazing uh a few a few things one is like um you know we're not really building the same thing because every time I talk to this lot of people they they say what you said in your first point which is like oh well the only da

is a commodity the only valuable thing uh is like Priority Access to State me blah BL all these things like Sani you know I hear that from him like literally all the time and um I believe that that belongs to the applications does not belong in the L1 and then it's silly to try to try to own that long term like the smart move is to go where the puck is going and realize like that value belongs to the people who are using that state or like creating that state like salana doesn't own like if everyone's trying to like trade on radium like it's radium and the community that they've built and the liquidity that they've built that is

what is like valuable and where that me and Priority Access is like coming from and none of that necessarily needs to exist on the L1 and if it's if the incentives are there and it's possible they're going to want to capture that for themselves so like I just feel that like one way or another that stuff like exits L1 uh and now and then and then and and and so I think they're building with that assumption and like Celestia is like you know we're we're we're past that like we're looking way way way down the line for like the long longterm endgame and then then the second then the second question becomes what your second point was is Da a commodity or not right and I strongly believe that

it's not a commodity I mean even just like like if you step back for a second and you think about like like to me the like for I think people think of data availability maybe because the way it was marketed as like some sidecar thing that's not actually essential to chains but a DA and consensus layer like ethereum or like Celestia is the same thing as an L1 with smart contract except instead of instead of having smart contracts those those smart contracts are now rollups and instead of having a ton yeah you you don't have this Atomic composability but you have this trust minimized composability which I think is actually more important in the long run than Atomic synchronous composability and if you if you stray

from that security Zone that is in this that this shared da and consensus layer uniquely provides you lose that that like zone of security you lose that ability that privileged access to interoperate with those chains or those applications like let's just stop even like distinguishing between a smart contract and a rollup they're just applications right it's application and security models and like those those when you think when you look at it that way those those two models are identical and yet no one no one like thinks about like oh well why would I build on ethereum versus on you know some other ethereum copycat it's like oh because all the other applications are there like that's where all the security is and that's where that's like the ecosystem that I want to be adjacent to

right and so um like it it very much has Network effects at that level then when you when you and then when you bundle things like lazy bridging with that just inherent sort of like technical Foundation of like you need to be on a shared consensus in da layer for this privilege interop and then it starts to become even more and more sticky uh and then a network effect becomes even stronger because it's not just like oh the base I you know wherever I post my data it's like I'm literally like routing my liquidity and like sort of like accessing all my liquidity and like that's that's like where I that's my entry point to everything else um and then there's another side of it of why I think that da is not a commodity which is uh light nodes and just verifiability itself there's two

angles to this one is that the whole why is it that we can even build this blockchain that has 27 megabytes per second of data throughput which is absolutely mental and not call it just a Amazon you know you know just like S3 instance like is because it's because there's data availity sampling but the only way that data availity sampling works at scale is if there's enough people running these light nodes for the like trust assumptions to to work out and so part like in parallel to and actually we should have mentioned this earlier but like if we were to try to get to 27 megabyte like the the mammoth like uh throughput we're going to need a ton of light nodes rolled out like

actually have a truly decentralized Network that is like actually making this whole thing secure and and not just some centralized like thing that the Bitcoin big you know Big Block debate people would just like laugh at and be like you call this a blockchain this is like this is [ __ ] it's like a 100 nodes like you know and and no one no one has any ability to verify this thing there's 5,000 nodes in India yeah you're Mumbai is really holding holding it down for us um but anyway my point is and and like it takes like okay so how do you actually get those light nodes the light node quote build out is like integrate well we're working that's another part of our road map making it extremely easy to embed the light node into wallets and applications directly so like in pay you will have a

light node actually running in the background verifying everything right and that's it's also your again to show it a little bit more like you don't need an RPC like you're actually just it's like a truly peer-to-peer app I should have mentioned that it's part of this Unstoppable thing you don't have middlemen and intermediaries it's like it's actually what blockchains were supposed to be like that's what like you know bitcoiners used to all run some of them still do run full nodes ethereum Miss browser was like a a full node that and you synced every everything and that's how you interacted with the chain and then you know then we went down the path of infura because like it was convenient and like there was no actual way to scale that like Celestia brings us back to that original Vision anyway the light note buildout is crucial and

that is something that you just fundamentally can't Fork you can't just be like Oh I'm I'm you know forking and I'm going to BU like now my light note is going to be integrated and deployed in all these applications and front ends and browsers and whatever like they're they're running a different protocol so you're not just they're not going to oh now I'm going to run two nodes and even even like and that's also like a user distribution network of like I'm a user also like it might be possible that like the you know the user is not going to run a light a separate Celestia light node every for every application it could be like one light node on your phone that's maybe embedded there and through that you're verifying all these different apps that you're using so anyway it's like that is something that

is like so fundamentally sticky in my mind and um and again also if you forked and you want to have crazy throughput you don't you know now your chain is just centralized AWS yeah so like these two things run in parallel and like anyway it's just like so clear to me da is not a commodity I just wish everyone would shut up I think a couple points to add on to that so I think it's I think it's fair to say that a sufficiently decentralized data availability block or F A blockchain focused on data avail and consensus that is minimalistic um and has a sufficient set of light nodes and actual validators also which has interoperability baked in Via ZK accounts is not a commodity for

all reasons that you said now I think that where that comes from is from more is from systems that look more like data availability committees and so I think that data availability committees are much more ripe to be commoditized because they don't have these effects and also like designs that look like that are also more ripe to be commoditized I don't know if you had something to add there you look like you were jumping on oh yeah no I was going to say I I think that actually ties in well of I I think a lot of the debate of is Da commodity um I like I in some meaningful sense do agree with it because I think it comes down to like effectively a semantic debate of what do we talk about of I I think in some meaningful sense da like raw da is a

commodity and that like if what am I willing to pay these 100 nodes to provide me da versus all else equal it's literally the say it's literally the same hundred validators running this thing yeah to me that's like no difference if you are taking that on its own for example the example of like something like Eclipse um where effectively Celestia is primarily just effectively acting like a data availability committee to them um where that is like they are not just a native rup but there that is trying to mostly mostly trustless interrupt with a bunch of other Celestial rollups they are primarily an ethereum L2 that is like using an offchain da to to From ethereum l1's perspective like Celestia 1 versus Celestia 2 like they're the same thing it's it's another committee that's

telling them this thing um so in in that kind of like literal sense da on its own is a commodity um to them like there really is no difference if someone up spun up celesa 2 they' probably go use the thing if it was cheaper um it's it's the other things that kind of get bundled with it that make it not a commodity like in some sense I think raw da is a commodity and I think like uh shared coordination is not a commodity and like and like that is what you actually end up getting concretely with you know if I'm using Celestia as a rollup where you know the the sequencing and the coordination and the bridging and is all of that is done through here then to me that's not a commodity because if I go to Celestia 2 over there then I don't get that anymore

um so it depends on kind of the use case and what you are actually using it for um ends up being like whether this thing is funable or not so I strongly agree with that take and but the way that I would frame it is slightly different that um so every rollup has to choose its home like what is it security Zone that it cares about and wants to be home and and um for for eclipse in some ways like it is basically ethereum like they are settling to ethereum like that is their quote home and so and anything any da source that is external to that is a commodity so offchain da or alt da from the ethereum you know roll up or L2 view

is a commodity so it but like rollups that choose for for example Celestia as their home is not a commodity to them in the same way that ethereum da is not a commodity to these ethereum rollups that's why like arbitrum I don't think they're ever going to use alt da no because they're just like they're not willing to compromise there is no there is no second best there is only ethereum da for those rollups and like in in in Celestia the there is a uh unique ecosystem that is emerging for which they feel the same way about Celestia da and that is really like what matters um you know and that's why like Igan da or any trust or these things

that that only aim to be this offchain da product uh are Commodities and just not interesting like I I don't even well they provide a service to the market a very cheap high throughput data yes for for the specific well they don't really do that yet um any trust does any trust does yes yes um but like you know again they're they're they're providing a sort of like is offchain Da and it's just and it is by almost by definition to me like a a commodity it is less secure than a Celestia um but there's the the orbit chains use any trust because it's native

to arbitrum it's like an alignment thing yeah I think it's also just cheap and super scalable like you know and it works um just more than you can say about other uh da Solutions um but the uh I will say there is actually there is actually some um the op is not fully a commodity like and actually this actually brings us to the daat dashboard which which talk about it yeah uh really stoked because I was talking to the l2b guys like a year ago in in Istanbul and I was like you know you guys should think about doing a DA uh sort of like dashboard uh and and they built it they did like went through a lot of iterations of different like Risk Frameworks and things like that I think

they arrived at a really good product um and I think it's so important because like da is such a you know difficult subject to actually reason about for the average user and um anyway well the da dashboard is basically oriented around like ethereum like you know what is data availability what are these data alt da options what is their security from like an ethereum Centric View and the cool thing is that like they're very much not a commodity in the sense of like you you have to worry about how much value is staked and how much value is like securing those bridges because if there's like more value secured than is Stak you know you start to kind of have

this imbalance where like there it's becomes profitable to attack um there's things like how secure is there fraud detection so like data availity sampling which Celestia has and like you know any TR or a does not have um there are things like you know how secure is the the committee how secure is the the of the bridge relay failures relayer failures verifiability and well no the the last one is um basically like a delay like upgrades and like like how is upgrade to the bridge like managed and so anyway like those are all the I think those are the the most important things to keep in mind and I think even within that if you look at the da dashboard like there's no sort of like like

Celestia is by far the the leader even for op chain da um so there is no second best right now I put out that twet I was like it's going to be interesting to see what this looks like in six months yeah because you know veale will have rollups I day will have rollups and you know Celestia will go through its upgrades and it'll start to get more green on that it's it's going to be I'm stoked for that dashboard it's going to be like the l2b of Da I mean it's it that's literally what it is I mean sort of but again like it's it's the L2 be of right so it doesn't really tell the full picture of like what really matters to me which again is the native ecosystem yeah so we had this podcast just kind of close out uh back on kind

of like the Tia valuation and thinking about how to how to Value Tia we had this podcast with Justin Drake and asked him about ethereum valuation which I'm I'm sure that either you guys watched or have heard a lot and we thought we we got to the end game of like where ethereum is GNA generate a ton of value and it's somewhat similar to Celestia's endgame in terms of like a ton of rollups using ethereum for da charging a small fee at at like a 100 million TPS future environment and ethereum generates something like like I don't know some billions of dollars over a year right which uh may or may not justify a multi hundred billion or trillion dollar valuation and so the's like well we kind of have to get some

store value monetary premium into this or else how are we going to reach you know 1 trillion 2 trillion three trillion and so like from the from the lens of Tia knowing that we're trying to scale to one gigabyte blocks um and basically have an A economy of scale operating with full blocks at one gigabyte um what is the what is the difference between in that future the the mental model of fees and revenue for for Tia the token in for the Tia ecosystem versus like Tia as an entrenched money monetary premium asset how are how are we kind of like positing these two uh sides of of the coin for TI of the asset and John I think you first

I mean I think the really short answer is none of us honestly know I I think we can all take like I I think we can have some reasonable degrees of confidence ideas about like what we think is going to happen but honestly none of us know I I think it's the really short answer um I I I still find it challenging to at least assess at any high probability for any of these things that will that they will end up with enough you know revenue or whatever we want to call it fees generated to justify these types of you know hundred billion trillion dollar valuations I I think that is incredibly unlikely for most if not all protocols um that exist um and so that ends up in that scenario of you know if if if this

thing is going to be valued it probably ends up looking like some you know non-sovereign store value type thing which is you know exactly what Bitcoin ethereum they're all trying to do which is I mean theor theoretically there is no limit to like what this thing could be worth um I it's it's certainly possible in the long run you know certainly like the biggest protocol you know if one thing like whether it's ethereum celest Celestia Salon whatever you know let's say that thing like really is the thing and it's hosting most of crypto on it it's certainly foreseeable like that thing is going to generate a [ __ ] ton of Revenue that it will be in the many billions of dollars of um per year um but that that world even if that does happen I I think has a lot a lot of embedded assumptions is

very very like orders of magnitude far away from where we are actually right now because if you look at where we are like actually right now is ethereum and solar like they're the two most like profitable things and I mean they're they're running it like currently a run rate of like we'll call it like a billion dollars a year of like real economic value like a mix of like fees and that are happening right now um and really most of that I would say is a byproduct of what we were talking about before like frankly these systems are just inefficient and a lot of that is leaking to the base layer that just like shouldn't be leaking there so especially once you bake in these assumptions of like okay you know 90% of that value that's going to them right now like most of that's going to start going back to

the apps you know even the marginal amount of congestion that these things are charging for even for da that's mostly going to go away because there's going to be Celestia they're going to scale even more there's going to be Veil there's going to be da like the minimal Baseline cost of these things should get driven down a lot um so you're going to need some insane scale if tldr you are um and like reasoning about these like orders of magnitude outcomes I think is like actually impossible um and so what what we can empirically say is you know Bitcoin is worth a lot because people really want a non-sovereign store value and I I think that there's like a very reasonable fight for you know there might be a handful of those types of assets in the long run um and the other ones if if there are other non-sovereign

store value crypto assets it's like that like a meaningful scale they're probably going to be you know what are the base assets of the largest most successful protocols whether that's you know the base layer for all the rollups if we end up in that world or you know the largest like more integrated chains if we end up with a handful of integrated Chains It's it's probably going to be the base asset of like those dominant platforms I don't really know either but they're I mean right now there's more than a handful like swe you got to be joking it's got ton of monetary premium there's no fees there's no tokens there's no Revenue yeah but that's a sign of the times isn't it yeah yeah yeah I I'll call that more speculative or meme premium than monetary premium but but meme meme coins are an interesting example right like

and and like people say mem coins don't have any fundamentals like they do have fundamentals like it's just it because like this is a social technology and like you know building a community of people who believe in your coin like as a meme that's literally like Bitcoin is just a meme coin like it is a meme coin and I don't mean that in a derogatory way at all they have had just the most successful meme which is the digital gold and they have an amazing like you know origin story with this Satoshi you know and they're the they're the original like Bitcoin is synonymous with cryptocurrency and with this whole Movement Like A lot of people don't even know like I say oh I work in crypto or whatever or blockchain they're like I don't know is that like Bitcoin and I'm like yeah it's you work for Bitcoin no

but I just I'm I'm obviously very bullish on bitcoin it's a good mem and anyway so like yeah just to touch back on um John's points I think totally agree in terms of like there will be mon like monetary assets and like non-sovereign store value type assets um I think there's a high likelihood that those will correlate strongly with the uh the protocols that get the most usage in adoption uh I think there's just you know kind of maybe it's a maybe it's a meme or or maybe there's a more fundamental reason why those tend to start to emerge as money within those ecosystems um but I also think and and and I also think that there's on the revenue side the two

variables that matter to me which are which are very clearly unknown as of right now are the total demand to transact on chain like how much da demand will there be and the second one is how strong are the network effects around like these da like these l1s the da consensus layers and because that determines the that determines the pricing power right however strong that is is like how how high can the fees be before people are like okay peace out I'm like this is this is ridiculous you know what I mean like what which we've seen on on ethereum before I tend I tend to be very bullish on the da demand I think it's going to

be absolutely massive I feel like we're in the like late 90s uh equivalent in in the internet and like we just haven't seen anything like there are no like there's no users because there's no applications but like there they will there will be things like pay like we're going to reach a point where it's like that's no longer going to be a question and I think they like if you really have internet scale use of blockchains we have I don't know AI agents whatever your thesis is like there's going to be a lot of demand like I I'm just extremely bullish like on the total aggregate demand and then I'm obviously for the reasons I mentioned earlier I think there's very strong Network effects around these l1s that will give them some pricing power where that is I don't know specifically but I think I land at a place that's

much higher than the average person and then when you put those two things together like that's a absolutely massive amount of Revenue and so I I think that that's a very possible that that could be true is my position and I think um you know in terms of yeah I'll just stop there yeah yeah I think that um most of these non Sovereign store values will also grow to have this this like strong Revenue that keeps like the fundamental you know there's there's going to always be people who value these assets based on their fundamental cash flows their their their revenues and so there'll be these similar to how eth and soul have that right now and it's growing like similar for Tia you'll

have both sides to the it's just a matter of like what is the speculative premium or the mimetic premium and what is like the actual backed by fundamentals or Revenue premium so it's going to be interesting to see and I I apologize for the very predictive long-term questions but thank you for taking a SA it and uh we had a great conversation about just the last year of Celestia the growth of da um the Celestia ecosystem valuations and more so guys thank you so much for for joining cheers