Thread by @ptrwtts

Despite closely following the modular blockchain meme since @epolynya's earliest tweets, I only just wrapped my head around @CelestiaOrg and what can be built with it.

I'm no expert, and may be off in places, but figured I would share my notes in case they are helpful...

My preference is to break the modular stack into 4 layers:

1. Data Availability - Ensuring tx data is broadly available
2. Consensus - Determining the sequencing of txs
3. Settlement - Enforcing the global state
4. Execution - Applying individual state transitions

Data Availability + Consensus = the “security” of a chain. Both need to be strong.

Settlement + Execution = the "environment" of a chain. Execution layers with the same settlement layer can form a trust-minimized “cluster” (blog.celestia.org/clusters/)

With this framing, let’s first quickly recap the Ethereum-centric stacks that have emerged:

1. Monolith

The OG. Just do everything on Ethereum. While this gives you maximum security and simplicity, it comes with high costs and limited scalability.

2. Rollup

The original breakthrough in modular scaling. Create a separate execution layer that anchors back to Ethereum for settlement. Can be done using fraud (Optimistic) or validity (ZK) proofs.

3. Validium

A modification to rollups that moves Data Availability off Ethereum. This increases scalability, at the expense of security. There are different flavors (Data Availability Committees, Guardians, etc), with different trade-offs, but all lower security than a rollup

Enter Celestia, a new blockchain that is explicitly optimized to be part of a modular stack, by focusing purely on Data Availability and Consensus.

After reviewing the blog and forum posts, there seem to be 3 main variants that have been proposed so far:

1. “Sovereign Rollup”

The originally proposed model for leveraging Celestia is with a single execution layer on top. In this design, an operator "rolls up" transactions and publishes them to Celestia. But wait, where does the settlement happen if Celestia has no execution?

It turns out that separate settlement layer is not actually required. You only need it if you want trust-minimized bridging between layers, which is very relevant to Ethereum L2s, but not to a "sovereign" chain, which can do fraud or validity proving internally.

This piece tripped me up at first, because my only experience was with Ethereum L2s, where "rolling up" is always combined with "settlement". But rollups can also be useful in the context of a standalone chain. For example, this is essentially what Mina does (h/t @likebeckett)

2. "Settlement Rollup"

This led to the design of "Cevmos", a specialized Settlement chain on top of Celestia, that other Execution chains can anchor to as part of a single trust-minimized "cluster". forum.celestia.org/t/an-open-modu…

While this enables trust-minimized bridging between Celestia chains, it will be brand new cluster that is isolated from Ethereum, so remains to be seen if it can gain adoption.

Which brings us to the 3rd and final design:

3. Celestium

The latest design is to use Celestia for Data Availability and Ethereum for Consensus and Settlment. In other words, a Celestia-backed Validium.

blog.celestia.org/celestiums/

On the one hand, Celestiums could be one of the most secure and cost effective Validium designs you can get. On the other hand, it's still a Validium.

With EIP-4844 estimated to arrive in late 2022, it's unclear if Validiums will be worth the trade-offs eip4844.com

And that's it. By no means is this meant to a comprehensive overview of modular scaling approaches on either Ethereum or Celestia. But laying everything out in a single chart really helped things click for me!

You can read the unrolled version of this thread here: typefully.com/ptrwtts/9OchbmS