Author: IOSG Ventures

Background

Two years ago, at the beginning of the rise of modular blockchain narratives, we wrote about our views and predictions on the data availability track. As expected, the narrative of modular blockchain has prevailed and driven infrastructure innovation, enhanced network interoperability, and promoted more cooperation and integration within the ecosystem. Various Rollup as a Service (RaaS) solutions (Altlayer, Caldera, Conduit, Gelato) have begun to emerge. The following figure shows the interface of the Rollup development tool Conduit, demonstrating that deploying Rollup and selecting the DA solution has become exceptionally simple and convenient.

Source: Conduit

In the past two years, alternative DA solutions such as Celestia, EigenDA, Avail, NearDA, etc. have made significant progress, each demonstrating unique technical advantages and market shares. At the same time, with the launch of Ethereum EIP-4844, which replaces calldata with blobs, the cost of using Rollup in the native DA layer of Ethereum has been greatly reduced. Nowadays, developers and project parties face more trade-offs when choosing the data availability layer. This article will track and analyze existing DA solutions, delve into their performance costs, technical characteristics, and market performance, and present our views and thoughts on the future development of the DA track.

1. Current usage of the DA scheme

Rollup solutions using Ethereum's native DA on-chain mainly focus on mainstream Layer 2 solutions that have transitioned from calldata storage to Blob-compatible, including Arbitrum, Optimism, Base, as well as Starknet, zkSync, and Scroll. By utilizing Ethereum as the DA layer, Rollup ensures that data is verified and stored by Ethereum's full nodes, benefiting from Ethereum's security, decentralization, protocol upgrade continuity, and economic incentives. Comprehensive L2 solutions play a crucial role in Ethereum's ecosystem, requiring the aforementioned legitimacy brought by native DA as a core differentiator. (Vitalik believes that the core of rollup is unconditional security guarantee: even if everyone is against you, you can still withdraw your assets. If data availability depends on external systems, this equivalent security cannot be achieved.)

However, publishing data to the Ethereum mainnet comes with high costs, especially before EIP-4844 (where calldata costs 16 gas per byte, and by December 2023, L2 has already spent over 15,000 ETH on DA costs). Therefore, various Alt-DA off-chain solutions have emerged, such as Celestia, EigenDA, and the upcoming Avail, which reduce the costs of data storage and transmission through different technologies, such as DAS, erasure coding, KZG commitments, etc.

Among them, Celestia, as a modular blockchain specifically for DA, has become the leading project in the DA field after its mainnet launch in October 2023. Its main target customers include projects requiring modular architecture: cross-chain bridges, settlement layer solutions, defi projects, games, sorters, and not limited to Layer 2 solutions in the Ethereum ecosystem. Its existing clients include Omnichain DEX protocol Orderly, modular L2 Manta Pacific customized for EVM-native ZK applications, Base-based L3 Hokum, and DEX Lyra and Aevo focusing on derivatives trading. As a modular design DA layer pioneer not limited to a specific ecosystem, Celestia's advantages make it the preferred choice for many emerging Layer 2 projects.

EigenDA is developed by EigenLabs, using EigenLayer's restaking mechanism to provide an efficient, secure, and scalable DA service solution, to a certain extent inheriting the security and massive validator network of the Ethereum Mainnet. EigenDA focuses on providing high-performance DA solutions for the Ethereum ecosystem. As the first Active Validation Service (AVS) on Eigenlayer, EigenDA was launched in April along with the Eigenlay Mainnet. The existing customer base is equally diverse, including Ethereum L2 Swell, Celo, Mantle Network, and several other AVS built on Eigenlayer, such as decentralized computing stack Versatus, Polymer, DEX protocol DODO, and Social L2 CyberConnect.

Source: EigenDA

2. Trade-offs between native DA (EIP-4844) and existing Alt-DA 2.1 Ethereum native DA

A brief review of the development and changes of Ethereum's native DA solution. Before the Cancun upgrade, Rollup mainly used calldata as the means of data storage and transmission. Due to permanent storage and high network congestion, high costs have become the main obstacle to expansion and adoption. As a mainnet upgrade, EIP-4844 introduces Blob as a new data structure, which can accommodate large-capacity data, but correspondingly increase the storage burden of nodes. As time goes by, the storage requirements will continue to increase, which may eventually lead to high hardware requirements for running nodes and harm decentralization. Therefore, Blobs will only be stored for about 18 days (4096 epochs) before being deleted.

Due to the temporary storage and separate fee market of Blobs, after the implementation of EIP-4844, the average daily DA cost for the 60 days before and after the adoption of blobs in major L2s (30 days for Scroll&Starknet) has decreased by about 99%. Among them, due to the different types of uploaded data (transaction data or state differences), the cost reduction of Layer2 using OP rollup is more pronounced compared to Zk Rollup.

Source: Dune& Growthepie

EIP-4844 Blob capacity and storage features and pricing mechanism

Blob's capacity and storage characteristics:

• Each Block can accommodate up to 6 Blobs
• Each Blob can store up to 128KB of data (even if not fully utilizing 128KB space, the sender still needs to pay the full Blob fee)

The new blob gas market operates similar to EIP-1559, adjusting the basic fee of the blob according to supply and demand changes:

• If there are more blob quantities in the block than the target (currently 3), increase the basic fee of the blob.
• If the number of blobs in the block is less than the target, reduce the basic fee for blobs.

Source: IOSG Ventures

Source: Dune / Ethereum blockchain blobs number 3-day moving average

L2 mainly uses the newly introduced type 3 transactions, adding the max_fee_per_blob_gas and blob_versioned_hashes fields on the basis of previous transactions, representing the maximum fee per blob gas that the user is willing to pay and the hash output list of kzg_to_versioned_hash.

This new pricing mechanism means that type 3 transactions still require the max_fee_per_gas and max_priority_fee_per_gas fields, and are subject to the constraints of the existing EIP-1559 market. In addition to the blob space, type 3 transactions still need to pay for the EVM space they use.

Therefore, blobs still face contention for block space, causing cost uncertainty, as the blob space in each block is limited, and the blob's gas fee market adjusts dynamically based on demand.

Therefore, as a general-purpose chain, the shortcoming of Ethereum lies in the uncertainty of block space - the sudden emergence of on-chain activities such as NFT Minting and airdrop claims may cause congestion on the chain, which will increase the pricing of Blob and make it difficult for Rollup to estimate the cost basis. This will result in uncertain budgeting for Rollup expenses, leading to unstable profit margins and raising barriers to entry for new projects that are still in their early stages. Project teams find it difficult to determine whether Ethereum DA can be a long-term solution. In the graph below, using blob is cheaper than using calldata by about 98% for most of the time, but in a certain period shown in the graph, using Blobs is only 59% cheaper than using Calldata.

Source: Ethernow

We calculate the cost of transferring blobs twice as an example:

Source: Ethernow

In the figure is a type 3 transaction of Zksync's Validator Timelock in a certain block on March 28, 2024. Based on the blob cost, let's calculate its data cost by decomposing the base fee and priority fee.

Assuming the price of Ethereum is $3600, the cost of using 1Mib blob data at that time is roughly:

4×0.018ETH×3600USD/ETH = 259.2USD

Let's take a type 3 transaction of a zksync era on June 24 again:

Source: Ethernow

At that time, the activity on the Mainnet slightly decreased, let's break down the data cost:

The cost of using 1Mib blob of data at that time was approximately:

4×0.0021ETH×3600USD/ETH = 30.24USD

It can be seen that the cost uncertainty of using blobs to transmit data is still relatively high. However, for a rollup, the stability of cost structure is one of the key considerations when choosing the DA scheme.

2.2 Celestia

As the pioneer of modular blockchain, Celestia focuses on providing DA layer and consensus layer, separating the execution layer to specifically optimize DA functionality, improve efficiency and scalability. Compared to using Ethereum on-chain methods, Celestia as an off-chain solution L1 has many different technical characteristics, reducing the cost of data availability and providing higher flexibility and scalability. The modular design makes Celestia highly flexible, allowing developers to freely choose the execution environment, not limited to a specific virtual machine (VM), enabling Celestia to support various application scenarios and meet diverse needs.

To integrate Celestia as the DA layer, Rollup needs to submit the transaction data (Data Blob) generated by the execution layer to the Celestia network instead of the original Layer 1 (Ethereum) to ensure data availability for validation and transactions. Celestia's Data Availability Sampling (DAS) technology re-encodes block data using a two-dimensional RS erasure coding scheme, allowing light nodes to verify data availability through multiple rounds of random sampling with only a small portion of the block data. It also enables multiple nodes to process different data parts in parallel, thereby improving overall efficiency.

Source: Celestia.org

Another key technology introduced by Celestia in the process is the Namespace Merkle Trees (NMTs), which enables different rollups to download only transaction data relevant to themselves, thereby improving data processing efficiency. NMTs not only reduce data redundancy and improve system performance, but also provide developers with more efficient ways of data processing.

In terms of security, Celestia is based on the Tendermint consensus mechanism, where validators reach consensus on the Data Blob to ensure the availability and consistency of data in the network. It can tolerate up to one-third of validators' nodes failing or behaving maliciously. By staking TIA tokens, Celestia's validators are economically incentivized to ensure honest behavior and to penalize malicious behavior or improper operations, thereby ensuring network security. Currently, Celestia has a TVL of approximately $6.44 billion and 100 full nodes.

In terms of scalability, Celestia's block size can be dynamically adjusted according to the number of active light nodes in the network. With more nodes joining, Celestia can safely increase the block size, theoretically increasing throughput and scalability indefinitely. Current data shows that its data throughput is about 6.67 MB/s.

For cost comparison, we will briefly discuss the performance and pricing mechanism of Celestia. When users submit data on Celestia, it is done through Blob transactions (BlobTx), which incur fees in the form of blob space fees and gas fees.

Specifically, the maximum size limit of each Blob is slightly less than 2 MiB (1,973,786 bytes), and each block can contain multiple Blobs, with the specific quantity depending on the total size limit of the block. The current maximum block size is 64x64 shares (about 2 MiB), with a total of 4096 shares, of which one share is reserved for PFB (PayForBlobs) transactions, and the remaining 4095 shares are used for data storage. Celestia's fee market is similar to Ethereum's EIP-1559 mechanism, using a priority mempool based on gas prices. Transactions with higher fees will be processed by validators with priority, and the fees consist of a fixed fee per transaction and a variable fee based on the size of each Blob.

According to the rollup data synthesized on celenium (June 17th), for each integrated Celestia client, the cost of using Celestia's DA is between 0.02-0.25 Tia/Mib, equivalent to the price of $TIA on June 17th ($7.26), and the DA cost of several major clients ranges from $0.15 to $1.82/MiB. Therefore, compared with the native DA on the Ethereum chain, Celestia provides a competitive and stable cost structure.

Source: Celenium

Source:Celenium，gas price stable at 0.015UTIA or so (1 uTIA = TIA × 10 − 6)

However, Celestia itself is a Layer1 blockchain network that requires P2P network to broadcast and reach consensus on Data Blob. Although light nodes can use DAS to ensure data availability, the network still has high requirements for its full nodes (128 MB/s download and 12.5 MB/s upload), which creates obstacles for decentralization and future throughput improvement. In contrast, EigenDA adopts a different architecture - no consensus is needed and no P2P network is required.

2.3 EigenDA

As an active validation service (AVS) built using EigenLayer, EigenDA ensures data availability by leveraging Ethereum's security through a re-staking mechanism (without the need to introduce a new set of validators, Ethereum validators can freely choose to join, and EigenDA's re-staking nodes are a subset of Ethereum nodes), directly utilizing existing infrastructure. The main workflow is as follows: the Rollup sequencer generates Blob Data and sends it to the Disperser (which can be run by the rollup itself or through a third party, such as EigenLabs). The Disperser shards the Blob Data, generates erasure coding and KZG commitments, and then publishes them to EigenDA nodes, which then verify the Attestation and ensure data availability. After verification, the nodes must store the data and send the digital signature back to the Disperser. Finally, the Disperser collects the signatures and uploads them to the EigenDA smart contract on the Ethereum mainnet for final aggregate signature correctness verification.

The core idea is still to reduce the data storage and validation computing power required for nodes using technology. However, EigenDA chose the KZG commitment verification technology consistent with the Ethereum upgrade to achieve this. In addition, EigenDA does not rely on consensus protocols and P2P dissemination, but uses unicast to further improve consensus speed.

For ensuring that the EigenDA node actually stores the data available, EigenDA uses the Proof of Custody method. If any issue arises, anyone can submit proof to the EigenDA smart contract, which will be verified by the smart contract. If the verification is successful, the lazy validator will be Slashed.

Therefore, the solution process of EigenDA is all conducted on Ethereum, which provides consensus guarantee, so it is not limited by the bottleneck of consensus protocol and P2P network low throughput. Nodes do not need to wait for sequential ordering and can directly parallel process data availability proof, greatly improving network efficiency.

Source: Eigenlayer

EigenDA's capacity performance and cost:

The current number of EigenDA node operators is 266. Its maximum throughput target is 10Mbps. According to the average data of the past 7 days, EigenDA's data throughput is 0.685Mib/s, and the data storage and transmission cost is approximately 0.001Gas/Byte. Assuming the gas cost is 10gwei and the Ethereum price is $3600, the cost of 1MB of data is about $0.038. The total staked TVL is 3.33M ETH, close to 1.2 billion dollars.

Source:EigenDA.xyz

Comparative Analysis of Celestia vs. EigenDA

From a technical perspective, Celestia and EigenDA have differences in multiple aspects. Firstly, in terms of node load, Celestia's full nodes need to handle broadcasting, consensus, and validation, with a download bandwidth requirement of 128MB/s and an upload bandwidth requirement of 12.5MB/s, while EigenDA's nodes do not handle broadcasting and consensus, with a bandwidth requirement of only 0.3MB/s, and they can use a subset of Ethereum nodes. Secondly, in terms of throughput, Celestia has a maximum throughput of about 6.67MB/s, while EigenDA aims to achieve a maximum of 10MB/s. In terms of security, Celestia's security comes from its network value, with a stake value of about $6.65 billion and an attack cost exceeding $4 billion. EigenDA inherits some of Ethereum's security based on the re-staked asset value and the operator's share of the mainnet, with the current TVL close to $1.2 billion, approximately inheriting 2% of Ethereum's security.

Overall, Celestia's competitive advantage lies in its flexible modular design and higher data throughput, making it more favored by small and medium-sized L2 and application chains. EigenDA's advantage lies in its use of Ethereum infrastructure, which brings legitimacy through decoupling data availability from consensus. In the future, with the development of both modularization and application chain trends, Celestia may benefit from incremental markets, while EigenDA may occupy a larger share in the Ethereum center market that requires higher security.

3.Avail and NearDA

Although Celestia and EigenDA currently dominate the data availability market, the future competitive landscape may change. With the potential launch of Avail and NearDA, the competition in the data availability field is expected to further intensify.

Avail is a blockchain network focusing on data availability, aiming to provide efficient transaction ordering and data storage services for EVM-compatible blockchains and Rollups. It adopts the BABE and GRANDPA consensus mechanisms inherited from Polkadot SDK. Avail uses KZG polynomial commitment as a validity proof, supports up to 1,000 validators through Nominated Proof of Stake (NPoS), and provides reliable backup through a unique light client P2P network sampling mechanism.

On the other hand, NearDA is a data availability solution launched by NEAR Foundation, which mainly provides DA services for ETH Rollup and Ethereum developers. Its goal is to provide a cost-effective DA solution with a degree of decentralization comparable to that of Near Protocol. It has established strategic partnerships with major participants in the Ethereum ecosystem, such as Polygon CDK, Arbitrum, Optimism, and so on.

However, in the short term, for Rollups, it is best to establish barriers more effectively by reducing marginal costs, and adjusting the revenue and cost model according to market conditions is a better solution.

4. DA for specific scenarios

In addition to the general-purpose DA for rollup mentioned above, there have also been some relatively early DA projects in the current DA track, as well as DA projects tailored for specific scenarios. For example, there is Zerogravity (0G), a high-throughput DA solution designed specifically for AI, and Nubit, a Bitcoin DA solution.

4.1Zerogravity（0G）

The demand for data availability in AI applications is different from that in traditional blockchain applications. AI model training and execution require processing a large amount of data, including model parameters, training datasets, real-time data requests, etc. These data need to be stored and transmitted quickly and reliably to ensure the efficiency and performance of AI models. However, existing general-purpose DA solutions, such as Celestia and EigenDA, are primarily designed to meet the data availability requirements of typical blockchain applications and have certain limitations in handling high-throughput, low-latency, large-scale data transmission.

ZeroGravity (0G) aims to meet the specific needs of AI applications through modular design and high-performance data transmission. Its modular design divides the data availability workflow into two channels: data publishing and data storage, allowing the system to scale linearly with the increasing number of nodes. The data storage channel focuses on large data transmission, ensuring that large data can be stored and accessed almost instantly. The data publishing channel is used to ensure data availability and is validated through an arbitration system based on the assumption of majority honesty. 0G Storage is an on-chain database composed of a network of storage nodes. Storage nodes participate in the mining process through Random Access Proofs (PoRA) to ensure data availability and integrity. It supports storing various types of AI-related data, including models, training data, user requests, and Real-time Adaptive Generation (RAG) data.

Source: 0G

0G claims that through innovative system design, its goal is to achieve on-chain data transmission of GB level per second, far exceeding other DA solutions on the market, such as Celestia and EigenDA, which only have MB-level data transmission per second. Specifically, 0G claims that its data throughput can reach 50 to 100 GB per second, which can support scenarios that require a large amount of data transmission, such as AI model training.

4.2Nubit

As the Bitcoin ecosystem gradually takes off and attracts attention, various technical routes related to Bitcoin are also emerging. With the development of these technical routes, applications such as Ordinals, Layer 2, and Oracle Machine have an increasingly urgent need for efficient and secure data availability solutions. These applications require the ability to store and transmit large amounts of data quickly and reliably to ensure their smooth operation and improve user experience. For example, Ordinals requires efficient data storage and transmission to support the creation and trading of digital artwork, Layer 2 solutions require high throughput and low latency for better scalability, and Oracle Machine requires reliable data transmission to ensure data accuracy and timeliness.

Nubit is the first native Data Availability (DA) layer project in the Bitcoin ecosystem, aiming to solve the problem of limited throughput in the Bitcoin mainnet and provide infrastructure support for the long-term development of the Bitcoin ecosystem. The workflow of Nubit includes multiple steps such as data submission, validation, broadcasting, storage, sampling, and consensus, ensuring efficient processing and high availability of data. The data submitted by users is processed by RS encoding and validated by validator nodes using the NuBFT consensus algorithm, generating KZG commitments. The validated data blocks are broadcasted to the entire network, and storage nodes are responsible for storing complete data blocks, while light clients verify the availability of data through the Data Availability Sampling (DAS) protocol. Even in the event of network failures, nodes can still recover data through full storage nodes and KZG commitments on the Bitcoin network.

Nubit aims to provide infrastructure for Bitcoin ecosystem projects. It has established partnerships with multiple projects such as Babylon, Merlin Chain, Polyhedra, etc. Nubit will reduce data storage costs. For example, in the case of increasing demand in the inscription market, Nubit can serve to significantly reduce data publishing costs on the Bitcoin Layer2, making storing and processing data on Bitcoin more affordable.

5.Closing Thoughts

Analyzing the differences of projects in the DA track, we see a series of unique technologies and market positions with the widespread adoption of these DA solutions and the differences in DA layer selection among different projects, in terms of security (including data integrity, network consensus, etc.), customizability and interoperability, performance and cost.

In the future, we believe that more App-Rollups will be launched in the market. However, although the potential market is expanding, the winner-takes-all effect is obvious in the DA track. Celestia, EigenDA, and others will occupy the main market share, leaving few opportunities for the long tail, and competition is intensifying. The current capacity is greater than the demand for Rollups. For example, after the mainnet is launched, the utilization rate of Celestia network bandwidth has been consistently below 0.1%, far below its maximum supported capacity of 46,080 MB per day. However, compared to Ethereum's current 15 Rollups and daily data volume of 700 MB, Celestia still has a lot of available space for activity.

Of course, it is not ruled out that there may be a demand for high-performance networks for high DA bandwidth in the future, or for example, the demand for AI projects. In addition, there are some relatively early DA for specific scenarios, such as Bitcoin DA, which may obtain a decent market share in segmented fields. However, DA is essentially a B2B business, and the income of DA projects is closely related to the quantity and quality of ecological projects. At this stage, we believe that there is no need for too many off-chain DA solutions in the market, unless they achieve a leap in cost and efficiency by several orders of magnitude.

Overall, at present, the supply in DA's business model is sufficient, but the development of the track is still evolving, and various solutions demonstrate different competitiveness in terms of technology and market positioning. The future development will depend on the continuous innovation of technology and the dynamic changes in market demand.

References:

The comparative study of Celestia and Eigenda: MT Capital Research D/A sector analysis