Celestia (TIA) Hits New High Following Collaboration Announcement with Polygon

Celestia has been making waves recently, even before announcing its integration with Polygon's layer-2 development toolkit.

Celestia (TIA) Hits New High Following Collaboration Announcement with Polygon

In a statement on the evening of December 12, Celestia revealed its plan to integrate its data layer with Polygon Labs' layer-2 development toolkit.

This collaboration opens up access to data for layer-2 projects using Polygon's CDK, including OKX, Immutable, Astar, IDEX, Palm Network, and many others. Their goal is to enhance transaction fees for these projects, aiming to create an interoperable layer-2 ecosystem within Polygon 2.0.

Layer-2 solutions built on Polygon's CDK utilize zero-knowledge rollup technology. Simply put, they aggregate off-chain transactions and sequentially finalize them on the mainnet. However, these chains typically require data availability checks to ensure all network participants can securely access and verify stored data off-chain.

One of the challenges Ethereum, the platform these chains often rely on, faces is the lack of a dedicated execution environment for their layer-2 DA chains. Therefore, Ethereum nodes must process and store data on the main chain, leading to increased gas fees for layer-2 operations. This is where Data Availability solutions need to be promoted, with Celestia being one of them.

Celestia can provide storage bandwidth for multiple layer-2s simultaneously. Through a light node network, the project can verify DA without burdening the entire network.

Sandeep Nailwal, co-founder of Polygon, elaborated:

"Combined with Polygon 2.0's liquidity and interoperability, Celestia's superior solution will simplify the creation of new layer-2s and make transaction fees affordable, akin to deploying a smart contract."

Following the partnership announcement, the price of TIA continued its strong uptrend of several days, reaching a new high of $13.12, but currently correcting back to around $11.6 at the time of writing.

Chart of TIA/USDT pair on Binance at 09:12 AM on December 13, 2023

The price began its ascent from $10.36 when Polygon teased "modular" on X (Twitter).

Compared to its listing on Binance six weeks ago, TIA has surged over 470%, with a fully diluted valuation (FDV) reaching $12.1 billion as only 15% of the total token supply is currently circulating, according to CoinMarketCap.

The main distinction between Celestia and traditional layer-1 blockchains like Ethereum and Solana is its development focus as a modular network. In October 2022, Celestia Labs successfully raised $55 million, valuing it at over $1 billion.