Celestia Labs, the startup behind the Celestia blockchain network, announced Wednesday that it has raised $55 million in funding led by Bain Capital Crypto and Polychain Capital to build modular architecture for deploying and scaling blockchains.
Celestia builds what it calls modular blockchain architecture that helps solve challenges inherent in rolling out blockchains at scale. Using its technology, companies can more easily deploy their own blockchains with less technical know-how at less expense.
The company raised the money in a combined Series A and Series B round with participation from Coinbase Ventures, Jump Crypto, FTX Ventures, Placeholder, Galaxy, Delphi Digital and others, as well as several angel investors.
Celestia’s modular blockchain design was developed to compete with the increasing number of established Layer 1 blockchains, such as Ethereum and Solana, which Celestia’s co-founder Mustafa Al-Bassam described as monolithic.
“Modular blockchains will define the next decade of Web3 innovation,” said Al-Bassam. “For the past decade, crypto has been bottlenecked by an endless loop of new monolithic L1 smart contract platforms, each racing to the bottom to sacrifice decentralization and security to provide cheaper transaction fees.”
In order to do this, Celestia strips down its own layer-1 blockchain and focuses on ordering transactions and making the data available. Its blockchain does not provide smart contracts or perform computations. Instead, these functions are outsourced to other blockchains or other execution environments through interoperability, which is a core component of its modularity.
The objective of this design is to allow developers to rapidly scale out their own blockchain networks and define their own data layers and virtual execution environments, this means that developers can launch their own blockchains for apps to run on in a similar way to how cloud services can launch new virtual servers.
“Web3 cannot scale within the constraints of a monolithic framework,” said Al-Bassam. “We envision a blockchain ecosystem with modular data availability layers and execution environments that all integrate together. We believe modular blockchains are the next generation of scalable blockchain architectures.”
Three different modular blockchain projects have chosen Celestia to be the data availability layer for their chains including modular rollups chain Eclipse, app development chain Constellation and modular Cosmos settlement layer dYmension.
Developers receive a number of benefits using Celestia as a base layer for deploying modular blockchains, including higher scalability, shared security for interoperability between apps and sovereignty of choice between execution environments. By providing modularity and separating execution and data layers, developers can choose their own virtual machine, such as the Ethereum Virtual Machine, Solana virtual machine, zero-knowledge roll-ups or some other compatible smart contract execution layer of their choice.