Celestia Update Details: Key Features and Enhancements

Author: pedro Source: Modular Media Translation: Shan Ouba, Golden Finance

Celestia's first major upgrade: Lemongrass.

Lemongrass introduces several key improvements and features designed to improve the functionality, security, and overall user experience of the data availability layer (DA layer). This article will analyze each new feature in depth and explain the related Celestia Improvement Proposals (CIPS) and their importance.

Lemongrass Upgrade Overview

As mentioned above, Lemongrass marks the first major upgrade of Celestia, which is scheduled to be deployed on the Arabica testnet this month, then on the Mocha testnet, and finally on the Celestia Mainnet Beta in early to mid-September.  

Lemongrass consists of 5 CIPs in total:

• CIP-6: Price Enforcement

• CIP-9: Packet Forwarding Middleware

• CIP-10: Coordinated Upgrades

• CIP-14: Interchain Accounts (ICA)

• CIP-20: Disable Blobstream Module

Now, let’s break these down and explain why they’re important:

CIP-6: Price Enforcement

CIP-6 A minimum price execution mechanism was introduced, establishing a global, consensus-enforced minimum gas price for all transactions on Celestia. This means that the community, through governance, decides the minimum amount of TIA required for each transaction (deposited denominations: 1 TIA = 1,000,000).

Don’t worry, through chain abstraction (more specifically, gas abstraction), end users won’t need to worry about any gas payments in the future (*knock on wood).  

Benefits of CIP-6

• Transaction Prioritization: Gas fees act as a bidding mechanism. When the network is congested, users willing to pay higher fees will have their transactions processed faster, ensuring that transactions deemed high value by users are included in blocks when demand is high.

• Spam Prevention:By charging a minimum fee on every transaction, the chain discourages users from sending large numbers of low-value transactions to the network. Since every transaction incurs a cost, an attacker must expend a significant amount of resources to send a large number of transactions to the network, making DDoS attacks more expensive and infeasible. In short, there is a limit to the number of transactions you can send on the network before you run out of funds to pay for gas fees.  

• Stable and Predictable Pricing:Rollups inherently allow for better predictability of transaction costs, allowing for more reliable financial planning.

• Prevention of Fee Manipulation:Since the global minimum fee is set through community governance, validators cannot undercut each other or conduct off-chain transactions, ensuring fairness.

Overall, CIP-6 ensures that both aggregators and end users benefit from stable, secure, and predictable pricing on the Celestia network.

CIP-9: Packet Forwarding Middleware

CIP-9 introduces Packet Forwarding Middleware (PFM), enhancing Celestia’s existing Inter-Blockchain Communication (IBC) protocol, in other words, improving the way Celestia communicates and shares information with other IBC chains. For those who don’t know, IBC is a protocol for trustless communication between chains, used throughout the Cosmos ecosystem, but now making its way to Ethereum and other chains through teams like Union and Polymer.  

What CIP-9 does is enhance Celestia’s existing IBC functionality by integrating Packet Forwarding Middleware (PFM). The middleware adds advanced routing and processing capabilities that improve the efficiency, reliability, and user experience of cross-chain transactions. All while maintaining token interchangeability, ensuring that tokens retain their properties across multiple chains.

Before PFM, Celestia supported basic token transfers between chains within the IBC ecosystem. After the upgrade, Celestia will support advanced multi-hop capabilities, allowing tokens to be routed through multiple chains seamlessly.

Suppose user Alice wants to swap ETH on chain A for TIA on chain B. Without PFM, she would need to manually handle each step, which is time-consuming and complicated. With PFM, she can initiate the swap and PFM handles the entire process, routing the tokens to any necessary chain. At the same time, the interchangeability of the tokens is maintained.

Let’s look at an example scenario:

• Alice wants to swap token X (ETH) on chain A for token Y (TIA) on chain B. The DEX she’s using supports both token X (ETH) and token Y (TIA), but needs to be routed through chain C (an intermediary chain) to complete the swap.

• Without PFM:The swap would require multiple manual steps, and Alice would likely need to handle each transfer individually.

• With PFM: Alice initiates a swap on the DEX, specifying token X (ETH) on chain A and token Y (TIA) on chain B, and the PFM takes care of the routing. It sends Token X (ETH) on Chain A to Chain C, and forwards Token X (ETH) on Chain C to Chain B, exchanging it for Token Y (TIA).

• From Alice’s perspective, she experiences a seamless token swap without having to worry about the underlying complexities of cross-chain transactions. She initiates the swap and receives Token Y on Chain B.  

Ultimately, CIP-9 improves the efficiency of cross-chain transactions, enabling developers to build more advanced and efficient cross-chain dApps, while end users enjoy a smoother and more seamless cross-chain experience.

CIP-10: Coordinated Upgrades

This one is a little easier to understand. CIP-10 introduces a new way to coordinate upgrades to the Celestia network, ensuring a smoother transition between different versions of the network software.

First, a word about how a Celestia hard fork (upgrade) is handled.  

Essentially, you need coordination between the Celestia Labs team and Celestia validators “to understand what they need to do to prepare for the upcoming hard fork” (download new software or upgrade your node).  

After this Lemongrass upgrade, or any major upgrade in the future, the old Celestia network will no longer be compatible with the new network, which is why validator coordination is so important.  

So how do Celestia validators know when to upgrade, or when an upgrade has already happened? This is essentially what CIPs are for.  

Previously, upgrades were handled by setting a specific block height at which the upgrade would occur - e.g. "At block #1,000,000, every validator must upgrade their node in order to continue producing blocks for the chain". Validators had to manually update their nodes based on this block height, which could cause issues if not coordinated properly.

This is what we will see after the Lemongrass upgrade.  

After the Lemongrass upgrade, or once CIP-10 is formally integrated into Celestia, future upgrades will use an on-chain signaling system by which validators can signal their readiness. Specifically, once 5/6 of the total voting power (~83.33%) signal readiness for a new proposed version, the network is considered ready to upgrade.  

Network upgrades can be complex and risky. This new upgrade protocol will ensure that a sufficient number of validators are ready before transitioning to the new version of the network, minimizing the risk of disruption and network outages.  

CIP-14: Cross-chain Accounts

CIP-14 introduces cross-chain accounts to Celestia, enabling one chain to control accounts on another chain through IBC. This is one of the features that many in the community are excited about, as it plays a big role in one of TIA’s biggest use cases, liquidity staking.  

How ICA Works:

There are two main players to keep in mind:

• Control Chain:The chain that creates and manages accounts on another chain. It sends commands to the main chain (e.g. Celestia, which acts as the control chain).

• Mainchain:The chain where accounts reside, managed by the control chain, and executes commands received from the control chain (such as Stride).

As the mainchain, Celestia can control which messages the ICA can execute using a "allow list". While ICAs have broad flexibility, their primary use case is liquidity staking.

Liquidity Staking Providers (LSPs) allow users to stake their TIA tokens while retaining liquidity through liquidity staking derivatives such as stTIA on Stride. This has a dual advantage: users can continue to earn TIA staking rewards while using the underlying value in other DeFi applications. However, it comes with risks, such as adding protocol layers or relying on third-party trust in a multi-signature setup.

LSPs can accumulate a large number of staked tokens in the network. If these tokens are delegated to only a few validators, it will lead to the centralization of network voting power and decision-making power. Therefore, Celestia's LSP must meet key principles such as decentralization, trust minimization, and community governance.

By implementing ICA, Celestia can support protocols such as Stride to provide decentralized, trust-minimized liquidity staking services that are consistent with community values. In practice, this means that users on Celestia can manage their staking activities on Stride without relying on a centralized entity. For example, users can stake TIA on Stride and receive stTIA (staked TIA), while still managing all related operations (such as delegation, reward collection, and unstaking) directly from their Celestia account.

Users can benefit from a seamless experience across different chains. They can interact with multiple chains without having to manually manage accounts on each chain. This makes it easier and more intuitive to use cross-chain applications.

CIP-20: Disabling BlobStream Module

Finally, Celestia’s Lemongrass upgrade will implement CIP-20, focusing on removing the old Blobstream module from Celestia as it has been replaced by the more advanced Blobstream X.

According to the official CIP-20 page, this is part of an ongoing effort to clean up obsolete or unnecessary components in the system. While this change will not directly affect end users, it is an important step in optimizing the entire system. Removing obsolete components helps ensure that the network runs smoothly and efficiently.

Conclusion

The Lemongrass upgrade is a major step forward for Celestia, not only in terms of technical enhancements, but also in terms of how to prepare the network for future developments. Each CIP has been strategically designed to address specific challenges and opportunities.  

CIP-6 is a key initiative to maintain pricing stability and fairness, which is critical as more and more rollups and applications begin using Celestia. CIP -9 enhances cross-chain communication, a feature that will become increasingly important as blockchain interoperability grows. CIP -10 makes upgrades more efficient and less risky, an essential evolution as the network scales. CIP -14 introduces the groundbreaking feature of cross-chain accounts, paving the way for more complex and decentralized applications. Finally, CIP-20 is a necessary housekeeping step to ensure the network remains lean and optimized.