Celestia Tokenomics Disaster: TIA Plunges 90% After Aggressive Unlocks—Is Airdrop Hype to Blame?

As soon as hailed because the poster baby of the “modular blockchain” motion, Celestia’s native token TIA has plummeted over 90% since its 2024 peak. Whereas initially using the hype of a large airdrop and guarantees of decentralization, the token’s steep decline is now elevating uncomfortable questions on tokenomics, aggressive unlocks, and enterprise capital exit methods.

Launched with vital group backing in late 2023, Celestia’s TIA token was distributed to 580,000 customers by means of one of many largest airdrops in current reminiscence. TIA surged to $20 in September 2024, fueled by optimism round Celestia’s structure and adoption prospects.

Nonetheless, as vesting cliffs started to run out, giant volumes of beforehand locked tokens entered circulation. In line with Tokenomist information, many of those belonged to early backers and core contributors, together with enterprise capital corporations that had acquired TIA at deep reductions throughout early fundraising rounds.

The outcome was a flood of promote stress. As these tokens hit the open market, TIA’s worth collapsed, reaching lows of simply $1.65, a drop of over 90%. Regardless of this, the token’s market cap rose by 50%, now hovering round $1.2 billion.

Polychain Exit and Celestia’s Try to Regain Management

The tipping level got here in July when considered one of Celestia’s most distinguished backers, Polychain Capital, divested solely from the challenge. The Celestia Basis introduced a $62.5 million buyback of Polychain’s whole remaining TIA holdings, priced at roughly $1.44 per token, close to its market price on the time.

In an effort to stabilize the token financial system, the muse plans to redistribute the repurchased tokens below a brand new rolling unlock schedule, beginning August 16 and concluding November 14. The revised construction is a part of a broader technique to handle inflation and restore investor belief.

Criticism had been constructing round Polychain’s dealing with of staking rewards. Regardless of their preliminary funding nonetheless being below lock, on-chain analysts estimate the agency offloaded greater than $240 million price of TIA, primarily from staking yield. The heavy sell-offs have been seen by many as exploiting loopholes within the reward system, disproportionately benefiting early insiders on the expense of retail contributors.

In response, Celestia launched a staking reform as a part of its upcoming “Lotus” mainnet improve. The replace applied a lock mechanism through which early traders will now not have the ability to money out staking yields prematurely, guaranteeing that reward entry is aligned with long-term dedication to the community.

From Blast to Bust: TIA Crash Signifies Fragility of New Tokenomics

The current plunge in Celestia’s TIA token worth mirrors a broader sample plaguing newer Layer 1 and Layer 2 initiatives, the place aggressive unlock schedules and liquidity mismanagement dismantle early hype.

Probably the most putting collapse got here from Blast, which initially attracted over $2.7 billion in Whole Worth Locked (TVL), changing into the sixth-largest blockchain inside six months. At its peak, it boasted greater than 200 deployed dApps and 180,000 day by day lively customers. However the momentum was short-lived.

An enormous June 2024 unlock, over 10.5 billion tokens, accounting for greater than half its provide, flooded the market, crashing costs to all-time lows. As of right this moment, TVL has cratered by over 96% to simply $105 million, with day by day exercise down to three,800 customers.

Additionally, Berachain suffered a 50% worth drop inside hours of launch amid insider buying and selling accusations and an unpopular airdrop that noticed some customers obtain tens of millions whereas others received nothing.

Equally, Omni Community’s token fell over 50% on launch day. With one other 15.98 million OMNI unlocking on Could 3, price practically $40 million at present costs, the bearish pattern appears prone to proceed. OMNI has already misplaced over 92% from its all-time excessive of $53.81.

These failures underscore a rising skepticism round newer tokens that prioritize early liquidity and inflated valuations over sustainable ecosystem progress.

Token Unlocks Proceed to Strain Market as Main Initiatives Brace for Volatility

The crypto market is getting ready for one more turbulent week as main token unlocks threaten to shake investor sentiment. Between August 4 and August 10, 2025, a number of high-profile initiatives, corresponding to Ethena (ENA), Jito Labs (JTO), and Immutable (IMX), will launch tens of millions in tokens, doubtlessly creating contemporary waves of volatility.

Ethena tops the record with a scheduled unlock of 171.85 million ENA tokens on August 5, price an estimated $101.87 million, or 2.70% of its market cap. ENA’s worth has already slipped -61.43% from its all-time excessive of $1.52 and is now buying and selling at $0.5883. The challenge beforehand carried out a extensively adopted airdrop in April 2024, distributing 750 million tokens to contributors. Nonetheless, the contemporary provide may stress costs additional if recipients resolve to promote into the unlock.

On August 7, Jito Labs will launch 11.31 million JTO tokens, price $19.07 million and accounting for 3.14% of its market cap. The Solana-based DeFi challenge distributed round $225 million price of tokens throughout its December 2023 airdrop. Since then, JTO has fallen -70.13% from its all-time excessive of $5.61, at present buying and selling at $1.69, elevating considerations about continued draw back threat.

Immutable will unlock $12.15 million price of IMX tokens on August 8, or 1.30% of its market cap. Whereas over 95.1% of IMX’s whole provide has already been launched, the unlock nonetheless issues, as IMX has plummeted -94.57% from its peak of $9.50 and is now buying and selling at simply $0.5173. IMX’s token dynamics replicate the pattern seen throughout many airdrop-heavy initiatives—transient preliminary hype adopted by sharp post-unlock sell-offs.

These upcoming unlocks come at a time when market confidence in airdrop-distributed tokens continues to falter. With airdrop recipients usually appearing as aggressive sellers, future unlocks, particularly in a bearish or sideways market, may exacerbate downward stress throughout the altcoin sector.

The put up Celestia Tokenomics Disaster: TIA Plunges 90% After Aggressive Unlocks—Is Airdrop Hype to Blame? appeared first on Cryptonews.