Celestia surges 11.64% on governance proposal to slash inflation to 0.25%

Celestia's price has surged by 11.64%, reaching $1.64, driven by a significant governance proposal that has sparked excitement within the community. The proposal, titled "Proof of Governance," aims to revolutionize the selection and reward distribution of validators. Instead of the traditional staking process, this new model proposes that governance directly elect validators, eliminating the need for token locking, delegating, and unbonding periods.

The proposal suggests a dramatic reduction in inflation from around 5% to 0.25% annually. Despite this reduction, validators would still receive the same payouts, as they would continue to earn a 5% cut without increasing the overall supply. Additionally, all transaction fees and MEV (Miner Extractable Value) would be burned, benefiting all TIA holders equally, rather than just those who are staking.

The proposal also argues that Liquid Staking Tokens (LSTs) would become obsolete under this new system. With no staking involved, TIA itself would effectively become a liquid staking token, fully composable, and without the added risk of smart contracts. The authors claim that this new model better reflects the current state of staking and could help Celestia avoid overpaying for security, which they estimate is happening by up to 20 times under the current system.

Technical analysis of TIA's price action shows strong alignment with today’s surge. On the 4-hour chart, TIA has broken out from a recent low near $1.32, forming a double-bottom pattern. The price has now reclaimed the 50-period simple moving average at $1.49, turning prior resistance into near-term support. The chart structure indicates higher lows and rising momentum, with the Relative Strength Index (RSI) hovering just under overbought territory. Resistance is set between $1.68 and $1.70, with $1.82 and $2.00 as the next possible targets if bullish momentum continues.

Market participants are also considering broader sector dynamics, as modular blockchain infrastructure has gained increased attention. Celestia's positioning within this trend is attracting additional speculative flows. Derivatives data shows long positions dominating, suggesting confidence in the short-term upside despite spot profit-taking. The proposal and its implications are still under discussion, but early positioning by market participants indicates anticipation of further developments around Celestia’s evolving governance design.