Celestia's TIA Falls 90% as Token Unlocks Flood Market

Celestia’s native token, TIA, has plunged over 90% from its 2024 peak of $20 to a recent low of $1.65, sparking concerns about the sustainability of its tokenomics model and the broader implications for the modular blockchain movement [1]. Initially driven by massive airdrops and community enthusiasm, Celestia’s rapid rise masked structural weaknesses that became apparent as vesting periods ended and large token unlocks flooded the market [1].

The collapse of TIA followed a pattern observed in other high-profile blockchain projects, where early liquidity events and aggressive token sales by venture capital firms and core contributors overwhelmed demand [1]. Tokenomist data indicates that a significant portion of the unlocked tokens came from early backers who had acquired TIA at deep discounts during earlier fundraising rounds [1]. As these tokens entered circulation, selling pressure intensified, dragging the price down despite a 50% increase in market cap to $1.2 billion [1].

The crisis reached a critical point in July 2025 when Polychain Capital, one of Celestia’s leading investors, exited its position entirely. The Celestia Foundation responded by repurchasing Polychain’s remaining TIA holdings for $62.5 million at $1.44 per token, a move intended to stabilize the token’s value and restore investor confidence [1]. The foundation has since announced a new rolling unlock schedule for these tokens, designed to reduce market volatility and manage inflation over the coming months [1].

Critics argue that Polychain’s exit strategy, which included offloading over $240 million in TIA through staking yields, disproportionately benefited insiders and exacerbated the price drop [1]. In response, Celestia has introduced staking reforms as part of its “Lotus” mainnet upgrade, which now locks staking rewards for early investors to align incentives with long-term network health [1].

The TIA crash mirrors similar collapses in other Layer 1 and Layer 2 projects, such as Blast and Berachain. Blast, for example, saw its TVL drop from $2.7 billion to just $105 million after a massive token unlock in June 2024. Meanwhile, Berachain’s token dropped 50% in the hours after launch, amid accusations of insider trading and an uneven airdrop [1]. These cases highlight a broader trend in which speculative hype and aggressive liquidity events fail to support long-term value creation.

Looking ahead, the crypto market is bracing for further volatility as major token unlocks loom. Between August 4 and August 10, 2025, projects like Ethena (ENA), Jito Labs (JTO), and Immutable (IMX) will release millions of tokens into circulation, potentially triggering further sell-offs [1]. Ethena, for instance, will unlock 171.85 million ENA tokens, worth $101.87 million—nearly 2.7% of its market cap—raising concerns about downward pressure on its price [1].

These developments underscore a growing skepticism toward airdrop-driven tokens that prioritize short-term liquidity over sustainable growth. As investors become increasingly wary of aggressive unlocks and uneven token distributions, the long-term viability of projects like Celestia will depend on their ability to realign tokenomics with community interests and long-term value creation [1].

Source:

[1] Cryptonews. “Celestia Tokenomics Crisis: TIA Plunges 90% After Aggressive Unlocks—Is Airdrop Hype to Blame?” https://cryptonews.com/news/celestia-tokenomics-crisis-tia-plunges-90-after-aggressive-unlocks-is-airdrop-hype-to-blame/