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

Key Points

1. Celestia's TIA token dropped over 90% from its 2024 peak of $20 to $1.65, driven by large volumes of unlocked tokens entering circulation from early investors.

2. Polychain Capital, a major backer, divested entirely from Celestia, prompting the Celestia Foundation to buy back $62.5 million worth of TIA tokens to stabilize the market.

3. The collapse of TIA mirrors issues in other projects like Blast and Berachain, where aggressive token unlocks and liquidity mismanagement led to significant price drops and loss of investor confidence.

4. Upcoming token unlocks for projects like Ethena (ENA), Jito Labs (JTO), and Immutable (IMX) threaten further market pressure, with ENA alone set to release $101.87 million worth of tokens.

5. The broader trend shows that many airdrop-heavy projects experience initial hype followed by steep declines, raising concerns about the sustainability of current tokenomics models.