One of the hottest projects in October is Celestia. TIA is the token of Celestia, which also serves as a public chain. The token airdrop for Celestia is the largest one in October, with a total of 60 million tokens airdropped to the community. Based on the issuance price of $2, this amounts to a $120 million token airdrop to the community, making it the largest airdrop in 2023.
1. Fundamental Analysis of Celestia: Product Value and User Pain Points
Celestia has been in development for a while and has gained investor attention due to its focus on addressing two major pain points of Ethereum. Its academic paper not only features the name of Celestia CEO but also includes Vitalik as the third author, which has further fueled investor confidence. In 2021, dozens of institutions vied to invest in Celestia's Series B funding, with Polychain Capital leading the way, and other investment firms following suit, resulting in a rapid completion of a $55 million Series B investment.
Celestia targets two main Ethereum pain points: security and speed. Ethereum has struggled with centralization issues, leaving it vulnerable to 51% attacks. Although Ethereum upgraded to 2.0 with a POS algorithm, reducing the risk of 51% attacks, it has also impacted Ethereum's decentralization. One direct consequence is that during the bear market, Ethereum 2.0 didn't achieve the desired deflation but instead experienced inflation. The reason for inflation is that the rewards generated from token staking exceeded the Ethereum consumed by gas fees.
Ethereum's speed, or blockchain update efficiency, is relatively slow. While Layer 2 solutions alleviate the pressure on the Ethereum mainnet, they don't significantly improve Ethereum's own Roll-Up efficiency. The Ethereum mainnet still needs to update the entire network to reach consensus.
Celestia also uses a POS consensus mechanism, but its nodes download randomly sampled blockchain data. Unlike Ethereum nodes, which require downloading the entire blockchain data and broadcasting full blockchain updates, Celestia's nodes are highly efficient and fast. Celestia's initial adoption of the POS consensus mechanism has thus avoided the 51% attack problem that Ethereum faced before its upgrade.
2. Fundamental Analysis of Celestia: Token Economics and Risks
Celestia's token economics are similar to COSMOS, as even during the token lockup period, tokens can be staked to earn staking rewards, which can be withdrawn at any time. According to the TIA token details:
- Seed round investors: Hold 9%, with a 3-year lockup, releasing 33% each year.
- A&B round investors: Hold 7%, with a 3-year lockup, releasing 33% each year.
- Development and ecosystem: Hold 8%, with 25% released at project launch, and the remaining 75% released over 4 years.
- Community: Hold 20%, including airdrops. No lockup period.
- Initial core contributors: 6%, with a 3-year lockup, releasing 33% each year.
The main issue with the POS algorithm is that if the amount staked significantly exceeds the tokens consumed by gas fees, the entire network experiences inflation. To address this, the POS algorithm adjusts token rewards based on the overall network staking conditions. More staked tokens result in lower token rewards, while fewer staked tokens lead to higher rewards, similar to how POW adjusts mining difficulty based on network conditions.
Currently, apart from the 60 million tokens airdropped, most of the tokens are held by investors and the team. These tokens can be staked and are definitely in a staked state. Whether TIA token prices rise or fall depends on whether stakers continue to stake or choose to sell. If they continue to stake, there is no selling pressure, and prices rise. If they sell, token prices will fall.
The estimated staking rewards are around 7% in the first year and decrease with each unlock. This percentage is significantly higher than Ethereum's current inflation rate of 0.385%.
3. TIA Token Price Prediction
TIA tokens have significant potential as a public chain, with no upper limit on their total supply and an initial supply of 1 billion tokens. Based on the estimated price after listing on BingX, the current market cap of the tokens is $20 billion USD.
Due to the airdrop, the price briefly rose to $10 and then declined, marking the end of the initial selling pressure. The token price has stabilized at $2.
There are no short-term signs of earnings from tokens staked by the team and investors, but with positive Bitcoin news and the technical background of TIA itself, there is a 65% likelihood of the token price increasing in Q4 2023.
5. How to Buy TIA Tokens
Users can click the buy button below to purchase TIA tokens.
Investing in cryptocurrencies carries risks, and the above content is for educational purposes only and does not constitute investment advice. If you wish to republish, please cite BingX as the source.