The price of the native blockchain token Celestia (TIA) reached an all-time high of $20 on January 15th. In less than three months of its existence, the token has risen in price almost tenfold, and demand for it continues to be supported by the excitement around new projects in the network ecosystem, writes RBC Crypto.
Celestia Labs, the company behind the development of the Celestia blockchain network, in October 2022 attracted $55 million led by venture capital firms Bain Capital Crypto and Polychain Capital. After this investment round, the Celestia project received unicorn status with a valuation of $1 billion.
The venture capital division of the Coinbase exchange, the cryptocurrency department of the large market maker Jump Trading, Galaxy Digital of Mike Novogratz and a number of other venture investors and business angels also took part in its financing. Before this, in 2021, Celestia developers raised $1.5 million in a seed round, and already in October 2023 they announced investments in the project announced OKX crypto exchange.
Modular blockchain
Celestia Labs is headed by Mustafa Al-Bassam. As a PhD student in computer science in 2019 at University College London, he published a paper called LazyLedger, which presented a radical rethinking of how blockchain works. He described the possibility of separating the various functions of a distributed ledger, particularly how users query data, into separate “application layers.” A key benefit of this approach would be to minimize the total amount of resources required to operate the main blockchain.
Al-Bassam is a co-author of three scientific papers along with co-founder of the Ethereum ecosystem Vitalik Buterin. In one of his speeches in 2022, Buterin presented Celestia as a solution for scaling so-called rollups. roll up). These rollups, in various forms, leverage “layer two” solutions such as Optimism or Arbitrum, and with their help, users can make transactions much cheaper and faster than with Ethereum at the base layer.
It is expected that the main use case for Celestia will be to offload the Ethereum blockchain from the need to process the huge amount of data produced by the rapidly growing ecosystem of roll-up networks. Celestia's solutions further improve the efficiency of the Ethereum main network by taking over data storage and ordering of transactions, and then further transmitting this data to other blockchains to complete transactions.
Technically, the Celestia blockchain is used exclusively for these needs. It does not execute smart contracts or perform calculations, unlike other blockchain networks. Instead, Celestia's model delegates these functions to rollups or other blockchains, and this is a key component of its flexible, modular design. At the same time, developers creating applications on the Celestia network can combine various elements of its infrastructure while maintaining their compatibility.
Token launch
To use Celestia for data processing, rollup developers conduct a separate type of transaction on the network, for which they pay a commission in native tokens – TIA. In September 2023, Celestia developers announced launching a token and distributing it in the form of an airdrop to early network users who were active and participated in its testing in the early stages.
During the distribution, 60 million TIA tokens were distributed into the wallets of 191 thousand qualified airdrop participants, and this amounted to about 6% of their total supply of 1 billion units. More than half of the existing tokens have been distributed to early investors and developers, and another 140 million TIA has been allocated to fund future project initiatives. A significant portion of these tokens remain locked: early investors will receive tokens in several stages between October 2024 and October 2025, and developers will receive tokens until October 2026.
On the day the token was launched, November 1, 2023, it was listed by Binance, OKX, Bybit, KuCoin and other large crypto exchanges. According to the results of the first day of trading, the TIA price was fixed at $2.44 with a capitalization of about $344 million.
In less than three months, in January 2024, the TIA rate increased almost 10 times. On January 15, the token reached $20, and its capitalization soared to 3 billion, which brought TIA into the top 30 largest existing crypto assets.
Why has the token become more expensive?
Airdrop as a tool for attracting users played into the hands of not only the Celestia network itself. The developers of several projects using its blockchain announced the distribution of their own tokens to those who help Celestia maintain its work, acting as a so-called transaction validator, and this provoked even greater demand for the TIA token.
The TIA token allows application developers to use the Celestia blockchain without having to deploy their own network of validators. Thus, those who act as validators by staking their own tokens play an important role in the ecosystem: they ensure the correct operation of not only Celestia itself, but also those networks that rely on it for data availability.
Demand for the TIA token, as well as its price, began to grow rapidly after two projects announced at the very beginning of 2024 that they would airdrop their own tokens to everyone who holds TIA in staking. The first of them was Saga, whose developers announced the distribution of SAGA tokens among 27 thousand participants in the list of those who had staked at least 23 TIA tokens before December 1, 2023.
Soon, the Dymension project team announced plans to distribute 20 million DYM tokens to everyone who had at least 1 TIA staked. The tokens themselves have not yet been launched, but qualified distribution participants are already putting them up for pre-sale on over-the-counter services, where the price of the DYM token reaches almost $5.
Against this background, more and more market participants began to buy and stake TIA tokens, expecting new distributions from other projects. By data Smartstake, the day before the announcement of the airdrop of DYM tokens, there were about 124 thousand wallets in the Celestia network involved in staking, but by January 15 their number had already exceeded 320 thousand.
Airdrops have proven to be an effective marketing tactic for new crypto projects. Projects such as Berachain, Monad or Manta, which also rely on the Celestia infrastructure, are due to launch in 2024, and so-called drop hunters are also expected to distribute tokens from them.
Source: Cryptocurrency

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