Celestias Team Revises Consensus Algorithm Following TIAs Historic Low

On June 22, the native coin of the modular blockchain Celestia (TIA) plummeted to a historic low of $1.32, marking a staggering 92% drop from its peak price of $20.85.

The community’s panic was fueled by rumors of potential manipulations within the project’s team and insider trading. A user by the name of 0xCircusLover accused Celestia of conducting several over-the-counter sales and coordinating high-paying «stooges» to promote TIA on social media.

According to this user, the blockchain’s leadership has been liquidating tokens that were previously locked since October 2024, with the total assets estimated to be around $1 billion at that time.

Celestia’s co-founder, Mustafa Al-Bassam, dismissed 0xCircusLover’s claims, labeling the situation as FUD. He asserted that «all founders, early employees, and lead developers are still here, working hard.»

Al-Bassam believes that a 95% drop is common in the life cycle of most coins. He reassured that Celestia continues to have funding:

«We have a war chest of $100 million and a six-year runway, so we are prepared to play the long game.»

In response to user dissatisfaction, another co-founder, John Adler, attempted to address on-chain issues within the network. He proposed replacing the existing Proof-of-Stake consensus algorithm with an experimental Proof-of-Governance model.

This new mechanism aims to reduce the issuance of new coins by a factor of 20 and eliminate the complexities associated with liquid staking tokens.

Adler clarified that the proposal seeks to lower the emission rate from 5% to 0.25%, without compromising security. This would create a more equitable system for generating passive income.

«While the net issuance for token holders is zero, validators will receive actual issuance for delegation,» one of the proposal’s points states.

Under the Proof-of-Governance model, token holders will be able to select node operators without locking up their coins, though such users will not receive rewards.

Following the announcement of the proposal, the price of TIA increased by approximately 10% to $1.65.

It’s worth noting that in May, movement Labs announced the dismissal of co-founder Rushi Manche due to a scandal involving market makers and price manipulation of the MOVE token.