Celestias Team Reevaluates Consensus Algorithm After TIA Hits Historical Low

On June 22, the native coin of the modular blockchain Celestia (TIA) hit an all-time low of $1.32, representing a remarkable 92% drop from its peak price of $20.85.

The community’s anxiety was heightened by rumors of potential manipulation within the project team and insider trading. A user named 0xCircusLover accused Celestia of executing several over-the-counter sales and coordinating highly-paid «fronts» to promote TIA on social media platforms.

He speculated that since October 2024, the blockchain’s leadership had been liquidating tokens that were previously locked in vesting, estimating the total value of these assets at around $1 billion at that time.

Celestia’s co-founder, Mustafa Al-Bassam, refuted the claims made by 0xCircusLover, labeling the situation as FUD. He stated that «all founders, early employees, and main developers are still here and working diligently.»

Al-Bassam believes that a 95% drop is typical in the lifecycle of most coins and emphasized that Celestia continues to secure funding, saying:

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

Another co-founder of Celestia, John Adler, amidst user dissatisfaction, sought to address on-chain issues within the network. He proposed replacing the consensus algorithm from Proof-of-Stake to an experimental Proof-of-Governance mechanism.

This new approach aims to reduce the issuance of new coins by twenty-fold and eliminate the complexities of liquid staking tokens.

Adler clarified that this proposal seeks to lower emissions from 5% to 0.25% without compromising security, thereby creating a fairer passive income system.

«While the net issuance for token holders remains zero, validators receive real emissions for delegation,» one of the proposal’s points stated.

Under the Proof-of-Governance framework, token holders will be able to choose node operators without having to lock their coins, though such users will not receive rewards.

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

As a reminder, in May, the company Movement Labs announced the dismissal of co-founder Rushi Manche due to a scandal involving market makers and manipulation of the MOVE token’s price.