TIA (TIA) tokenomics

Issuance Mechanism

Celestia (TIA) was launched on October 31, 2023, with an initial total supply of 1,000,000,000 TIA. The network employs an inflationary issuance model with no maximum supply. The inflation rate is designed to decrease over time according to a fixed schedule:

• Initial Year: Inflation started at 8.00% annually.
• Disinflationary Phase: Starting October 31, 2024, the inflation rate decreases by 10% each year.
• Terminal Floor: The inflation rate will continue to drop until it reaches a long-term issuance rate of 1.50% on October 31, 2039, where it will remain constant.

Inflationary rewards are distributed such that 98% goes to reward validators and 2% is directed to the Community Pool to fund ecosystem initiatives. As of late 2024, the total supply had grown to approximately 1.09 billion TIA.

Allocation Mechanism

The initial 1 billion TIA supply at genesis was distributed across several stakeholder groups to balance early contributor rewards with long-term ecosystem growth.

The Genesis Drop specifically targeted over 576,000 on-chain addresses and 7,500+ developers across Ethereum, various rollups, Cosmos Hub, and Osmosis.

Usage and Incentive Mechanism

TIA serves as the lifeblood of the Celestia modular network, providing utility across several core functions:

• Data Availability Fees: To use Celestia for data availability, rollup developers must submit "PayForBlobs" transactions. These fees are paid exclusively in TIA and consist of a flat fee plus a variable fee based on the size of the data blob.
• Staking and Security: As a Proof-of-Stake (PoS) network, TIA is used to secure the chain. Users can delegate their TIA to one of the 100 active validators. Validators and their delegators earn block rewards (inflationary emissions) and a share of network transaction fees.
• Gas Token for Rollups: Developers building new blockchains can choose to use TIA as a gas token and medium of exchange, allowing them to launch without immediately issuing their own native token.
• Governance: TIA holders can participate in decentralized governance by voting on Celestia Improvement Proposals (CIPs). This includes voting on network parameters and the distribution of funds from the Community Pool.
• Burn Mechanism: While there is no buyback program, Celestia includes a fee burn mechanism. Additionally, if a governance proposal fails with a "No_with_Veto" majority, the TIA deposit associated with that proposal is burned.

Locking and Unlocking Mechanism

Celestia utilizes a combination of "cliff" unlocks and linear vesting to manage the release of tokens into the circulating supply. While locked tokens cannot be transferred, they can be staked. However, the rewards earned from staking locked tokens are liquid upon receipt.

Unlocking Schedule by Category

The vesting schedules vary significantly depending on the allocation category:

• Public Allocation: These tokens were fully unlocked at the launch of the Mainnet Beta.
• R&D & Ecosystem: 25% was unlocked at launch, with the remaining 75% unlocking continuously from Year 1 to Year 4.
• Initial Core Contributors: 33% unlocked at the one-year milestone (October 31, 2024). The remaining 67% unlocks linearly from Year 1 to Year 3.
• Early Backers (Seed and Series A/B): 33% unlocked at the one-year milestone (October 31, 2024). The remaining 67% unlocks linearly from Year 1 to Year 2.

A major "cliff unlock" occurred on October 31, 2024, which released approximately 175 million TIA (representing roughly $1 billion in value at the time) into the supply, increasing the circulating supply by approximately 83%. Following this event, the network moved into a phase of steady monthly releases of approximately 30 million TIA. Current data indicates daily unlocks of approximately 345,096 TIA distributed across the various stakeholder categories.