TIA (TIA) tokenomics

Celestia’s native token, TIA, is central to the network's modular architecture. Launched on October 31, 2023, with the release of the Celestia Mainnet Beta, TIA serves as the primary utility and governance asset for the ecosystem.

Issuance Mechanism

TIA is an inflationary asset with no maximum supply. The issuance is governed by a disinflationary schedule designed to incentivize long-term network security while gradually reducing the rate of new supply.

• Initial Supply: 1,000,000,000 (1 billion) TIA.
• Inflation Rate: The network began with an 8.00% annual inflation rate.
• Reduction Schedule: Starting October 31, 2024, the inflation rate decreases by 10.00% each year.
• Inflation Floor: The rate will continue to drop until it reaches a constant floor of 1.50% annually, projected to occur on October 31, 2039.
• Current Supply: As of late 2024, the total supply has grown to approximately 1.09 billion TIA due to these emissions.

Allocation Mechanism

The initial 1 billion TIA tokens were distributed across several stakeholder groups to balance ecosystem growth, research, and investor interests.

The Public Allocation included a "Genesis Airdrop" of 60 million TIA (6% of initial supply) distributed to over 580,000 addresses, including developers, Ethereum rollup users, and Cosmos/Osmosis stakers.

Usage and Incentive Mechanism

TIA provides several core functionalities that drive demand and secure the network:

• Data Availability Fees: To use Celestia for data availability, "PayforBlobs" transactions must be submitted. These fees are paid exclusively in TIA and consist of a flat fee plus a variable fee based on blob size.
• Staking and Security: Celestia uses a Proof-of-Stake (PoS) consensus. Users can operate a validator or delegate TIA to existing validators. Active validators earn block rewards (inflationary emissions) and transaction fees.
• Gas for New Networks: Developers can use TIA as a gas token and medium of exchange for their own rollups, allowing them to launch without immediately issuing a new token.
• Governance: TIA stakers can vote on Celestia Improvement Proposals (CIPs), influencing network parameters such as the percentage of inflation directed to the Community Pool.
• Incentive Distribution: 98.00% of inflationary rewards go to validators and stakers, while 2.00% is directed to the Community Pool for ecosystem initiatives.

Locking and Unlocking Mechanism

Celestia utilizes a combination of "cliff" unlocks and linear vesting to manage the release of tokens into the circulating supply.

• Locking for Staking: Staked tokens are held in a "Bonded Tokens Pool." While there is no minimum TIA requirement to stake, only the top 100 validators by total stake (self-bonded plus delegated) are active and earn rewards.
• Unlocking Schedule:
  • Public Allocation: 100% was unlocked at the launch (TGE) on October 31, 2023.
  • R&D & Ecosystem: 25% unlocked at launch, with the remaining 75% unlocking continuously from Year 1 to Year 4.
  • Early Backers & Core Contributors: These groups were subject to a one-year cliff. On October 31, 2024, a massive "cliff unlock" occurred where 33% of their tokens became available. This event increased the circulating supply by approximately 83%.
  • Post-Cliff Linear Vesting: Following the October 2024 cliff, the remaining tokens for backers and contributors unlock daily or monthly. Seed and Series A/B backers generally finish their unlock by Year 2, while Core Contributors unlock through Year 3.