Celestia Co-Founder Defends Project as Token Nosedives 95%

Celestia’s native token TIA is trading around $1.5, roughly 92–95% below its 2024 peak near $20–21. This steep decline has sparked a wave of criticism on social media over Celestia’s tokenomics and price performance.

In a post on X, co-founder Mustafa Al-Bassam pushed back against the uproar, noting that all Celestia founders and core engineers remain committed to the project.

He highlighted that Celestia holds over $100 million in reserves and has more than a six-year financial runway.

Al-Bassam described the accusations as “FUD” (fear, uncertainty, doubt) and argued that deep drawdowns are common in crypto.

His comments followed community outcry over token unlocks and alleged insider sales, and a brief 11% price rally after his statements.

Investors and observers have grown restless with Celestia’s performance. Launched on Oct. 31, 2023 via a large airdrop, TIA began around $2.30 and then rallied to over $21 in early 2024.

But by June 2025 it had slid to near $1.3–$1.6. In June 2025 the token hit a new low of about $1.32 before a tentative bounce.

Early supporters point to several factors. Investor Larry Sukernik warned in May that Celestia might have mis-timed its launch, noting the network went live before rollups and modular tech became mainstream.

He argued that without a strong pipeline of “product-market fit” apps, Celestia was relying heavily on narrative and marketing for traction.

Many community members have also questioned Celestia’s vesting and inflation. Under its tokenomics, early teams and investors unlock 33% of their allocation after one year, with the remaining share trickling out over the next two to four years.

Critics on X noted that this prolonged schedule could allow insiders to exit at price peaks. One user, “Shrutebuck,” complained that the team and early investors “rewarded themselves at the expense of retail,” and asked why the unlock lasted three to four years.

Another respondent quipped that he believed in Ethereum but not in “those who unlock all my supply in 3 years”. These concerns echo past complaints about token inflation: for example, Celestia’s staking rewards inflate supply by roughly 8% annually, a point raised by other critics.

Celestia Insider Allegations

The discourse turned sharper with detailed allegations on social media. A widely viewed X-thread by user “Startup Anthropologist” claimed that all Celestia executives had token unlocks in October 2024, and that Al-Bassam quietly sold over 25 million TIA in an over-the-counter (OTC) deal before relocating to Dubai.

An anonymous X-post alleging, “Mustafa frantically dumped $25 million OTC and fled to Dubai” after token allocations opened.

Crypto analyst AB Kuai likewise asserted that top executives “fully unlocked and sold off” their TIA in late 2024.

Notably, some Celestia figures have flatly denied wrongdoing. Builder Nick White and others have called the claims false. Still, the rumors have fueled calls for transparency in Celestia’s governance.

Al-Bassam’s response sidestepped specifics about those sales. He pointed out that nearly all crypto tokens eventually endure a 90%+ correction at some point.

Quoting an old trading adage, he wrote that insiders have “thick skin” and must accept volatility. In his statement he said nothing directly disproving the sales allegations, but he reiterated the team’s long-term focus.

“Despite the FUD… all Celestia founders, early employees and core engineers are still here and working as hard as we did when Celestia started 5 years ago,” Al-Bassam wrote.

He also emphasized Celestia’s market position – noting that the project now supports over 30 rollups and handles an estimated 50% of data-availability throughput for alternative Layer-2 chains, making it a default solution for “alt-DA” applications.

These points are intended to reassure investors of the network’s underlying utility, even as token prices struggle.

Market Response

Market reaction to the controversy has been mixed. TIA climbed more than 11% in the hours after Al-Bassam’s post, breaking out of a multi-week downtrend. TradingView data showed the token around $1.59 on that uptick.

However, analysts caution the bounce may prove short-lived. The rally was described as a possible “dead cat bounce,” a temporary recovery in a longer downtrend.

Foresight News noted that TIA remains down about 92% from its peak, and pointed out that the token has seen persistently negative funding rates, suggesting traders remain bearish.

Funding rates on TIA futures were, in fact, among the most negative of any large altcoin in recent weeks indicating a bias toward short positions.

In its favor, Celestia does have significant reserves. Alongside his broader statement, Al-Bassam disclosed that the network’s treasury exceeds $100 million, enough to operate for at least six years without additional token sales.

That helped calm some short-term fears. But observers note that another large unlock event looms. Cointra’s calendar shows roughly 175.7 million TIA about 85% of the then-circulating supply were scheduled to unlock on Oct. 31, 2024 – a one-off event that coincided with a price slump.

The next significant unlock is not far off, raising questions whether insiders will again gain liquidity at a peak price.

Some in the Celestia community are even proposing changes to the network. Co-founder John Adler has suggested replacing proof-of-stake with a “proof-of-governance” system to sharply curb new token issuance.

Under his plan, new annual token inflation could drop from about 8% to as low as 0.25%. Supporters say this could better align incentives as Celestia transitions from growth mode to profitability via data-availability services.