Polychain earned $80 million from Celestia rewards without selling its initial $20 million token stake.
Critics questioned emission models that allow locked tokens to generate outsized staking profits for early investors.
Columbia professor Omid Malekan challenged the fairness of insider rewards tied to token lockup periods.
Polychain Capital has generated over $80 million by selling staking rewards from Celestia (TIA), a modular blockchain platform. The investment firm did not reduce its core stake in the project but profited entirely from the network’s reward emissions. This development has triggered renewed criticism about token structures that benefit insiders during lockup periods.
Rewards Outpace Investment Fourfold
Blockchain researcher Pavel Paramonov from Hazeflow reported that Polychain’s original investment in Celestia stood at $20 million. The firm has since earned more than four times that figure just from staking rewards. These rewards came while Polychain’s main token holdings remained locked, amplifying concerns over the project’s economic model.
https://twitter.com/paramonoww/status/1938197241455325311
Paramonov emphasized that this gain occurred without any liquidation of the initial stake. The entire profit stemmed from emissions distributed through Celestia’s staking protocol. He added that this situation raised questions about investor advantages relative to broader tokenholder fairness.
Industry Reactions to Insider Profits
Omid Malekan, a blockchain professor at Columbia University, responded to the report by addressing token distribution practices. He commented on the use of emissions for locked insider tokens. Malekan argued that these setups favor venture capital profitability instead of product development outcomes.
https://twitter.com/malekanoms/status/1938231534688821343
He also criticized the mismatch between public narratives and the actual investment structure. He noted that firms participating in such token models should avoid positioning themselves as mission-driven supporters. His comments circulated widely across social media platforms and crypto forums following the revelations.
The issue brought attention to how some blockchain protocols handle early investor rewards. The practice of granting staking emissions during token lockup periods remains a debated topic. Critics argue that this model distorts incentives and creates unbalanced returns between insiders and regular participants.
Polychain’s Track Record and Asset Scale
Founded in 2016 by Olaf Carlson-Wee, Polychain Capital is known for early bets on major blockchain projects. Its portfolio includes Coinbase, Compound, and Tezos. As of June 2025, the firm manages approximately $5 billion in assets under management.
The recent report about Celestia is the latest in a series of discussions about investor compensation in early-stage blockchain networks. Celestia’s modular architecture and staking system attracted institutional interest during development, with Polychain among the key backers.
Although the core investment remains intact, the earnings through reward sales have drawn attention due to their scale. Industry observers continue to track how emissions-based profit strategies influence ecosystem growth and token holder alignment across emerging protocols.
