Polychain makes a spectacular exit from Celestia: 12x return, community in uproar!

Investment fund #PolychainCapital has sold all 43.4 million TIA – worth 62.5 million USD – to the Celestia Foundation, marking a complete “exit” from this modular blockchain project. The sold TIA will be redistributed to new investors according to a gradual unlocking schedule over 3 months (16/08–14/11), in order to avoid shocking the market supply.

With an initial investment of about 20 million USD, Polychain has made nearly 12 times profit, primarily thanks to exploiting the uncapped staking reward mechanism – which has outraged the community. Since $TIA launched, Polychain has sold a total of 242 million USD, even though the native token is still vesting.

In response to the wave of criticism, #celestia announced the upgrade of mainnet v4 "Lotus" at the end of July with 4 major improvements (CIP-29 to CIP-32), notably:

Locking staking rewards proportionate to the vesting level of the native token.

Reducing token issuance by 33% to curb inflation.

Users must claim staking rewards themselves.

Integrating Hyperlane, connecting TIA with hundreds of rollups without the need for a centralized bridge.

This is an effort to rectify vulnerabilities in tokenomics and prevent funds from “milking” the project. Although not technically violating any rules, the Polychain incident exposes serious weaknesses in the staking reward distribution model – a costly lesson for the entire Web3 ecosystem.

This article is not investment advice.