Celestia launched as the standard-bearer for the modular thesis, a new blockchain architecture designed to decouple core functions like consensus and execution. By specializing as a data availability (DA) layer, Celestia provides a secure and cost-efficient foundation for a growing ecosystem of rollups and Layer 2s. Its novel use of Data Availability Sampling (DAS) allows even light nodes to verify data, a design intended to enhance scalability and decentralization.
The project’s mainnet launch fueled the modular narrative, championing a future of customizable blockchains built on a shared DA layer. This promise was epitomized by early adopters like Manta Network, which migrated to Celestia to drastically reduce transaction costs for its users. With high-profile funding and key integrations with projects like Eclipse and Starknet, Celestia established itself as one of the first production-ready DA layers in the market. But, Sadly things didn't go as planned Celestia native token $TIA Dumped -90% From ATH and Product usage also dry
II. Metrics: A Tale of Two Trajectories
❍ Price Performance
Despite its strong launch, Celestia’s native token, TIA, has experienced severe price depreciation. After surging to an all-time high of over $20 in early 2024, TIA entered a consistent slide. As of June 2025, the token trades around $1.62, marking a decline of over 90% from its peak.
This collapse has shrunk its market capitalization to approximately $1.1 billion, a figure that stands in contrast to its fully diluted valuation (FDV) of $1.83 billion, highlighting the large volume of tokens yet to enter circulation. The price erosion has been accompanied by a sharp drop in trading volume and futures market activity, signaling waning investor confidence.
❍ On-Chain Usage
Celestia's usage metrics tell a different story, one of technical success but economic underperformance. The network has proven its ability to handle massive throughput, at times accounting for up to 90% of all data posted by Layer 2s and processing data volumes nearly 40 times greater than Ethereum's EIP-4844 blobspace. However, this high throughput has not translated into significant revenue.
The network's fee structure, designed to be extremely low to attract users, generates minimal income, with annualized revenue estimated at only $1 million and daily fees sometimes totaling just a few hundred dollars. Furthermore, network activity has been highly concentrated, with a single rollup, Eclipse, responsible for the vast majority of blobspace usage during peak periods. This combination of low fees and concentrated demand has led to the perception of DA as a commoditized service, where usage growth fails to create sustainable value for the native token.
III. The Decline: Key Factors
▨ Token Unlocks and Persistent Supply Pressure
The most significant headwind for TIA’s price has been its aggressive token unlock schedule. Following the mainnet launch, large allocations for early investors and core contributors began to vest, introducing a steady and substantial stream of new supply to the market. In 2025, this linear vesting schedule releases nearly 1 million TIA tokens into circulation daily, creating immense and continuous sell pressure.
This level of supply inflation requires a constant and massive inflow of new capital just to maintain a stable price. In a market with shifting narratives and waning speculative interest, this has proven unsustainable, leading to severe liquidity imbalances and amplifying downward price pressure, particularly around large cliff unlock events.
▨ The Commoditization of Data Availability
Celestia pioneered the modular DA market, but its success illuminated the path for formidable competitors, turning the DA layer into a highly commoditized and competitive space.
Ethereum's Native Solution (EIP-4844): The introduction of "blobs" via EIP-4844 provided Ethereum rollups with a native, secure, and trusted DA solution. While Celestia is often cheaper, Ethereum's solution allows rollups to inherit the security of its massive validator set without external trust assumptions. A "cold-start" problem in the blob fee market has also kept costs unexpectedly low, directly competing with Celestia's primary value proposition.
The Rise of Restaking (EigenDA): Competitors like EigenDA pose a direct threat by leveraging Ethereum's economic security through restaking. Instead of securing its network with a native token, EigenDA allows Ethereum stakers to secure its services, tapping into billions of dollars of staked ETH from day one. This offers a security guarantee that is difficult for a standalone PoS chain like Celestia to match and has already attracted major L2s like Mantle and ZKsync.
This intense competition has triggered a "race to the bottom" on pricing, forcing DA providers to offer their services as cheaply as possible to gain market share.
▨ The Value Accrual Paradox
The competitive pressure to offer low-cost data availability creates a fundamental paradox for TIA's tokenomics. The token is designed to accrue value from network usage, primarily through transaction fees (a portion of which are intended to be burned) and demand for staking. However, Celestia's business strategy directly undermines this.
Fees are intentionally kept low—around 1000x cheaper than Ethereum's EIP-4844—as a strategic choice to attract users and gain market share. While effective for adoption, this results in negligible protocol revenue, rendering the fee-burn mechanism economically insignificant against the high rate of token emissions. This conflict was highlighted in a governance proposal by Celestia's co-founder to modestly increase fees, underscoring the internal struggle between driving adoption and creating a sustainable economic model for the TIA token.
▨ Shifting Market Narratives and Speculative Cool-Down
Broader market dynamics have also contributed to Celestia's decline. The crypto market of 2025 has seen a distinct narrative rotation away from the infrastructure-focused themes that dominated in 2024. Investor attention and capital have shifted toward application-layer trends like AI, Real-World Assets (RWAs), and DePIN. This has deprived infrastructure tokens like TIA of the speculative interest that fueled their initial rise. This is reflected in metrics like futures funding rates, which have often turned negative, signaling prevailing bearish sentiment and a reluctance among traders to accumulate TIA.
▨ Network Upgrades and Incentive Models
While Celestia's development continues, key upgrades and changes to its economic model have not been sufficient to reverse the negative trend. The network has implemented changes to reduce staking inflation and prevent investors from immediately selling staking rewards. However, these adjustments have been overshadowed by the larger market forces of token unlocks and intense competition. The focus remains on attracting a diverse and sustainable base of rollups to generate organic demand for its blockspace, a challenge that persists in the current market environment.
IV. The Competitive Squeeze and Value Disconnect
A core issue for Celestia has been the growing gap between its utility as a service and the value accrual of its native token, a problem magnified by fierce competition.
The Manta Paradox: The case of Manta Network perfectly illustrates this disconnect. After migrating its DA layer to Celestia in late 2023, Manta saved over 99% on data costs, translating to hundreds of thousands of dollars in gas fee savings for its users. This was a clear demonstration of Celestia's utility. However, during this period of successful adoption, the TIA token's price collapsed by over 90% from its all-time high, showing that being a cheap and effective service did not translate into sustained economic demand for the TIA token itself.
Deeper Competitor Comparison: Celestia's first-mover advantage was quickly eroded by powerful competitors with different architectural and economic models. This turned data availability into a low-margin, commoditized service, making it difficult for Celestia to capture significant value.