Oct 30, 2024

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content. Celestia’s native token, TIA, is set for a major move today as it undergoes a significant token unlock event that would add approximately 175 million tokens to its circulation—nearly doubling the existing supply. According to Tokenomist , this substantial increase represents 80% of the current circulating tokens, equating to around $900 million based on the asset’s current price of $5. This release marks the largest single unlocking event since TIA’s launch last October. The unlock primarily targets rewarding early contributors and investors in the project. Core Contributors are expected to receive 58 million tokens (valued at $298 million), while seed investors will gain 52 million tokens (worth $268 million). Early backers from Celestia’s Series A and B funding rounds will also obtain 65 million tokens, valued at $332 million. In crypto projects, locking tokens through vesting periods is a common strategy to stabilize market prices by preventing early sales by investors, team members, and insiders. These periods often extend up to a year, gradually releasing tokens to ease pressure on the asset’s price. Yet, large token unlocks frequently introduce volatility and downward price pressure. $460 million selling pressure In Celestia’s case, some speculate that this event could introduce up to $900 million in potential sell pressure. However, Taran Sabharwal, founder of the OTC trading platform STIX, pointed out that the actual selling pressure may be far lower as only 92.3 million TIA will likely be in circulation, with a maximum selling pressure closer to $460 million. According to him: “TIA has a 21-day unstaking period, and those who wanted their TIA unlocked for trading on Oct 31 have already unstaked. The sum of non-staked tokens, tokens in the 21-day unstaking queue and approx. 24.1 million unaccounted tokens equals 92.3M TIA. This equates to a max selling pressure of ~$460 million.” He emphasized that this figure represents less than 50% of the cliff unlock, suggesting the actual impact might be lighter than anticipated. Sabharwal further said that many of these newly unlocked tokens had already been sold to OTC buyers who, in anticipation, had hedged positions in perpetual futures markets. This strategic hedging has led to high open interest in recent months, with expectations that some of these short positions will unwind. This could partially offset spot-selling pressure, signaling a potential bullish opportunity for spot buyers.