TIA (TIA) Tokenomics

Celestia's native token, TIA, is central to its function as a modular Data Availability (DA) layer. Launched on October 31, 2023, with the Mainnet Beta, TIA has an initial total supply of 1 billion tokens and no maximum supply, relying on a defined inflation schedule.

Issuance Mechanism

The TIA token supply is governed by an inflationary schedule designed to incentivize network security through staking rewards.

• Initial Supply and Inflation: The initial total token supply at genesis was 1.00 billion TIA. Inflation began at 8.00% annually for the first year.
• Inflation Schedule: The annual inflation rate is set to decrease by 10.00% every year thereafter, starting on October 31, 2024.
• Inflation Floor: This decrease continues until the inflation rate reaches a constant floor of 1.50% annually on October 31, 2039, and onwards.
• Reward Distribution: Of the inflationary token emissions, 98.00% is allocated to reward validators and delegators, while the remaining 2.00% is directed to the Community Pool to fund ecosystem initiatives.

Note: As of December 23, 2024, the total token supply was approximately 1.09 billion TIA.

Allocation Mechanism

The initial 1 billion TIA supply at genesis was distributed across five main categories, with the largest portion allocated to insiders and future development.

The allocation to Insiders (Initial Core Contributors, Early Backers: Seed, and Early Backers: Series A & B) collectively accounts for 53.21% of the initial supply.

Usage and Incentive Mechanism

TIA serves multiple critical functions within the Celestia modular network:

1. Network Transaction Fees (Data Availability)

• Payment for Blobspace: Networks utilizing Celestia for data availability must submit "PayforBlobs" transactions, which require fees paid exclusively in TIA.
• Fee Structure: Fees consist of a flat fee plus a variable fee dependent on the size of the data blob. Validators prioritize transactions that pay higher fees.

2. Network Security and Incentives (Proof-of-Stake)

• Consensus Mechanism: Celestia operates as a Delegated Proof-of-Stake (DPoS) Layer-1 network built on the Cosmos SDK.
• Staking Rewards: Active validators (an initial set of 100) and delegators earn block rewards, which consist of inflationary emissions and network transaction fees.
  • Validators receive a custom-set commission rate from the full block reward and a pro-rata share of the remaining rewards based on their self-staked TIA versus delegated TIA.
  • Delegators secure the network by delegating TIA to a validator and receive a pro-rata share of block rewards minus the validator's commission rate.
• Validator Requirements: Any user meeting hardware requirements can operate a validator node, with no minimum or maximum TIA stake required, though sufficient stake (self-staked plus delegated) is necessary to become an "active" validator and earn rewards.

3. Governance

• Voting Power: TIA stakers can vote on onchain Celestia Improvement Proposals (CIPs) that affect various network parameters, such as the percentage of inflationary emissions sent to the Community Pool.
• Governance Parameters: The voting period is seven days, requiring a quorum of 33.40% of the staked token supply. A simple majority of at least 50.00% of voting power must vote "Yes" for approval. A "No_with_Veto" vote exceeding 33.40% will cause the proposal to fail.

4. Medium of Exchange and Gas

• Developers can use TIA as both a medium of exchange and a gas token to accelerate the launch of new blockchains (rollups) built on Celestia, similar to how ETH functions on Ethereum rollups.

Locking Mechanism and Unlocking Schedule

A significant portion of the initial TIA supply was subject to vesting schedules, with tokens locked until specific milestones or dates. While locked, tokens may be staked, but the staking rewards earned are unlocked upon receipt and immediately contribute to the circulating supply.

Major Unlock Event (Cliff Unlock)

A major cliff unlock event occurred one year after the TIA launch (October 31, 2023).

• Date: October 31, 2024
• Amount: 175.56 million TIA (17.56% of the total initial allocation)
• Impact: This event increased the circulating token supply by approximately 83%.

Vesting Schedules by Allocation Category

The unlock schedules for the major locked categories are as follows:

Near-Term Unlocking Time (Starting November 1, 2025)

Following the major cliff unlock, tokens continue to be released linearly according to their vesting schedules. The following table details the next scheduled linear unlock events for the first few days of November 2025:

These daily linear releases reflect the continuous vesting of tokens allocated to the R&D & Ecosystem and Initial Core Contributors categories.