Celestia Under Fire: Price Decline, Token Unlocks, and Allegations Stir Debate

On June 26, Hazeflow founder Pavel Paramonov revealed that Polychain had invested approximately $20 million in Celestia (TIA). By selling staking rewards, Polychain has realized more than $80 million in token value, securing over a 4x return on its initial investment. While early venture capital (VC) investors like Polychain have managed to profit, retail and secondary market investors have faced heavy losses as Celestia’s token has been on a persistent downtrend for over a year.

Celestia’s Long Decline: Early VCs in Profit, Late Investors in the Red

Celestia is a modular blockchain designed to improve scalability through data availability layers, allowing developers to launch their own blockchains with minimal setup. The project gained significant attention in early 2024, but its token performance has since sharply reversed.

According to CoinMarketCap, Celestia reached an all-time high of $20.91 in February 2024. Since then, the token has been in a steady downtrend and is now trading at $1.43, with a market capitalization of approximately $985 million at the time of writing. The fully diluted valuation (FDV) currently stands at $1.61 billion.

The funding rounds data from CryptoRank shows that VC investors from the Seed, Series A, and Series B rounds are currently in profit based on the token’s present price. However, for the funding round in September 2024, the ROI is not disclosed on CryptoRank. Data from SoSoValue indicates that this round was based on a valuation of $3.5 billion. Given the FDV of $1.61 billion, the FDV-to-valuation ratio is about 0.46, suggesting that investors in this round are currently at a loss.

Twitter Thread Questions Token Unlock Timing, KOL Payouts, and Marketing Ties

A recent thread by X user 0xCircusLover has drawn attention to a series of unfolding allegations concerning Celestia’s internal operations and token activities. According to the thread, Celestia’s C-suite allegedly had their token allocations fully unlocked in October 2024, with additional team unlocks reportedly occurring later that same month. The user further claimed that Mustafa Al-Bassam, Celestia’s founder, sold more than $25 million worth of TIA tokens through OTC transactions before relocating to Dubai.

The thread also pointed to internal challenges, including the termination of Yaz Khoury, Celestia’s former head of developer relations, following reported sexual harassment cases. The user suggested that further details, including evidence connected to the incident and promotional arrangements, would be disclosed soon.

Additionally, the thread alleged that Celestia made significant payments to key opinion leaders (KOLs), including Andy (@ayyyeandy), Jon Charbonneau, and Bankless, as part of its marketing efforts. The user also claimed that Celestia paid a seven-figure sum to Abstract to facilitate a strategic shift away from Eigen.

Raising broader questions, 0xCircusLover highlighted the active promotion of Celestia by David Hoffman from Bankless. The user questioned the motivation behind such consistent support, particularly as David is not a direct protocol builder or end user.

Mustafa Defends Celestia: “We’re Here to Play the Long Game”

While these allegations remain unverified at this stage, the situation has sparked ongoing discussions within the community. Key figures linked to the project have publicly addressed the claims.

Mustafa dismissed the accusations as baseless FUD, reaffirming that Celestia’s founding team, early employees, and core engineers remain committed to the project.

“I’ve been in crypto since 2010 and it’s not new to me that you have to have a thick skin and eat gravel to survive, as all tokens have their 95% drawdown at some point in their lifecycle,” he said.

Mustafa also emphasized that Celestia is financially prepared for the long term, stating that the project has a $100 million-plus war chest and over six years of runway, allowing it to play the long game for as long as necessary.

Jon directly refuted the allegation that he and Bankless received payments from Celestia, calling it “just a lie.”

David clarified that he only purchased TIA tokens on February 26, 2025, apart from the initial airdrop, and fully disclosed this on the Bankless website. He noted that he sold his TIA holdings on May 30 and emphasized, “Bankless nor myself have ever been paid any money by any team for undisclosed coverage of anything.”

The Celestia Allegations: A Story Still in Progress

As the situation continues to unfold, the Celestia community remains divided. While key figures have publicly addressed the allegations, many in crypto space are watching closely for further disclosures and potential developments. For now, the contrasting experiences between early investors and those who entered later highlight the ongoing risks and complexities of participating in volatile token ecosystems.