Tokenomi TIA (TIA)

Issuance Mechanism

The native token of Celestia, TIA, was launched with an initial total token supply of 1 billion on October 31, 2023, coinciding with the release of the Mainnet Beta. TIA has no maximum supply and utilizes an inflationary mechanism to reward network participants.

Inflationary Schedule

TIA experiences inflation that is distributed primarily to validators and the Community Pool:

• Initial Inflation Rate: TIA inflation starts at 8.00% annually for the first year.
• Annual Decrease: Starting on October 31, 2024, the inflation rate decreases by 10.00% every year thereafter.
• Long-Term Rate: The inflation rate will hold constant at 1.50% annually starting on October 31, 2039, and onwards.
• Distribution of Emissions: Of the inflationary token emissions, 98.00% goes to reward validators, and 2.00% is directed to the Community Pool to fund ecosystem initiatives.

Allocation Mechanism

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

• Insiders: The combined allocation for Initial Core Contributors and Early Backers (Seed, Series A & B) totals 53.21% of the initial supply.
• Genesis Airdrop: A total of 60 million TIA (6.00% of the initial supply) was allocated to a Genesis Airdrop for developers and onchain addresses on Ethereum, rollups, Cosmos Hub, and Osmosis.

Usage and Incentive Mechanism

TIA serves multiple critical functions within the Celestia modular blockchain ecosystem:

1. Network Transaction Fees (Data Availability)

• Payment for Data Availability (DA): Networks utilizing Celestia for data availability must submit "PayforBlobs" transactions, which require a network transaction fee payable only in TIA.
• Fee Structure: Fees consist of a flat fee plus a variable fee dependent on the size of the data blob. Celestia validators prioritize transactions that pay higher fees.

2. Network Security and Staking Rewards

• Proof-of-Stake (PoS): Celestia operates as a Proof-of-Stake blockchain. TIA holders can secure the network by staking their tokens.
• Validators: Users can operate a validator node. Active validators (an initial set of 100) earn block rewards, which include inflationary emissions and network transaction fees. Rewards are distributed based on a custom commission rate and a pro-rata share of the remaining rewards proportional to the TIA self-staked versus delegated.
• Delegators: Tokenholders can delegate TIA to a validator to share in the block rewards, minus the validator's commission rate.

3. Governance

• Voting Power: TIA stakers can vote on onchain Celestia Improvement Proposals (CIPs) that affect network parameters, such as the percentage of inflationary emissions sent to the Community Pool or how the Community Pool funds are spent.
• Governance Parameters: The voting period is seven days, requiring a quorum of 33.40% of the staked token supply. A simple majority of 50.00% of voting power is needed for approval. A "No_with_Veto" vote exceeding 33.40% will cause the proposal to fail and results in the burning of the TIA deposit associated with the proposal.

4. Medium of Exchange and Gas Token

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

Locking Mechanism and Unlocking Schedule

Celestia's initial 1 billion TIA supply is subject to various vesting and lock-up schedules, although all tokens, whether locked or unlocked, may be staked. Staking rewards, however, are unlocked upon receipt and immediately contribute to the circulating supply.

General Unlock Schedule by Category

The unlock schedules are tied to the token launch date of October 31, 2023:

Upcoming Unlock Events

The following table details the next scheduled daily token unlocks for Celestia, starting from the current date:

These daily unlocks represent a continuous, linear release of tokens for the specified recipient categories as part of their vesting schedules.