Celestia's PoG proposal and team trap cashing controversy

The Celestia network has recently fallen into a community opinion crisis. Against the backdrop of the continued decline in TIA token prices and the gradual marginalization of the project narrative, the network's revenue is sluggish, and the feasibility of the data availability track is also facing doubts. It is under these circumstances that the co-founder of Celestia proposed a disruptive governance proposal.

The founder proposed that the network should completely abandon the current proof-of-stake mechanism and instead adopt a "governance proof" model. This proposal sparked heated discussions in the crypto community as soon as it was put forward, directly addressing the core concept of blockchain governance structure.

If the proposal is approved, the Celestia network will undergo a series of significant changes: first, the issuance of TIA tokens will be drastically reduced by about 20 times, and the inflation rate will be lowered by 95%. Second, the existing delegated staking and liquidity staking contracts will be completely abolished, and the on-chain governance mechanism will also be terminated.

The newly issued TIA will be entirely used to reward validators running nodes. The election of validators will no longer rely on token voting, but will be determined through an off-chain governance mechanism. In addition, Celestia will adopt a fee-burning mechanism, where approximately $100-300 of protocol revenue will be directly used to support the value of TIA.

This proposal is essentially aimed at alleviating the inflationary pressure of the TIA price's long-term decline by constructing a more scarce and compact token economic model, injecting fundamental logic for the network's long-term value.

However, just as this governance proposal aimed at "rebuilding the token economic foundation" has yet to be implemented, the community has seen a series of reports regarding the Celestia team's large-scale cashing out, leading to divergent interpretations of the proposal's original intent. On one hand, the project party emphasizes that the new model is expected to curb inflation and repair the token model; on the other hand, on-chain data shows that several core team members quickly completed large cash-outs after the unlocking window opened, with a cumulative cash-out exceeding 100 million dollars, raising market skepticism.

Some community users have accused the Celestia core team of serious opacity in multiple areas such as token unlocking, fund operations, and market promotion. According to their disclosure, Celestia executives completed the unlocking of TIA tokens as early as the beginning of October last year, and subsequently, several core figures successively realized large cash outs through over-the-counter transactions or resource swaps.

In addition, the user mentioned that Celestia had paid a large sum of money to a certain organization in exchange for its "separation" from competitors, and had paid journalists to maintain a positive image of the project. This series of financial operations has been accused of being a typical operation of "paid promotion."

An internal team token distribution and monetization data sheet provided by a crypto KOL shows that team members have sold a total of approximately 9.43 million TIA, with an estimated cumulative cash amount reaching as high as 109 million USD at the then market price. The largest sell-off address has sold over 2.6 million TIA, corresponding to approximately 27.37 million USD.

Although Celestia's current valuation is marked by outsiders at 3.5 billion dollars, its actual revenue is far from supporting such inflated valuation. Public data shows that Celestia's average daily protocol revenue is less than a hundred dollars, with an annualized potential of around 5 million dollars. Industry insiders generally believe that Celestia's market pricing is more like a premium advance for "future narratives" rather than being based on existing usage data or business models.

In the face of various accusations and public opinion turmoil, the founder of Celestia publicly stated that all core members are still on duty and revealed that they currently have over $100 million in capital reserves, which can support operations for more than 6 years. He believes that in this industry, almost all tokens will experience a 95% crash at some point, which is the norm rather than the exception. Currently, TIA has fallen 92% from its peak.