The Celestia token made the news last week when they did their airdrop to about 580,000 eligible participants. After a period of market consolidation, the Token price popped off alongside other altcoins, registering 27.6% in the past 24 hours and 121.4% in the past 7 days.
While many airdrop recipients smile at the gains, many still do not understand what Celestia is and how it works.
What is Celestia?
Celestia is a layer-1 blockchain that comprises a consensus layer and a data layer, which exist separately. This provides security for the blockchain. Celestia’s main selling point is that they allow other companies to run their execution layers (aka networks) atop Celestia’s mainnet.
Celestia’s native token is TIA. As a layer 1 blockchain, TIA is good for staking rewards, securing the network, paying for blob space, and is the official gas fee token of the network. This gives TIA a lot of utility that has probably been the propelling factor to its recent rally.
The demand for Celestia network’s service arises from a problem around data availability in the blockchain space.
Data Availability is a Major Hindrance to Scaling Blockchains
In a talk by Vitalik Buterin on the Future of Ethereum, the Ethereum founder discussed the challenges of scaling blockchain, and one of the major hurdles was data availability. Vitalik notes that data unavailability poses a risk of attack for blockchains. It can lead to accepting invalid blocks and prevent knowledge of certain account states.
In development for over 4 years, Celestia devised a solution to this problem. Celestia guarantees data associated with transactions, smart contracts, and other activities in the network.
Developers who build on Celestia can customize their stacks, separating execution and settlement layers.
Celestia accommodates EVM chains, ensuring developers can easily bridge Ethereum and Celestia. Furthermore, the network also supports Solana and Cosmos, the two other largest DeFi networks apart from Ethereum.
TIA Coin Price Analysis and Prediction
TIA hit the market at around $2.00 and stagnated at this price for some time. The airdrop was done nicely and timed when the market was bullish on Bitcoin. After breaking out from a descending triangle, the asset pulled a +141% rally.
Depending on Bitcoin’s behavior, TIA is due for a correction back to the 0.5 – 0.618 Fibonacci level. This would cost around $3.87 – 4.25, an excellent range for those who missed out on the run to load their bags.
TIA is expected to run even higher after this. While there are 1 billion coins in total supply, only 174 million are in circulation, and 25 million are not readily tradable. This circulating supply is expected to remain like this for the next 1 year before inflation kicks in.