Celestia Update: Bigger Blocks, Lower Inflation, and the Road to a Modular Future
Celestia has been facing significant criticism due to its down-only price action, despite offering great technology and leading the Data Availability (DA) and modular categories. The price of TIA has plummeted from over $20 in February 2024 to an all-time low of around $1.6 this month.
This report provides an update on the state of Celestia over the past few months and addresses some of the criticism, along with how the team has responded.
TL;DR:
Blockspace Keeps Expanding: 128 MB blocks (~21 MB/s) are now live on testnet, as Celestia continues marching toward its 1 GB/s vision.
Lotus Upgrade: Cuts TIA inflation by 33% and enables native cross-chain TIA transfers via Hyperlane.
Ecosystem Growth: 39 rollups are using Celestia for DA, including Converge (RWA L2), Noble AppLayer, Rise Chain, Towns, and more coming soon.
Token Unlock Status: 75% of investor tokens and 50% of team tokens are already vested; the remaining investor unlock ends in October 2025.
Read on!
1. What’s Celestia?
Celestia is a modular blockchain purpose-built for DA, powering unstoppable apps with full-stack control.
Instead of cramming execution, settlement, and DA onto a monolithic chain, Celestia focuses on ordering data and proving its availability, leaving all execution to rollups.
Currently, Celestia and Ethereum are the leading DA providers, together capturing 99.5% of the DA market share.
2. Tech Milestones
Celestia has been shipping relentlessly.
The Ginger & Lemongrass upgrades reduced block time from 12s to 6s and increased block size from 2 MB to 8 MB.
The Lotus upgrade, scheduled for June 2025, will bring three major improvements:
Native TIA interoperability with Celestia rollups and non-Celestia chains via Hyperlane, integrated as a Cosmos SDK module.
Reduced TIA issuance by 33%.
Staking reward lock-up: locked-token stakers can no longer immediately dump their rewards.
The Mamo-1 testnet increases throughput by 16x compared to the current mainnet, reaching 128 MB blocks (~21 MB/s). This marks a major step toward Celestia’s vision of 1 GB blocks.
3. Ecosystem Update
Celestia currently accounts for 50% of the DA market share. However, some have questioned whether this traction is genuine, or if the data is skewed by Eclipse’s high activity.
As of now, 39 rollups are actively using Celestia for Data Availability on mainnet. The top three by activity are:
Eclipse: a SVM L2 on Ethereum
LightLink: an Ethereum L2 focused on simplifying blockchain interactions
Derive: an options and perpetuals exchange deployed as an L2 on Ethereum
Even when excluding Eclipse, the amount of data posted to Celestia Blobs has been steadily growing since January 2024 (see chart below). The Turbo Tap game on Eclipse recently stress-tested Celestia DA's capacity, and it held up well.
More projects have recently announced plans to use Celestia for DA, including:
Converge: An Ethereum L2 focused on real-world assets (RWAs), using the Arbitrum stack and Celestia for DA
Built by Ethena and Securitize
Aims to onboard institutional capital on-chain
Ethena and Securitize's combined TVL exceeds $10B
Mainnet launch: End of Q2 2025
Noble AppLayer: The home for next-gen stablecoin apps
An EVM rollup built on top of Celestia
Noble began as an asset issuance chain, currently issuing over $638M in value, mostly in USDC
Recently launched Noble Dollar (USDN), a yield-bearing stablecoin backed by U.S. Treasury bills, now holding $107M in TVL
CLOB on Blobs: Central Limit Order Books but on-chain, powered by Celestia DA. Several projects are building in this category:
Rise Chain: A low-latency, high-throughput Ethereum L2 that just raised $8M from Galaxy Ventures and others
Hibachi: A private perps trading platform using Succinct’s ZK prover and Celestia for DA
Bullet: Rebranded from Zeta, originally Solana’s first network extension,now purpose-built for trading
4. Tokenomics & Value Accrual
Value Accrual Mechanism
Nick White, the COO of Celestia, explained that they are following “the standard growth playbook in startups: subsidize costs, grow market share, monetize later.”
Celestia fees are almost ZERO, 50x less than Ethereum, 100x less than Solana. The team’s current focus is on capturing market share, not short-term revenue.
Currently, Celestia captures around 40–50% of the DA market share, with Ethereum accounting for the other half.
Tokenomics
The current vesting status:
75% of the investor tokens have been vested; the remaining 25% will fully vest by the end of October 2025.
50% of the team tokens have also been vested, and the remaining tokens will be unlocked gradually until October 2026.
Most tokens are already unlocked, and the VCs who bought $100M of TIA at a $3B FDV are currently underwater, which suggests reduced sell pressure going forward.
5. Final Thoughts
Overall, the tech is strong, and the Celestia team continues to ship at a rapid pace.
If they can keep expanding their market share, there's a strong chance they’ll eventually find a sustainable way to drive value back to the TIA token.