TIA shrinks by 70%, Celestia Foundation still raises $100 million in new funding

The innovative team behind the modular blockchain Celestia - Celestia Foundation, recently raised $100 million in a funding round. According to CoinMarketCap data, the project's native token TIA has dropped by 69% since its all-time high in February 2024, but this has not deterred venture capital firms from investing in the narrative of modular innovation.

Who led this round of financing?

The $100 million financing round was led by Bain Capital Crypto, with other participating investors including Syncracy Capital, 1kx, Robot Ventures, and Placeholder. These investors have significant confidence in Celestia's long-term vision and the potential of its modular blockchain network. With this new funding in place, the total funds raised by the Celestia Foundation reach $155 million, providing the project with resources to further develop and implement its blockchain solutions.

Where will Celestia's new funds be used?

While the foundation has not disclosed specific plans for fund allocation, the team emphasizes the focus on developing Celestia's technology. According to a recent roadmap release, the team is dedicated to enhancing the platform's throughput and efficiency. Mustafa Al-Bassam, co-founder of Celestia, elaborated on the foundation's vision: "When Celestia launched as the first modular data availability layer DA last year, it expanded block space from the dial-up era to the broadband era. Now, core developers have proposed a technical roadmap to expand block space to the fiber optic era while maintaining verifiability and low latency."

Celestia focuses on separating different components of blockchain, such as data availability and execution, to make the system more scalable and efficient. This approach helps blockchain avoid bottleneck issues common on L1 blockchains like Ethereum, where all tasks are processed on a single layer.

By moving these processes to different modular layers, Celestia can significantly increase transaction throughput and reduce costs for developers and users.

What is data availability, and why is it important?

Celestia's core advantage lies in its focus on "data availability" DA. In the blockchain world, data availability refers to network participants being able to easily access and verify transaction data without storing all data directly on the blockchain.

This is a crucial feature as it alleviates the burden on L1 blockchains like Ethereum, where the cost and complexity of storing data on these blockchains can be significant. By providing a solution focused on data availability, Celestia offers a lower-cost and more efficient alternative for developers looking to build scalable decentralized applications (dApps) and blockchain networks.

Why has Celestia's TIA token been consistently declining?

Despite undeniable technological progress by Celestia, the market performance of its native token TIA has presented a more complex situation. Following a 2023 airdrop event that distributed TIA to 580,000 users, the value of TIA started to decline significantly since early 2024. The underperformance of the token may also be related to overall market conditions or changes in investor sentiment.