Polychain Capital Makes Over $80 Million in Profit from Celestia (TIA) Staking

Polychain has made huge profits from Celestia staking

Polychain Capital, one of the leading venture capital funds in the blockchain space, participated in Celestia’s Series A and B funding rounds in 2022, investing approximately $20 million. Instead of selling their holdings of native TIA tokens, Polychain leveraged Celestia’s staking mechanism – a layer 1 modular blockchain focused on providing data availability solutions.

According to sources, Polychain used five wallets to sell staking rewards, raising over $80 million, achieving a return on investment (ROI) of more than 4x without touching the original tokens. This shows that Polychain effectively leveraged Celestia’s Proof-of-Stake (PoS) model, where token holders can lock up TIA to help secure the network and receive rewards, while maintaining long-term ownership of the underlying investment.

Celestia is the first modular blockchain, separating consensus, transaction execution, and data storage functions to enhance scalability. With a PoS mechanism, Celestia issues approximately 8% of the total TIA supply annually as staking rewards, equivalent to $127 million at current prices.

These rewards are unlocked immediately, allowing stakers like Polychain to sell them without affecting the original tokens locked up. This model is particularly attractive to venture capitalists, as they can generate cash flow from the rewards while retaining the long-term appreciation potential of the TIA token.

However, this also raises concerns about selling pressure from large investors, especially as TIA price has dropped 93% from its all-time high of $20.96 to around $1.44 in June 2025.

Will the succumbed staking model return?

Celestia's token economic model, with an 8% annual inflation rate and instantly unlocked staking rewards, offers great benefits to investors like Polychain, but also poses the potential to put selling pressure on the token price.

TIA’s 93% drop from its high points highlights the challenges of maintaining token value as supply rapidly increases and large investors sell staking rewards. Co-founder John Adler’s proposal to switch to a Proof-of-Governance (PoG) model, which would reduce the inflation rate to 0.25% and eliminate staking, may be an attempt to address this issue.

However, implementing this new model requires complex restructuring and may face opposition from advocates of on-chain blockchain purity. If successful, the PoG model could help Celestia build a more sustainable token economy, but community confidence is being tested by token sales by major investors and project teams.

Evaluation and Conclusion

Polychain Capital’s success in raising over $80 million from Celestia staking rewards without selling its native token is a testament to the profitability of PoS models in the cryptocurrency market. However, it also highlights the challenges of Celestia’s token economic model, especially the inflation and selling pressure from large investors. While Polychain has demonstrated ingenuity in its investment strategy, the crypto community is still debating the sustainability and fairness of this model. With the Proof-of-Governance proposal and upcoming technological upgrades, Celestia has the opportunity to reshape its ecosystem, but restoring community trust will be key to ensuring long-term growth. For investors, participating in Celestia requires careful consideration of staking returns and market risks, while closely monitoring developments related to the project’s token economic model.

Disclaimer: The information presented in this article is the author's personal opinion on the cryptocurrency field. It is not intended to be financial or investment advice. Any investment decision should be based on careful consideration of your personal portfolio and risk tolerance. The views expressed in the article do not represent the official position of the platform. We recommend that readers conduct their own research and consult with a professional before making any investment decisions.

Compiled and analyzed by HCCVenture

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