Polychain Sells $62.5M Stake to Celestia Foundation

Polychain Capital, a prominent player in crypto ventures, has sold its remaining stake in Celestia, as announced by the Celestia Foundation on Thursday. This marks a notable exit for one of the early supporters of the modular blockchain network. The foundation repurchased $62.5 million worth of TIA tokens from Polychain, pricing the sale at approximately $1.44 per token, reflecting its trading value from early July. The foundation plans to reallocate these tokens to new investors, through a rolling unlock schedule from August 16 to November 14. As of now, TIA has dipped about 5.2% to around $1.86, down from an all-time high of nearly $20 earlier this year. This divestment follows criticism aimed at Polychain for their significant sales of liquid TIA staking rewards, despite their initial allocations being locked. Some analysts estimated that the firm may have sold as much as $242 million in TIA since its inception, with approximately $179 million coming from staking rewards and a mere $20 million initially invested in Celestia during its Series A and B rounds. In response, Celestia’s upcoming v4 mainnet upgrade, dubbed "Lotus," will implement changes in how staking rewards are managed. This includes reducing issuance and allowing direct interoperability of TIA for rollups. After the upgrade, staking rewards will be proportionally locked based on the unlock schedule of the associated tokens; for instance, a vesting wallet that has 50% of tokens locked will only claim 50% of staking rewards. Accounts with delayed vesting will have both the locked tokens and staking rewards secure until their respective unlock dates. The Celestia Foundation declined to comment, and Polychain Capital was not immediately available for further insights.