Celestia’s Matcha Upgrade: Can TIA Dominate the Next Bull Run?
With the proposed Proof-of-Governance (PoG) and the Matcha upgrade, Celestia is about to enter a critical phase. TIA may become a potentially deflationary asset as a result of these technological advancements and a reorganization of tokenomics. So, can TIA make a significant impact in the upcoming years, given the fast-growing ecosystem and growing community expectations?
Celestia’s Matcha Upgrade: TIA Inflation Cut in Half and Blockspace Expanded
According to Celestia’s official announcement, the Matcha upgrade will increase block size to 128MB, optimize block propagation, and improve performance under proposal CIP-38. More importantly, the CIP-41 proposal reduces annual inflation from around 5% to 2.5%, directly tightening TIA’s circulating supply. This change makes TIA more attractive to long-term investors and strengthens its role as a potential collateral asset in DeFi.
Beyond supply dynamics, Matcha also expands available ‘blockspace’ for rollups and removes token-filter barriers for IBC/Hyperlane. This positions Celestia as the central data availability (DA) layer for other chains. This lays the foundation for new revenue streams, as DA fees from rollups could be channeled to support TIA’s value in the future.
Can PoG Turn Celestia’s TIA Into a Near Zero-Inflation Asset?
The Proof-of-Governance (PoG) idea is the next crucial milestone. PoG could cut yearly issuance to just 0.25%, claims Kairos Research. This is a twenty-fold reduction from the present levels. The revenue threshold needed to cause TIA to enter a net deflationary state is quite low, given the steep drop in issuance.
Our analysis shows that TIA can potentially transition from an inflationary token to a deflationary, or near zero-inflation asset under the right conditions,
Kairos Research
The recent downward correction in TIA’s price is a reflection of short-term negative technical indicators such as the RSI, MACD, and net capital outflows. TIA is currently trading more than 93.22% below its February 2024 ATH, according to CoinMarketCap data. The market is still generally negative due to this volatility.
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