Celestia suspected of "pumping up shipments" and packaging the sale of coins as financing on the eve of a large amount of unlocking

Original title: "Celestia is suspected of "pushing up and selling" by packaging coin sales as financing on the eve of large-scale unlocking"

Original author: Xiyou, ChainCatcher

Recently, the highly-watched modular blockchain Celestia has fallen into a crisis of trust. "The disclosed $100 million financing is actually OTC coin sales, and it was announced during the countdown to large-scale unlocking." This series of confusing operations has pushed the modular public chain leader Celestia to the forefront.

The community questioned Celestia's behavior, and it may have been a conspiracy with VCs or institutions to take the opportunity to "pull up and sell" the coin price. A few days before the unlocking, the proceeds from the OTC coin sales were announced as financing news to create a positive, and information manipulation and other means were used to guide retail investors to take over, thereby seeking personal gain.

In the community's view, the Celestia Foundation failed to make the necessary transparent disclosure of this OTC transaction, but instead packaged it as financing news, which misled investors and triggered a crisis of trust.

However, as of press time, Celestia has not responded to this incident.

The countdown to unlocking TIA worth $1 billion, the announcement of "$100 million financing" is good news or suspected of pumping and dumping

On September 24, the Celestia Foundation publicly announced that it had completed $100 million in financing. This round of financing was led by Bain Capital Crypto, and Syncracy Capital, 1kx, Robot Ventures, Placeholder and others participated in the investment, and wrote that this brought the total amount raised for the project to $155 million.

After the good news was released, Celestia's native token TIA rose in response. On the same day, the coin price rose from $5.6 to $6.9, an increase of more than 20%. It has now fallen back to around $6.5.

However, just as the crypto community was celebrating Celestia's huge financing, well-known crypto investor Sisyphus revealed on the social platform that the $100 million financing announced by Celestia was actually an over-the-counter transaction directly reached by the foundation with several institutions a few months ago. The financing valuation was $3.5 billion at the time, and these token shares may be unlocked in October.

Sisyphus also added that if institutions can sell all unlocked assets at a price of $7.5, they can break even.

Sisyphus's real identity was revealed by users to be Kevin Pawla, the former head of OpenSea Ventures.

After Sisyphus's remarks, the originally favorable financing news changed. In the community's view, Celestia's $100 million financing was actually the proceeds from OTC coin sales a few months ago, but it was packaged as new financing and disclosed when the unlocking expired.

This series of operations angered users in the crypto community. The community generally believes that the foundation or team should not disclose OTC over-the-counter trading proceeds as new financing, and should not release packaged fundraising news on the eve of a large unlocking, which is suspected of inducing users to buy and increase shipments.

According to Token unlock data, Celestia will unlock more than 175 million TIA tokens on October 30, accounting for 17.68% of the total supply of TIA, worth about $1.08 billion. This is likely to cause a sharp increase in the circulation of TIA in the market, which will in turn cause short-term price fluctuations. According to historical data, large-scale token unlocking events often put downward pressure on the price of the currency.

The over-the-counter transaction that was originally completed several months ago did not release a press release related to fundraising until one month before the token unlocking. The motivation behind this cannot help but make people suspect that the project party or institution wanted to take the opportunity to increase shipments.

In fact, as early as September 7, Sisyphus posted a message on his social media to remind that Celestia had completed an over-the-counter transaction of $100 million, and the currency price was about $3.5. The team and investors will unlock $1 billion in funds in the next six months.

However, the content of Sisyphus's tweet was not paid attention to by the community until Celestia officially announced its financing on September 24.

Crypto KOL @Ericonomic posted on social media that if what Sisyphus said is true, Celestia's $100 million financing event may be another game played by the project party and VC institutions. A few months ago, when the token price was high, the project party sold it to institutions through OTC, and waited until a few days before the unlocking to release the so-called financing news, making users think that the financing had just happened. These institutions that bought tokens through OTC transactions are currently very optimistic about the project and blindly follow up.

In this regard, community user @minjung has a different view. He believes that Celestia's trading in the secondary OTC market is not a bad thing. Direct cooperation with venture capital trading institutions will help mitigate the impact of huge token unlocking. Institutions such as SyncracyCapital, 1kx, and Robot Ventures are likely to be hedging. If it is indeed obtained in the secondary market, it is inappropriate for Celestia to announce the transaction as financing, especially before the major unlocking.

For Celestia's financing storm, the main point of contention in the community is that the project party should explain the source of funds for financing.

In addition, OTC transactions are very common, and there is no problem in announcing it before unlocking. However, the project party can fully announce the funding information in a reasonable and transparent manner, disclose the project valuation and fund ownership, clarify that this is OTC trading rather than financing, and disclose the relevant situation to investors, rather than taking concealment and misleading means to deceive users.

However, as of September 27, Celestia has not officially responded to the financing storm. ChainCatcher has not received any response to the official verification of the community's disclosure of financing.

Is Celestia's valuation out of touch with revenue?

Celestia's modular infrastructure designed for the Data Availability Network (DA) can reduce data costs by 99.9% compared to the Ethereum mainnet, the largest DA layer in the industry. The project caused market frenzy in February this year due to the TIA token airdrop, and the price soared to more than $21, once known as a new crypto blue chip project. As the Layer2 narrative cooled, the price of TIA also began to fall from its highs, falling to as low as $3.7, a price reduction of 80%.

In addition to causing a crisis of trust in Celestia, this financing storm also revealed the common problem of valuation and actual revenue disconnection in crypto projects.

Although Celestia is valued at $3.5 billion, its potential annual revenue is only more than $5 million, which is far from the actual situation of its business. This huge gap has caused people to re-examine the true value of crypto projects

As early as January this year, there were reports that Celestia's current data usage rate is 0.1%, and the total cost is significantly lower. Celestia generates about 5TIA or $65 in fees per day. If Celestia data is fully loaded in the future and the TIA price is calculated at $13, the network can generate about $5.2 million in annual fee income, which will be 65 times the data currently released to Ethereum.

Blue Fox also published a statement at that time, saying that although Celestia's revenue was only at the level of hundreds of dollars, its diluted market value was very high, which was almost the same as the diluted market value of the head L2 with a more mature ecosystem and an annual revenue of tens of millions of dollars. TIA's diluted market value is currently about 19 billion US dollars, which is not much different from Arbitrum's diluted market value and exceeds Optimism.

Recent data released by Blockwork on August 6 showed that Celestia DA data space consumption hit a record high during the week, that is, the network utilization rate was 1.5%, accounting for 36% of the DA market share, and Ethereum is still the protagonist of the DA market.

The maximum annual revenue of a company with a valuation of billions of dollars is only more than 5 million US dollars, which shows the huge gap between valuation and actual value.

Sisyphus also added in a tweet on September 7 that it is not a good deal to buy a product with a maximum annual revenue of only $5 million at a valuation of $3.5 billion.

Regarding the high valuation of the project, crypto investor Kiki said that at present, the valuation of crypto projects is too dependent on future imagination and ignores the current actual operation. Just like Celestia has proposed a promising data availability network concept, but its technology landing and commercialization still need further verification.

The main reason for this phenomenon is that the crypto industry lacks a mature valuation system. There is no mature valuation system, and the valuation process lacks standards and logic. Compared with traditional industries, the valuation of crypto projects relies more on conceptual imagination, market hype and investor sentiment, and lacks in-depth analysis of fundamental indicators such as actual business such as operating data and profitability.

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