Mustafa Al-Bassam, co-founder of Celestia, emphasized that despite escalating accusations, including misconduct, insider profiteering, and community distrust, the team remains committed and financially well-prepared to weather the storm.
Al-Bassam noted in a post on the X platform released on Monday: "Despite the increasingly absurd FUD, all Celestia founders, early employees, and core engineers are still on the job and working as hard as they did when Celestia was founded five years ago."
He stated that the significant token pullback is a common phenomenon in the industry. He further added that Celestia (TIA) has strong long-term growth potential and emphasized that the project has "over $100 million in reserves and a six-year operational cycle."
These responses came amid criticism from token holders and independent researchers, who accused the Celestia team and insiders of heavily selling TIA tokens while retail investors endured a 95% drop in token value.
Al-Bassam's post was likely a response to sharp criticism from Startup Anthropologist on the X platform. This post, which attracted over 200,000 views, accused the Celestia team of collusive financial misconduct.
The post claimed: "All C-level executives will have their tokens unlocked in early October 2024… Mustafa sold over $25 million worth of tokens through OTC trades and moved to Dubai." The article further pointed out that several well-known individuals promoted TIA tokens for compensation, while team members quietly sold their holdings.
X platform user Shrutebuck criticized the timing of the unlock. He stated: "They rewarded early investors and themselves at the expense of retail interests, and then complained online about 'absurd FUD' when the token dropped 98%."
Criticism also targeted Celestia's token unlock plan. Another X user questioned: "Why set up a token unlock plan that lasts 3/4 years? I believe in $ETH and a few other cryptocurrencies… but I don't trust those who unlock all supplies in three years."
Criticism of Celestia is not new. In May of this year, investor Larry Sukernik described Celestia as a cautionary tale, pointing out its attempts to force market appeal through narrative and marketing. He noted that application chains and vertical integration can only succeed with a loyal user base, which Celestia may lack during its scaling process.
"The problem is that there aren't enough applications with product-market fit (PMF) that are motivated to pursue vertical integration," Sukernik stated, noting that Celestia's timing for market promotion was poorly chosen.
In response, Al-Bassam stated that Celestia launched before Rollup became the core technology for blockchain scaling, so the team could not foresee how large the "Rollup industry complex" would grow.
He defended the project's relevance, mentioning that over 30 Rollups are already deployed on Celestia and claimed it controls about 50% of the data availability (DA) throughput market. "We are basically the default choice for alternative data availability solutions today," he said.
Nevertheless, Sukernik questioned whether Celestia entered the DA field too early, considering that demand from Rollups is still in its infancy. He believes that while Celestia has market share, it may not translate into real economic appeal.
As of the time of publication, Celestia's TIA trading price was $1.61, up 14% in the past 24 hours. However, the token has pulled back over 92% from its all-time high of $20.91 set last June.
Related: Amid price drops due to geopolitical concerns, Strategy purchased 245 Bitcoin (BTC) for $26 million.
Original article: “Celestia Founder Defends Team Amid Dumping Allegations, Showcases $100 Million 'Ammunition Reserve'”
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