Celestia’s Matcha Magic Kicks In With Huge Inflation Cut

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Can the modular blockchain’s native crypto token turn the tide from inflationary to deflationary? Researchers at Kairos Research argue that this is plausible on a few conditions. Firstly, TIA’s highly-anticipated Matcha chain upgrade has to land on the mainnet after consecutive tests on Arabica & Sepolia testnets.

Celestia’s Supply Cut Fuels Double-Digit Hopes

Then, the new scale block size will be enlarged by 16 times, enabling the 2.5% inflation cut via the high-throughput propagation mechanism. This revamp strengthens long-term success traits like interoperability, scalability & cross-chain compatibility without compromising security or the modular chain’s original functionality.

Most likely, Celestia’s (TIA) Matcha will drop on the mainnet in October, but the developers have been hammering away to reduce the inflation rate all along. Indeed, TIA network started off with a pretty intense token unlock schedule, programmed to decline by roughly 10% every year until all Celestia (TIA) tokens are circulating.

Is Matcha Finally Turning Celestia Deflationary?

A part of this was activated during the Lotus mainnet upgrade, which managed to cut Celestia’s (TIA) inflation from 7.2% to 5.0% quickly. Simultaneously, the inflation rate was adjusted to 6.7% each year, while the popular blockchain’s native coin inflates roughly 5% per year with the TIA’s present tokenomics, according to Kairos Research.

Henceforth, these improvements could serve as the catalyst for Celestia’s (TIA) price rebound if the trading volume picks up. Right now, the Spot market trades look average at just above $200 million, while altcoin’s popularity on Futures markets remains slightly bigger at $336 million recorded this Thursday, according to CoinGlass analytics.

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People Also Ask:

What is the Matcha upgrade for Celestia?

Matcha (v6) scales to 128MB blocks, boosts throughput to 1 GB/s, and enhances IBC/Hyperlane bridging, set for mainnet in late September 2025.

How does Matcha impact TIA’s inflation?

CIP-41 cuts inflation from 5% to 2.5%, tightening supply and boosting TIA’s appeal as decentralized finance (DeFi) collateral.

Can TIA become deflationary with these changes?

Proof-of-Governance (PoG) could drop inflation to 0.25%, potentially making TIA deflationary if roll-up DA fees outpace issuance.

How’s the market reacting to this update?

TIA jumped 26% to ~$1.56 in July, hitting $1.81 (+5% daily). Breaking $2.25 could spark $3–$4 rallies, while $10 remains a long-term goal.

What are the risks or next steps?

Delays, EigenDA competition, and low TVL ($2.3M) pose risks. PoG approval and rollup growth (30+ active) are critical for deflation.



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