(3,3) of the new cycle? The “Ponzi expectation” of TIA’s pledge airdrop model

“The price of TIA doesn’t matter because airdrops make up for it.”

Written by:****@TaikiMaeda2

Compiled by: Luccy, BlockBeats

Editor’s note:

*TIA’s re-staking and DYM’s airdrop are undoubtedly one of the hottest topics in this bull market, and various re-staking track projects have also received attention. People who missed DYM are eager to search for re-pledge projects to obtain potential airdrops in addition to FOMO. In response, @TaikiMaeda2, founder and CEO of cryptocurrency research company HFAresearch, posted a long post on the social media platform expressing his thoughts on TIA. *

@TaikiMaeda2 believes that TIA’s re-hypothecation narrative and short-selling expectation development are similar to OHM. Since buyers will become increasingly insensitive to price due to airdrop expectations, TIA will fall into a (3,3) situation. @TaikiMaeda2 pointed out that one day, staking TIA will become meaningless, but at the same time he also believes that it has not reached that point yet. BlockBeats compiles the original text as follows:

Why would TIA be (3,3) for this period?

This is going to be a long thread, but I hope it will be an interesting read for those who study cryptocurrency Ponzi economics, human greed, and the laws of market bubbles. So let’s get started.

This article will be divided into 4 parts:

• What is Celestia?
• What is the narrative surrounding TIA?
• What are the similarities between TIA and (3,3)?
• What am I doing to prepare for this?

Before you get mad at me, let me clarify that I am not saying Celestia is a Ponzi scheme. In fact, I think this is one of the most important technological advancements we’ve seen in a long time.

TLDR: Celestia makes it easier, or cheaper, for new projects to deploy new rollups and blockchains.

For example, @MantaNetwork saved over 99% by using Celestia for data availability (DA) instead of Ethereum. These substantial cost savings bring real benefits to users.

Here is another resource to help you understand it better. Since I don’t want this article to be too long, I will continue to discuss the narrative behind the TIA token and what caused the crazy price surge since the November TGE.

I believe TIA is the purest way to understand the 2024-25 airdrop story. We have been informed of two airdrops by TIA stakers (@Sagaxyz__ and @dymension), with more airdrops confirmed, such as @MantaNetwork.

Celestia makes starting a new rollup easier. Some rollups will be airdropped to TIA stakers, and L1/L2 tokens have a premium in the market.

Therefore, we see the narrative forming: “It doesn’t matter what the price of TIA is, because the airdrops more than make up for it.”

For example, my DYM airdrop has covered the cost basis of my $4 TIA investment in @aevoxyz. Therefore, if I choose to liquidate my airdrop, the position has already paid for itself. I’m not going to do that, but that’s a topic for another discussion.

As you can see, this is probably a reflexive loop. As more airdrops occur, we should see more demand to purchase and stake TIA for future airdrops. We have seen an increase in the number of principals, which is closely related to the price of TIA.

Staking TIA tokens also aligns with my view on returns on alt-L1 trades that have been much talked about. Instead of trying to pick L1/L2 tokens in the upcoming cycle, why not just stake TIA and passively receive airdrops?

For most people, this is a psychologically comfortable narrative.

I also observe some similarities in the Solana/Cosmos perspective. During the bear market, many teams have been developing and raising significant funds from venture capital firms. Some of these teams will airdrop to stakers of ATOM, OSMO, TIA, which will further strengthen this narrative.

But what makes it (3,3) of this loop? Here’s the progress:

The market sees a large number of airdrops (i.e. DYM) · The market anticipates more airdrops · People dream about the size of these airdrops · Buyers become increasingly insensitive to price in anticipation of airdrops.

We can simplify TIA’s market pricing to this general function: TIA’s valuation = future value of the DA layer + meme + narrative + future expectations for TIA stakers’ airdrops. But honestly, no one knows what to say about this.

So naturally, our brains simplify to the airdrop narrative. If we can stake $1,000 and get over $1,000 in airdrops, who cares what TIA’s valuation is, right?

Does this sound familiar?

“OHM prices can go up 99%, but you’ll be fine because the APY will make up for it.”

“TIA’s price doesn’t matter because airdrops make up for it.”

These are two completely different projects, but there are similarities in the narratives. It has the characteristics of a future bubble.

Besides, other industries also like airdrops, so why not?

After all, the promise of turning $100 into $100,000 sounds amazing. Look at these little pictures and the number of views! People demand these videos, which in turn motivates YouTubers or TikTokers to provide these videos.

“But Taiki, you’re making these videos too!”

Yes, but Celestia just launched two months ago and we only had two airdrop snapshots live. I expect more in 2024-25. There will come a time when staking TIA will become meaningless, but I don’t think we are there yet.

A profit-oriented person recognizes this, if only we choose to participate “early enough”. This is not unreasonable. I believe TIA is one of the most important innovations of this cycle, but that doesn’t mean it’s prone to bubbles.

I also write this to remind myself to be humble in my profits in the future, even if the narrative feels impenetrable. Here is my take on TIA price action over the next cycle (I drew this in 30 seconds):

I believe TIA will be an amazing asset during a bull market, but it will also be an extremely painful asset during a bear market. Once people realize that valuations don’t make sense and airdrops are diluted, they will start closing their positions. The 21-day unbundling period will make this reality even more stark.

So, what’s the plan?

I stake TIA, I will hold some airdrops, and I will also sell some airdrops. When do I sell a TIA? I honestly don’t know. My current plan is to start closing my TIA positions once Coinbase hits #1 in the Apple App Store, or when major companies start hitting ATH.

This article was written on January 13, 2024. If you read this article in the future, my opinion may change. I could also be terribly wrong, but that’s the risk of putting my thoughts out there on the internet.