TIA is likely an amazing bull market hold and be an extremely bear market loser.
People will start to derisk once they realize the valuation doesn’t make sense and airdrops get diluted, with low reward-to-value ratio. The 21 day unbonding period will make this even a harsher reality, similar to what LUNA faced.
1. Understanding Celestia: Celestia is a foundational blockchain technology that simplifies the launch of new rollups. It's significant because some of these rollups will potentially airdrop tokens to TIA stakers. Given that Layer 1 (L1) and Layer 2 (L2) tokens generally command a premium in the market, this positions TIA as an attractive investment.
2. The Narrative Around $TIA: There's a growing belief in the crypto community that the price of TIA is secondary to the value of the airdrops it could potentially yield. This belief is reinforced by instances where airdrops like $DYM have already covered the cost basis for TIA at certain market prices, essentially making the initial investment in TIA self-liquidating if one chooses to sell the airdrop.
3. Similarities to Past Crypto Trends: The concept of “(3,3)” in cryptocurrency refers to a cooperative game theory mechanism that encourages holding and staking, which was popularized by the OlympusDAO project with its OHM token. TIA's potential mirrors this trend, with a focus on airdrops rather than high yields. The cycle of increasing airdrops, leading to higher demand for $TIA, and in turn, more staking and more airdrops, creates a reflexive cycle that can drive the price of TIA. This cycle is further reinforced by the increase in delegators, indicating a correlation with TIA's price.
4. Investment Strategy and Future Outlook: The price trajectory of $TIA is anticipated to be heavily influenced by ongoing airdrops and market narratives. The valuation of TIA is complex, factoring in the future value accrual to the Data Availability Layer, memetics, narrative, and expectations of future airdrops. However, the primary driver seems to be the airdrop narrative, where the actual valuation of TIA becomes secondary to the potential gains from airdrops. This perspective resonates with previous crypto trends where investment decisions were driven more by narrative and less by fundamental valuation. As a result, $TIA could become a lucrative investment during bull markets but might pose risks during bearish trends, especially considering factors like the 21-day unbonding period which could exacerbate price volatility during market downturns.
Always DYOR and plan effective strategies, for your own desired portfolio!
