Celestia’s Matcha Upgrade: Can TIA Become Deflationary in 2025?

Celestia’s Matcha upgrade and Proof-of-Governance (PoG) proposal, announced for October 2025, aim to slash TIA’s inflation to 2.5% and potentially as low as 0.25%, sparking hopes of a deflationary shift for the modular blockchain’s token. With enhanced blockspace and new revenue streams, these changes could redefine TIA’s role in decentralized finance, despite trading 93% below its all-time high. As of September 25, 2025, this guide unpacks the upgrade’s impact, PoG’s potential, and risks for crypto enthusiasts eyeing Solana’s data availability leader.

###What Is the Matcha Upgrade and How Does It Impact TIA?

The Matcha upgrade, under CIP-38 and CIP-41, boosts Celestia’s block size to 128MB, optimizes propagation, and cuts annual inflation from 5% to 2.5%, tightening TIA’s 1.9 billion token supply for long-term holders. By expanding blockspace for rollups and removing IBC/Hyperlane barriers, it strengthens Celestia as a data availability (DA) hub, potentially increasing DA fees to support TIA’s value. In real-world terms, this enables cheaper, faster rollup transactions—think Layer-2 scaling for DeFi apps—on compliant platforms prioritizing fund safety. With $1.7 billion in TVL, Celestia’s upgrade aligns with 2025 trends toward modular blockchains, enhancing wallet security for stakers.

• Inflation Cut: From 5% to 2.5%, reducing new TIA issuance significantly.
• Blockspace Boost: 128MB blocks increase rollup capacity, driving DA demand.
• Revenue Potential: Fees from rollups could stabilize TIA’s economics long-term.
• Ecosystem Growth: Supports 35+ rollups, up 20% since Q2 2025, per DefiLlama.

###How Proof-of-Governance Could Make TIA Deflationary

The PoG proposal could reduce TIA issuance to 0.25% annually—a 20x drop—potentially turning it deflationary if DA fees or new streams like ecosystem stablecoins outpace issuance, per Kairos Research. This shift, likened to ICANN’s resilient decentralization by co-founder Mustafa Al-Bassam, uses community governance to align token value with network utility without centralizing power. In practice, this could mirror burn mechanisms in DeFi, where fees from $2.5 billion in annual rollup volume reduce supply, boosting scarcity. For blockchain users, PoG offers a governance model to stake TIA securely on transparent platforms, tapping into 2025’s low-inflation token trend.

• Issuance Slash: 0.25% target could achieve net deflation with $10M monthly fees.
• Governance Edge: Verifiable light nodes ensure validator trustlessness, enhancing security.
• Revenue Streams: Stablecoin or DAT fees could flip TIA’s inflationary narrative.
• Community Role: Approval needed for PoG, with $100M treasury backing burns.

###What Are the Risks and Price Outlook for TIA in 2025?

Despite optimism, TIA trades at $12.50, down 93% from its $180 February 2024 peak, with bearish RSI (28) and MACD signaling short-term outflows, per BeInCrypto data. Past airdrop hype and ongoing venture unlocks—15% of supply since 2023—have fueled volatility, with X posts calling TIA’s chart a “pain trade.” Execution risks loom: PoG needs community buy-in and robust DA fee growth, while rivals like EigenDA’s $3B TVL challenge dominance. If rollups scale to 50+ by Q1 2026, TIA could hit $20-$25; failure risks a drop to $8 support, testing secure wallet strategies on compliant exchanges.

• Price Levels: $12.50 current, $15 resistance, $8 support if bearish momentum persists.
• Volatility Source: 5M TIA unlocked monthly, diluting price until burns activate.
• Competitive Threat: EigenDA’s lower fees could siphon rollup volume.
• Upside Catalyst: 50+ rollups by 2026 could drive $50M in DA fees, lifting TIA.

In summary, Celestia’s Matcha upgrade and PoG proposal position TIA for a potential deflationary shift in 2025, leveraging modular blockchain strengths amid Solana ecosystem growth. Monitor price action on BeInCrypto or stake TIA via Phantom wallet for governance, and track rollup data on DefiLlama for DeFi trends—stay vigilant for transparent execution to navigate TIA’s volatile path.