Polychain Capital invested around $20 million in modular blockchain network Celestia, but has made over $80 million worth of Celestia’s native TIA tokens solely from selling staking rewards.

According to Pavel Paramonov, founder of blockchain research firm Hazeflow, this means they realized a return of more than four times its initial investment from staking rewards alone, without selling their original investment stake in Celestia.

This story is an excerpt from the Unchained Daily newsletter.

“Any chain that allows insiders to earn emissions on locked tokens is optimizing insider/VC profits over product success,” commented Columbia University blockchain professor Omid Malekan on X.

“I am all for VCs maximizing LP profits, but if you participate in such an arrangement save me the BS about believing in the project. You don’t.”

Polychain was founded in 2016 by Olaf Carlson-Wee, known for notable investments in companies like Coinbase, Tezos, and Compound. It manages around $5 billion in assets as of June.