Celo is a mobile-first Proof of Stake blockchain with smart contracts and native stablecoins.
Celo's open platform aims to expand access to financial services to anyone in the world with a smartphone. In order to increase adoption of the protocol, the Celo Foundation created the Celo Alliance for Prosperity to bring organizations together and spread the shared vision of making digital assets more accessible and useful in the real world.
cLabs, a team working on Celo, is building new blockchain software, core libraries that run on that blockchain, and end user applications, including a wallet app that communicates with that logic.
Because Celo aims to provide access to financial services to anyone with a smartphone, their key innovation is the ability to send digital currency directly to a person’s phone number, rather than a blockchain address. Celo maintains a secure decentralized mapping of phone numbers that allows wallet users to send and receive payments with their existing phone contacts. If someone hasn’t yet registered on the Celo network (i.e. they haven’t yet proven that they own their phone number), the crypto-assets are held by the protocol until they verify themselves, which will allow end user organic growth.
The main participants in Celo’s network economy are validators, validator groups, CELO holders, and full node operators.
The election process for the active uses the D'hondt method to choose representatives, iteratively selecting a validator from the group with the most votes as a proportion of total votes until all slots are filled. In practice, this process results in a “price per seat” for the active set dependent upon the amount of Locked CELO that is voting and what proportion of that amount is controlled by the top validator groups. Groups must satisfy this price per seat to guarantee election into the active set. The system tends to over-represent top groups compared to the ones with a smaller percentage of the vote.
Validator elections are held once every election epoch. Votes persist between epochs, and the same vote is applied to each election until revoked, in which case it has no effect on the validator set until the following election. A user can divide its vote between a maximum of three groups.
Groups can receive votes up to the equivalent of the number needed to elect all of its validators, plus one more. Enforcement of this cap is done when a user is voting; they can only cast a vote for a group if it is currently under the cap. The cap for a group fluctuates depending on the number of validators in the group and the total amount of voting Locked Gold in the system.
Epoch rewards to validators do not depend on the number of votes the validator’s group has received as long as the validator remains in the active set. Validators can earn up to 75,000 cUSD (Celo Dollars) every 12 months.
Validator groups are compensated by taking a share of the rewards allocated to validators. Validator groups set a group share rate when they register and can change that at any time. The protocol automatically deducts this share, sending that portion of the epoch rewards to the validator group of which they were a member at the time of the last election.
Locked CELO holders can earn rewards by voting for a group with at least one (1) active validator. These funds are not at risk of slashing. However, if there’s a slashing event, the group, validators, and cGLD token holders will all receive reduced rewards for the next month. Rewards are targeted at 6% annually (although the percentage can be adjusted by the protocol) and are denominated in CELO and reapplied as votes. These rewards are not subject to the group share.
→ Read more about Celo’s token economics.
Celo validators and validator groups are both at risk of slashing; they get slashed by the same amount. Locked CELO holders, who are voting for a group that gets slashed, do not suffer this penalty. However, all three parties have their rewards reduced by half for the next month after suffering a penalty.
Severity of slashing:
→ Read more about slashing on Celo.
Governance is managed on-chain on Celo. Stakeholders can submit proposals to improve the network; CELO holders then vote whether or not to implement the proposals. These proposals center around (1) the introduction of new stable currencies and (2) the expansion of the Celo reserve with additional crypto-assets in order to reduce volatility.
The goal is to align incentives for the protocol and CELO holders to ensure stability and consistency. It is important that only stable currencies for which there is demand are added to the reserve, otherwise the reserve will have to contract its supply by selling assets. Expanding the reserve is a way to fend off the volatility introduced when the reserve ratio dips.
The Celo Alliance for Prosperity is a group of fifty founding members who are committed to “helping ensure that Celo delivers on its mission to enable prosperity for everyone.”
Bison Trails joined the Celo Alliance for Prosperity as a founding member because we believe there’s a need for groups of incentive-aligned participants to help govern, secure, support, and generally further protocols through collaboration. We share a vision with the Alliance’s members of blockchain technology unlocking access to greater participation in global financial systems. As one of the few infrastructure providers in the Celo Alliance for Prosperity, and a founding member, we are responsible for keeping identity, assets, and the network secure.
Due to the process of voting on Celo, a key benefit to running a validator node with Bison Trails is our ability to help node operators understand and react to changing prices for becoming part of the active set. With an accurate price per seat and registry of customer public keys, Bison Trails can monitor elections and send actionable signals including:
In addition, we work closely with our customers on Celo governance, helping them understand the key issues at play, providing our insights, and assisting them with executing on their voting strategy.
"As both a member of the Celo Alliance for Prosperity and an active participant in Celo's incentivized testnet, Bison Trails has demonstrated early and continuous commitment to the Celo community. I'm grateful to their team of protocol experts and engineers as they contribute to the protocol's development and securing the Celo network." —Rene Reinsberg, co-founder of Celo
As a founding member of the Celo Alliance for Prosperity, and an active participant in Celo’s incentivized testnet, Bison Trails is intimately familiar with the Celo Protocol. We were confirmed as a Master Validator after passing Celo’s audit of our secure blockchain infrastructure platform. Our role in the Celo Alliance for Prosperity is to help keep identity, assets, and the network secure.
We have unique insights and perspectives on the Celo protocol. Our protocol specialists and engineers closely collaborate with the cLabs team and have the latest information on protocol developments.
→ Read more in our in-depth guide to Celo.
Bison Trails runs a Celo validator node for Volt Capital’s TD Labs subsidiary, allowing their community to stake CELO, earn participatory rewards, and support the growth of the network.
Our governance proposal on Celo to extend downtime grace period to 10 minutes passed with 99.9% community support.
We discovered a bug in the core client code preventing validators from correctly signing blocks