This is a breakdown of Celo based on Figment’s “First Look” format...with some of my own additions. Here’s one about NEAR Protocol that is highly recommended.

What is Celo?

Celo is a “mobile-first”, layer-one blockchain that actively seeks to reduce the barriers of entry for crypto users and promoting global prosperity through easy access to DeFi protocols. Celo allows for users to use their cell phone numbers as their public key and has built its infrastructure to support users with limited access to high-quality internet. Celo aims to be highly developer friendly and draws upon its shared history with Ethereum by being fully EVM-compatible for dApp development.

Team

Celo was founded by Rene Reinsberg, Sep Kamvar, and Marek Olszewski in 2017. The Celo Foundation is a non-profit that helps guide the building of the Celo network along with on-chain governance that Celo holders can participate in.

cLabs, a for-profit software company out of San Francisco, provides the main software development team that implements changes to the network. Celo is backed by a number of VC firms and individual investors including a16z, Polychain Capital, Coinbase, Dragonfly Capital, Reid Hoffman, and Jack Dorsey.

Ecosystem

Celo has over 300 dApps built on top of its blockchain, along with a number of partnerships and organizations that the Celo Foundation leads, including:

Alliance For Prosperity

A community of 191 organizations, companies, venture capital firms, and more actively collaborating through Celo to empower individuals and inspire shared financial abundance.

DeFi For the People

A diverse range of protocols committed to bringing DeFi to the 6 billion smartphone users around the world.

Kickstarter

In December of 2021, Kickstarter announced that it was migrating its platform to a blockchain-based, decentralized model, and chose Celo as the blockchain they were going to build on top of. Check out the announcement here.

Technology

Background

Celo was originally a fork of Geth, or “Go-based” Ethereum, but rather than having a Proof of Work (PoW) consensus mechanism like Ethereum, Celo instead uses a Proof of Stake (PoS) consensus mechanism. This was intentionally chosen due to PoS’s minimal power consumption and easier scalability in comparison with PoW-based chains.

Key Points

• Blockchain Is Quickly Increasing Transaction Speeds
• Currently operates at a lower transactions per second (tps) speed of ~200 tps.
• Founder Marek Olszewski expects Celo to reach the speed of ~140,000 tps through a partnership with Mysten Labs, which includes developers who worked on Meta’s (Facebook’s) Diem project.
• Mobile First: Phone Number As Public Key & Plumo Ultralight Sync
• Users can link their mobile phone number to their public key, so that their mobile/cell phone can be their crypto address. It’s even possible to send crypto to a mobile phone number that doesn’t have a wallet set up yet.
• Celo’s architecture allows for applications to run on an instance of the Celo blockchain software from a user’s cell phone, aka a “Light Client”. It also uses Plumo, a zk-SNARK based mechanism that allows phone users to sync blockchain data much quicker, making the phone users “Ultralight”.
• First Carbon Negative Blockchain
• Through Celo’s partnership with Wren and purchasing of Moss Carbon Credits for its stablecoin reserve, the blockchain has offset more carbon than it produces through its transactions for almost two years.
• Low Gas Fees & Increasing Addresses
• Celo’s average gas fee is $0.001, which could be a major contributing factor behind why the total number of Celo addresses has exploded from 1.3 million on Nov. 20, 2021 to over 23 million on March 9, 2023.

Token Economics

Supply & Initial Distribution

At the launch of Mainnet in April 2020, there were 600 million CELO distributed, with the remaining 400 million of the capped supply of 1 billion set to be introduced during epoch rewards.

The initial distribution of CELO was the following:

• 122.8 million (~20%) was initially set aside for pre-launch sales purchasers (two private rounds and a public auction) and for future sales of CELO from The Celo Foundation.
• 193.7 million (~32%) went to protocol contributors (the team, advisors, founders, etc.)
• 95 million (~15.7%) was allocated to Community Grants, which consists of the Polychain Ecosystem Fund, in-market education and adoption grants, strategic development initiatives, and other community grants with allocation schedules ranging from 3 to 10 years
• 73.6 million (12.2%) went to cLabs (the main development team behind Celo) and the Celo Foundation, which will use these assets for operational grants and expenses
• 120 million (19.8%) went to the "initial reserve," which the Celo Reserve uses to help maintain the peg of cUSD.

(From Messari)

Epoch Rewards

At the end of each epoch (approximately once a day) the rewards are divided among the following:

• Validators and validator groups
• Holders of Locked CELO voting for groups that elected validators
• The Celo Community Fund for protocol infrastructure grants
• The Celo stablecoin reserve for cUSD, cEUR, & cREAL (in case it’s under-collateralized)
• Payments into the Carbon Offsetting Fund

The Celo token currently operates with ~6% inflation rate, but does have a deflationary mechanism based on EIP-1559 that sets a minimum gas price and sends the fee collected on that minimum price to the Celo Community Fund mentioned above.

Celo Stablecoins

cUSD

cEUR

cREAL

In keeping with its “Prosperity for All” mission, Celo believes heavily in the benefits that stablecoins provide users across the world for accruing wealth, and built the Celo blockchain with stablecoin production and sustainment as a critical element of that mission.

Stablecoins With Multiple Approaches To Maintain Stability

cUSD, cEUR, and cREAL are stablecoins that use multiple methods to maintain their “peg” (or the intended value that the stablecoin is designed to mirror on-chain). Those are:

Mento (formerly CP-DOTO)

• Mento is a DeFi platform that allows users to participate in arbitrage opportunities through selling or buying either CELO or one of Celo’s stablecoins for a profit, depending on the need at the time. This buy and sell pressure allows for the price of the stablecoin to undergo periods of expansion and contraction
• More on Celo’s Expansion & Contraction Mechanism Here

Auto-Rebalancing

• Inspired by Uniswap’s approach, Celo keeps a store of both CELO and cUSD in reserve and will automatically sell/buy either asset in order better maintain the stablecoin’s peg. This process is only possible through an oracle accurately reflecting the CELO/USD price.
• Further Reading On The Virtual Buckets Here

Over-Collateralized With Crypto

• Through the Celo Reserve, 5 crypto assets are held as reserve currencies for Celo stablecoins. These combined assets represent more than 4.4 times the amount of Celo stablecoins in circulation.

Governance

What can be changed by CELO holders? Quite a lot actually, it would actually be better to address what cannot be changed through governance. (From Celo Governance Cheat Sheet)

• The protocol by which nodes communicate
• The format of block headers, block bodies, the fields in transactions, etc
• How nodes sync
• How nodes store their data locally
• Most parameters that affect the blockchain

Other than the above, there’s a chance that, as long as a Celo Governance Proposal (CGP) follows the process and receives enough support, the change you’re proposing could make some meaningful changes (even to the governance process itself!)

Locked CELO: Voting on CGPs

While any CELO holder can participate in voting for CGPs, they will first need to “Lock” their CELO so that the same assets aren’t counted more than once during a vote. Unlocking your CELO is possible after 3 days, but locked CELO may be entitled to portions of the Epoch Rewards.

• More on Locked CELO here.

Proposing a Proposal

Being a part of the decision-making process for any organization can be a lot of things, challenging, enlightening, frustrating, etc. but in alignment with the core values of blockchain/crypto/decentralization, there’s a lot of potential for any individual to take hold of the empowering autonomy that this world can offer, assume the lead of a proposal, and making a positive impact for the community and yourself.

Celo does have a reasonably involved process on taking a proposal from start to finish, but there is an excellent guide provided on Celo’s GitHub that addresses both the process and the technical requirements to get a CGP going.

• Check it out here.

Sources

• Celo.org
• Celo Explorer - Stats
• Understanding CELO Allocation: Estimated Circulating Supply Over Time
• Messari: Celo
• GitHub: Celo Org
• Wren Partnership
• Figment - Celo