The Celo Platform boasts superfast mobile syncing with the network and claims to be hyper-efficient through lightweight clients on devices. It is also dApp-friendly and allows developers to code decentralised apps on its blockchain.
Celo is a blockchain-based ecosystem created to drive crypto adoption among smartphone users. It was launched in a fully functional state in April 2020 by Rene Reinsberg and Marek Olszewski, two ex-executives from the web hosting platform GoDaddy, along with Sep Kamvar and Marek Olszewski. What sets it apart from other platforms is that transacting in CELO and its stablecoins takes only 5 seconds, incurs fees as little as $0.001 and enables users to pay fees in the Celo asset that they are using.
The Celo Platform boasts superfast mobile syncing with the network and claims to be hyper-efficient through lightweight clients on devices. It is also dApp-friendly and allows developers to code decentralised apps on its blockchain. It even features interoperability with MetaMask as well as Ethereum based development tools.
How does Celo work?
By replacing public keys (the addresses of crypto wallets) with unique mobile numbers, the Celo Project aims to include all those without banking access into the decentralised finance framework. Thus, it acts as a facilitator for global crypto payments by connecting all the mobile phones in the world.
The Celo Project can be broken down into four essential components:
1. Celo Platform: The decentralised, proof-of-stake blockchain protocol
The Celo Platform has 100 network validators (or nodes) who run the blockchain’s proof-of-stake (PoS) operations. It uses the Byzantine Fault Tolerance (BFT) mechanism, which interconnects all nodes on the network in real-time. A node must ‘stake’ at least 10,000 CELO coins in order to gain voting rights on proposed changes. Staking involves pledging tokens to the network for developmental purposes and gaining validator rights in the process.
The platform not only has multiple native stablecoins but is also ERC-20 compatible, which means that the Ethereum blockchain powers it. The platform maps individual mobile phone numbers to crypto wallet addresses, thus making it a peer-to-peer (P2P) mobile transaction system enhanced with dApps. Its smart contract platform can be coded from scratch, and users can pay gas fees in stablecoins. These gas fees reward the validator nodes.
2. CELO: The native crypto token of the blockchain
CELO is the utility, governance, and staking token of the Celo Protocol. This means that owning the token allows you to transact, vote on network/protocol changes, and stake it to become a validator node and earn rewards. It is also used to maintain the Celo Reserve – a vast basket of crypto assets, including various cryptocurrencies and other assets used to maintain price stability.
There are a maximum of 1 billion CELO tokens, 60% of which were put in circulation at launch. The remaining 40% will be gradually released through gas fees and staking rewards. Moreover, 120 million tokens will be used to maintain the Celo Reserve. Its ERC-20 compliant nature means that it can be traded on various platforms.
3. Celo Stablecoins:
Celo stablecoins allow anyone to transact instantaneously and cheaply. Celo-compatible mobile dApps or browser clients allow users to buy and sell these coins. There are three such stablecoins in existence today - cUSD, cEUR, and cREAL.
Here are some characteristics of the Celo stablecoins:
Low Risk: Fiat-based tokens (tokens pegged to physical currency) depend heavily on banks for the verification of available collateral. Since transactors do not involve themselves in the activity, complete faith in the central authority has to be maintained.
Stability: Since the Celo Protocol uses an algorithmic stability mechanism, the supply and demand of the stablecoins are controlled by the protocol itself. Through various simulations, the developers have been able to prove that the algorithm is extremely reliable and powerful.
Transparency: Since the stablecoins are blockchain-powered, all transactions occur on-chain and are secure and traceable.
4. Celo Alliance: The platform that encourages community building
The Celo Alliance is built on the belief that the best way to learn and solve real-world problems is through collaboration, which must be fostered. The Celo Alliance allows users to get in touch with individuals with similar interests and thoughts, such that the ideas can manifest as a team. One can even participate in the development of the CELO Platform itself through the alliance.
Celo Use Cases:
1. Payments: Cross-border transacting on Celo is cheaper and more secure. It, therefore, boosts cross border trading and commercial activities.
2. Savings: The Celo Platform incentivises users to hold and transact in Celo stablecoins.
3. Decentralised Finance (DeFi): There are 4K+ DeFi solutions built on the Celo Platform including Ubeswap and Moola which are gateways to DeFi enabling pooling, lending and borrowing.
4. Staking: One can earn a passive income by pledging their CELO coins to the network for development purposes.
Climate Collective: In a one-of-a-kind initiative, numerous organisations have joined hands in ‘tokenising natural assets’ that will back the Celo stablecoins. Over the next four years, the Climate Collective will strive to back 40% of the Celo Reserve with carbon limiting resources like rainforests.
The CO Giveaway:
CELO is listed on the crypto exchange WazirX and can be obtained in exchange for either INR or USD. The giveaway will be held from March 21st, 2022, to March 31st, 2022, and will amount to INR 40,00,000 worth of CELO tokens. Various events will be hosted on various social media platforms, each with its own basket of rewards. If you wish to participate in the events and get hold of CELO tokens, you can refer to the details here: https://wazirx.com/blog/celo-inr-giveaway/