Layer 1 Protocol, Celo Ecosystem
Celo is a Proof of Stake blockchain with smart contracts. The technology uses a phone-number-based identity system with address-based encryption and eigentrust-based reputation. Their first application, Valora, is a social payments system that can be used on a smartphone. The native Celo token (CELO) is the utility token on the Celo network. CELO are used to pay for transactions and are also staked by token-holders to earn rewards, participate in governance, and to vote for validators. Celo supports a family of algorithmic stablecoins (currently; cUSD, cEUR, and cREAL). These stablecoins provide low-cost transfers of value, such as remittances, cross-border payments, and online payments.
Reward Distribution Period
Every epoch (~1 day)
Validator Self-Bond Requirement
The current requirement is 10,000 CELO to register a Validator, and 10,000 CELO per member validator to register a Validator Group.
Figment Group Validator Address
If a validator signs the same block twice with the same key, they will lose 9000 CELO, lose all future rewards, and be ejected from its current group.
If a validator is offline for over 5760 blocks, they will lose 100 CELO, lose all future rewards, and be ejected from its current group.
This is a guide to staking CELO using the Celo Wallet. If you use large funds, the site will recommend downloading the app or using a ledger. Go to https://celowallet.app/setup. There is a download link at the bottom of the page.
Click “Create New Account.
If you use large funds, the site will recommend downloading the app or using a ledger.
The first thing you need to do is create a wallet. Download and store the passphrase.
If you already have a Celo account, you can use the Ledger wallet app to import a new address.
This is what the Celo wallet looks like once you are logged in. Click the buy Celo to fill your wallet, or Receive Celo to transfer some into your wallet.
If you click receive, the QR code will appear, or you can copy the public address and paste it into the necessary channels.
Click the “More” drop-down menu at the top of the left-hand corner. From here, a host of options are available, including tracking rewards, view balances, and lock or unlock tokens.
You must lock your tokens to the network before staking them and earning rewards. Click the Lock button, and it will pull up the following page.
From here, you must lock the amount of Celo you’d like to the staking contract under the amount section. Leave a little extra in your account to pay for transactions fees. Then click continue. The next page will appear, asking you to confirm your transaction.
Go back to the dropdown menu More, and click “stake.”
This will pull up an interface will all of the validators on Celo. Click on Figment Networks and click “Vote for Group.”
Add the number of tokens you’d like to use to vote for. There is no need to leave extra for transactions fees here. You can stake the max amount of tokens that you have locked.
Click continue, and then vote.
It will take 24 hours (until the next epoch) for your vote to take into effect and for your stake to start earning rewards.
The day after you start staking, you will need to return and open the Celo wallet. Like the one above, a popup will be there, asking you to activate your votes. Click yes, and you will be staking on Celo!
Celo uses a one token = one vote model for voting. After a proposal is submitted on-chain 3 of 9 multi-sig holders it goes to a voting period where any Celo token holder who has locked their tokens to the network can vote on the proposal. The voting period is currently 7 days. Stakeholders can vote on celo.staked.id.
As an L1, Celo has a an ecosystem of projects dedicated to creating projects that are built on top of Celo to drive adoption to make transacting and creating payments easier on the chain. This ecosystem revolves around the core mission of Celo - to reduce barriers to financial access. There are two on-chain community grant committees, community-build wallets, and chiefly: a bridge designed to connect Celo to other ecosystems. This bridge, Nomad, is an extension of the Optics protocol, which is a Celo’s standard for cross-chain communication (similar to the IBC protocol for the Cosmos SDK).
What is staking?
On a Proof of Stake blockchain, staking is the act of depositing tokens into a smart contract on the chain to become a validator; thus participating in proposing and attesting to transaction blocks. Anyone with a minimum necessary coin balance can validate transactions and earn staking rewards on these blockchains.
What is the name of the asset being staked?
Celo’s native token, CELO, is used for staking and participating in on-chain governance.
Where can I explore the network and create a Celo wallet?
How do I earn staking rewards on Celo?
To receive staking rewards, you will need to do two things:
- 1.Lock your CELO tokens
- 2.Vote for a validator group.
The protocol must elect the validator group you vote for, then you will start receiving staking rewards.
What are the rewards for staking CELO?
You should expect your maximum rate of rewards (ie. the baseline) if:
- 1.The validator group that you vote for is elected and
- 2.All of its members perform flawlessly.
The baseline reward estimate is about 6% annually. This baseline reward amount for stakers will decrease when more of the CELO supply is staked, and decrease when less of the supply is staked. If the validator group you vote for has perfect performance, you can expect to earn 100% of your rewards. If members of your validator group experience downtime, you will earn fewer rewards. This amount will decrease rapidly the longer that validator members are offline. Delegators are directly compensated by the protocol. Validators do not have a comission. This also means that delegators do no have tokens taken away from them when validators are slashed.
What are the risks of staking on Celo?
Delegators may miss out on rewards that you otherwise would have received. There are two ways this can happen:
- 1.A member validator in the group you vote for is offline too long
- 2.Many validators commit a fault that puts the network safety at risk.
A validator safety violation cuts your rewards in half for one month.
If many validators in your elected group put the safety of the Celo network at risk by “double-signing,” you will only earn half of your baseline rewards for one month. This is only likely to happen if validators attack the network maliciously.
Validator performance reduces your rewards relative to downtime.
Your validator group gets an “uptime” score for their performance, which begins to decline if any of the group’s validators are down for more than one minute (12 blocks). What does that mean? Your rewards are proportional to average uptime score of your elected validator group. An “uptime” score of anything less than 1.00 will reduce the rewards you earn. The more the group’s validators are offline, the more your rewards earnings will be reduced.
How long does it take to stake and unstake?
Delegators need to lock your tokens into a smart contract before you can vote for a validator group. After submitting the transaction to lock your tokens, there is a 24 hour period (one epoch) before you can vote. There is a 3-day unlocking period before you can transfer the amount back to your wallet.
Rewards are automatically added to staked CELO, so your rewards will automatically compound without having to do anything. However, that means that rewards must be unlocked in order to be liquid (ie. tradable).
How is staking income disbursed?
If you’re staking CELO, you’ll be rewarded in CELO about once per day (epoch). The rewards automatically get compounded (restaked) unless the you decide to unlock a portion or all of your staked amount. Validators get rewarded in Celo Dollar tokens (cUSD) once per epoch (roughly each day, initially). Validator group owners can take a commission of these rewards.
Can my staked CELO be slashed (seized or destroyed)?
Stakers are not exposed to slashing, only validators and validator group owners can be slashed.
What is the rate of new issuance (aka "annual inflation") for CELO? How does the token supply change?
The target curve of remaining epoch rewards declines linearly over 15 years of 50%, and then will decay exponentially. Actual rewards paid out at the end of an epoch is the multiplication of the on-target rewards with a rewards multiplier. This factor mointors the remaining epoch rewards and the target epoch rewards to ensure that the target release schedule is achieved.
Do I maintain custody of my CELO tokens? Who or what controls my staked CELO token?
Figment has partnerships with a number of top-in-class custodians. Please contact [email protected] for more inquiries.
How are decisions about Celo made and executed?
Celo uses on-chain governance where one token represents one vote. This means that any use with locked CELO can particiate in the process. Delegators can vote on Celo terminal, the native interface for transacting on Celo or by going to celo.staked.id. Discussions on governance proposals happen on the forum before being introduced on-chain.
What affects future yields?
The 30% of tokens at launch were set aside for staking rewards and delegators will continue to earn inflationary rewards until 2050. After this date, the rewards will be created from transaction fees on the network. Depending on the adoption rate of this network, rewards will vary.