Celo is a blockchain-based ecosystem created to facilitate the adoption of cryptography among smartphone users. Released in April 2020 in full functionality by two former executives of the web hosting platform GoDaddy, Rene Reinsberg and Marek Olszewski, and Sep Kamvar and Marek Olszewski. Unlike other platforms, trading with CELO and its stablecoin takes only 5 seconds and costs only $ 0.001, allowing users to pay with their Celo assets.
The Celo platform boasts ultra-fast mobile synchronization with the network and claims to be ultra-efficient through lightweight clients on the device. It also supports dApps, allowing developers to code decentralized apps on the blockchain. It also has interoperability with MetaMask and Ethereum-based development tools.
How does Celo work?
The Celo Project aims to include all keys that are inaccessible to banks in a decentralized finance framework by replacing public keys (cryptocurrency wallet addresses) with unique mobile phone numbers. Therefore, by connecting all mobile phones around the world, it acts as a global crypto payment facilitator.
Celo projects can be divided into four important components:
1. Celo Platform: Decentralized Proof of Stake Blockchain Protocol
The Celo platform has 100 network validators (or nodes) that perform blockchain proof of stake (PoS) operations. It uses a Byzantine Fault Tolerance (BFT) mechanism that interconnects all nodes on the network in real time. The node must “bet” at least 10,000 CELO coins to get voting rights on the proposed changes. Staking involves pledged tokens to the network for development purposes and, in the process, acquiring verifier rights.
The platform not only has multiple native stablecoins, but is also compatible with ERC-20. That is, the Ethereum blockchain powers the platform. The platform maps individual mobile numbers to crypto wallet addresses, making it a dApp-enhanced peer-to-peer (P2P) mobile transaction system. Its smart contract platform can be coded from scratch and users can pay for gas with stablecoin. These gas charges reward the validator node.
2. CELO: Blockchain native crypto token
CELO is a utility, governance, and staking token for the Celo protocol. This means that by owning a token, you can trade, vote for network / protocol changes, bet on it, become a validator node, and earn rewards. It is also used to maintain a sero reserve, a huge basket of crypto assets, including various crypto currencies and other assets used to maintain price stability.
There were up to 1 billion CELO tokens, 60% of which were in circulation at launch. The remaining 40% will be gradually released through gas charges and staking rewards. In addition, 120 million tokens will be used to maintain celery reserves. Its ERC-20 compliant nature means that it can be traded on a variety of platforms.
3. Celo Stablecoins:
With Celo Stablecoin, anyone can trade instantly and cheaply. Users can buy and sell these coins using a Celo-compatible mobile dApp or browser client. There are three such stablecoins that exist today: cUSD, cEUR and cREAL.
Some of the features of Celo Stablecoin are:
Low risk: Fiat-based tokens (tokens fixed in physical currency) rely heavily on banks to verify available collateral. Traders are not involved in the activity and must maintain full trust in the central authorities.
Stable: The Celo protocol uses an algorithmic stability mechanism, so the supply and demand of stablecoin is controlled by the protocol itself. Through various simulations, developers have been able to prove that the algorithm is very reliable and powerful.
transparency: Because Stablecoin utilizes the blockchain, all transactions occur on-chain and are secure and traceable.
4. Celo Alliance: A platform that facilitates community building
The Celo Alliance is built on the belief that the best way to learn and solve real-world problems is through collaboration and that it needs to be facilitated. The Celo Alliance allows users to reach out to individuals with similar interests and ideas and express their ideas as a team. You can also participate in the development of the CELO platform itself through the alliance.
Celo use case:
1. Payment: Cross-border transactions at Celo are cheaper and safer. Therefore, it supports cross-border trade and commercial activities.
2. Savings: The Celo platform encourages users to hold and trade Celo Stablecoins.
3. Decentralized Finance (DeFi): 4K + DeFi solutions built on the Celo platform include Ubeswap and Moola, gateways to DeFi that enable pooling, lending and borrowing.
4. Staking: You can earn passive income by putting CELO coins into the network for development purposes.
Climate Collective: A unique initiative, many organizations have participated in the “tokenization of natural resources” to support Celo Stablecoin. Over the next four years, Climate Collective will endeavor to support 40% of the Cyril Reserve with carbon-restricted resources such as rainforests.