Celo is a carbon-negative, Layer-1 protocol with a rich ecosystem of global partners building Web3 applications in support of Celo’s mission to create a more inclusive, accessible global financial system. With its current TVL standing at $443.5M, the Celo protocol has been in the spotlight the past year thanks to its mission to improve financial prosperity while staying true to decentralization.
Since its mainnet launch in 2018, the Celo protocol became the fourth fastest growing blockchain in DeFi and raised more than $65M from high-profile industry backers such as Polychain Capital and Coinbase Ventures. Hosting some of the largest DeFi applications including Ubeswap, Sushi, and Moola Market — Celo now supports more than 1000 projects founded by global builders, developers, and even artists.
Co-founded in 2017 by Rene Reinsberg, Marek Olszewski, and Sep Kamvar, Celo is an EVM-compatible, proof-of-stake (PoS) Layer-1 protocol that’s optimized for fast, global peer-to-peer transactions and merchant payments via mobile phones. With its mobile-first approach, Celo strives to make cryptocurrency accessible to the 6 billion+ smartphone users around the world. Celo facilitates money to be global, mobile, and accessible through its interoperability, low costs, and high speed, whilst truly embodying decentralization by providing an open-source blockchain infrastructure.
The Celo ecosystem consists of global partners building Web3 applications, including in DeFi, NFTs, and payments, to support Celo’s mission in creating a more accessible and inclusive global financial system. Aside from the Celo mainnet, which hosts smart contracts and dApps, there is the non-profit Celo Foundation, the Celo Alliance for Prosperity, the Climate Collective, and more. Notably, the Celo Foundation supports the growth and development of the Celo platform by providing education, technical research, environmental health, ecosystem outreach, and more — all in support of Celo’s mission. Hex Trust joined the Celo Alliance for Prosperity in May 2020 as a mission-aligned member to build and deliver applications for a range of financial use cases.
What really makes the Celo protocol stand out is its ability to solve two fundamental barriers in using crypto as a means of payment: ease of use and purchasing power volatility. The mobile-first Valora wallet built on Celo, is a social payments application oriented around overcoming these exact barriers through phone number verification and stable-value assets. Crypto addresses are linked to user mobile phone numbers, making crypto transactions as easy as sending a text message. The application also provides minimal volatility of assets through the use of stablecoins, countering any concerns of payment made with volatile assets. Access to other dApps in the Celo ecosystem, decentralized exchanges, lending opportunities within DeFi and exploration of NFT collections are all available on the same platform — facilitating interoperability and enhancing user experience.
Celo aims to provide the simplest possible experience for end users, especially those who may not be familiar with cryptocurrencies or are using devices with limited connectivity. To do this, Celo takes a full-stack approach, where each layer of the stack is designed with the end user in mind while supporting stakeholders such as validator nodes. Celo’s full-stack is structured into three layers: the Celo blockchain, core contracts, and applications.
Overall, the Celo network relies on three entities: light clients, validator nodes, and full nodes.
The Celo platform operates through a Byzantine Fault Tolerant (BFT) proof-of-stake governance mechanism, which keeps a distributed network of computers in sync with one another. This technology allows the platform to maintain low computing power (due to lack of competition between nodes), low transaction fees (less than $.01 on average), and short transaction times of about 5 seconds.
There are two main assets operating on the Celo protocol — $CELO, its native governance token, and cUSD (the Celo dollar), its stablecoin that tracks the value of USD. $CELO is used to power the platform’s gas power fees, and token holders are able to vote on changes related to the protocol. An example of a voter-approved proposal was the carbon offsetting of the Celo blockchain, making it the first carbon negative blockchain to exist. cUSD on the other hand, allows efficient and transparent crypto transactions, whilst providing relief from more volatile digital assets. It targets the value of one cUSD to one USD through a programmatic reserve, an overcollateralized reserve storing $CELO and other cryptocurrencies. The protocol announced the launch of its second and third native stablecoins, cEUR (Celo euro), and, most recently, cReal (Celo real). As a partner, Hex Trust currently supports custodial services for $CELO and its cUSD and cEUR stablecoins.
Blockchain technologies have proven their success in recent years, reflected through their rapidly rising popularity and scope. However, what seems to pose a continuous challenge in the space is the lack of user-friendliness to facilitate mainstream adoption.
One of Celo’s primary goals is to create economically long lasting and resilient DeFi solutions. By combining the decentralized nature of blockchain technology and the user-friendliness of traditional financial payment systems, the protocol is pioneering DeFi adoption by working towards bringing new products, services and initiatives.
2022 shows great promise for the Celo protocol, with 2021 having been a year of many milestones—the launch of the Valora app, cEUR, its mission-driven initiative DeFi for the People, the joining of Kickstarter on Celo’s ecosystem and much more. The future roadmap for Celo is very promising, with big plans including an NFT marketplace, aiming to be launched later this year. Overall, Celo shows great promise with its embodiment of financial inclusivity and innovation, and Hex Trust looks forward to further collaborating with the team behind Celo on this mission.