What is Celo?

Celo is an open platform that aims to make financial tools available to anybody with a mobile phone. The Celo Platform is distributed, programmable, and adaptable. It aspires to allow a healthy ecosystem of organisations, validators, and developers to establish an open financial system that helps their communities grow and thrive.

Celo operates several native tokens: CELO, its governance token, and a family of stablecoins including Celo Dollar (cUSD), cEUR, and cREAL, pegged to the US dollar, Euro, and Brazilian real, respectively.

A brief history of Celo

Founded in 2017 by Rene Reinsberg, Marek Olszewski, and Sep Kamvar, Celo is a fully Ethereum virtual machine (EVM)-compatible, proof of stake (PoS), Layer-1 protocol. Celo raised around US$46.5 million between 2018 and 2020 by selling over 120 million CELO tokens in private and public token sales. Venture capital firms like a16z Crypto, General Catalyst, and Social Capital are notable investors.

Celo claims that blockchain technology can address real-world issues, such as lack of access to solid money or friction for cash-transfer schemes to relieve poverty. The company’s mission is to bring DeFi to 1 billion people, including those in developing nations who are currently unbanked without access to financial services. Celo also advertises as the first carbon-negative blockchain and it supports environmental initiatives. The firm works on a theory-of-change framework, which defines how short-term activity may lead to the long-term societal effect.

There were 600 million CELO (previously called cGLD) released at the mainnet launch in April 2020. The remaining unreleased 400 million CELO are set to be distributed through epoch rewards to network validators and the Community Fund. CELO has a total supply limit of 1 billion tokens.

In February 2021, Celo raised an additional $20 million from partners such as Andreessen Horowitz, Greenfield One, and Electric Capital.

How Celo works

Celo is a blockchain that aims to bring crypto directly to people’s phones with a user-friendly interface. The Celo blockchain is capable of supporting the development of decentralised applications. Celo's goal is to make financial activities accessible to everybody, wherever in the world, owing to its ability to send payments to and from any phone number on the planet.

The Celo network depends on three contributors to run its platform: light clients, validator nodes, and full nodes. Celo network applications that run on users' mobile devices, like Celo's mobile wallet, are considered light clients. Validator nodes are operating systems that participate in Celo's consensus mechanism, validating transactions and generating new blocks. Meanwhile, full nodes are computers that serve as a bridge between validator nodes and mobile wallets, taking requests from light clients and transmitting transactions to validator nodes.

Celo uses a PoS governance mechanism known as Byzantine fault tolerance (BFT), which keeps a distributed network of computers in sync. Celo's ability to run stablecoins, such as cUSD, offers the efficiency and transparency of cryptocurrency transactions while enabling relief from the volatility of these assets.

What is Celo used for?

CELO tokens can be used for various activities within the Celo blockchain, such as sending, receiving, holding, and staking, all of which support the maintenance and operations of the platform. CELO users can vote on network upgrades, and the size of their holdings determines the amount of votes they have on the platform.