On May 19, 2020, the open source payment network Celo announced that it has officially launched the mainnet. The next phase of the Celo Platform (Celo Platform) will provide the off-chain price to the Celo Gold chain, on-line and USD through a series of oracles. The pegged stablecoin Celo Dollars and the release of Celo Wallet on the mainnet. In addition, the Celo Foundation has officially become an independent non-profit organization headquartered in the United States and will support the development of the open source Celo platform.
Celo has developed Celo Gold, an application token for payment purposes, and Celo Dollar, a stablecoin pegged to the US dollar. The team has also developed a user-friendly wallet application that allows users to transfer and receive cryptocurrencies using their mobile phones, as well as by phone. The number transfers Celo Dollar to users who do not have the wallet app installed.
Project Description
basic situation
Celo is simply a license-free fast PoS network with a lightweight identity protocol and stability protocol. It is a financially inclusive project, which is composed entirely of open source code. It was born as a stablecoin and is committed to open and decentralized runtime deployment and promotes open governance. As a blockchain Crypto currency payment startup, in the early days, it has raised more than 30 million US dollars through cryptocurrency investment institutions Polychain Capital and Andreessen Horowitz. A16z crypto and Polychain led the investment and jointly established an ecological fund for Celo. The project aims to provide humanitarian assistance, facilitate payment, and provide financial services such as micro loans through its cryptocurrency, Celo Dollar.
Specifically, the lightweight identity protocol means that it can match the hash value of the public key and the mobile phone number, thereby allowing cryptocurrency to be sent to any mobile phone number, which eliminates many barriers to cryptocurrency transactions.
One difference between Celo and other blockchain projects is that a simple smartphone can serve as a node in the Celo network. This is achieved through the rapid synchronization of ultra-light clients, which enables the block head to be quickly synchronized with the mobile phone. Optimization, which makes Celo 17,000 times lighter than other blockchains, and the team continues to optimize.
Markets and use cases
One of the team’s intentions to do the Celo project is that the market has seen the huge potential of blockchain and cryptocurrencies, but it has not seen many projects do mobile applications. Few projects can do well on cheap mobile apps. Therefore, the team established Celo and adopted a mobile-first strategy.
The team believes this strategy will allow more people to enter the Celo ecosystem. According to forecasts, by 2025, there will be more than 7 billion mobile phone users worldwide. Celo has technology that is not restricted by model, operator and country, and the team hopes that this will allow more people to get basic financial products and services.
The importance of stablecoins is unquestionable, especially since the beginning of this year, stablecoins have achieved tremendous growth, reaching the order of tens of billions. It is believed that the usage scenarios of stablecoins can go far beyond today’s scope. In the field of payment, an innovation of the Celo protocol is that it supports the deduction of stablecoin as a handling fee when transferring funds, rather than the platform’s native token.
The market focus of Celo’s alliances is Latin America, Africa and Southeast Asia.
Prosperity Alliance is also a financial product and service institution, mainly used as a tool for simple payment, remittance, institutional/intergovernmental cash transfer, allowing individuals to earn money by completing tasks online or on mobile phones, and helping individuals obtain loans. Join the DeFi scene.
Celo has good use cases in Brazil and the Philippines. For example: Brazilian companies make money by performing tasks, sharing contact information, answering surveys, or providing product feedback; Filipinos working overseas send money to family members in the country.
Latest development
On April 22, the team’s validator community selected the first candidate mainnet (RC1, that is, if no major vulnerabilities are found, it will officially become the mainnet of Celo). You can follow the team’s official website to understand More mainnet progress. In addition, in a few weeks, the team will provide a complete feature set of the protocol through on-chain governance.
The founding team stated that starting Celo was a very interesting journey. The team formally started this project about 3 years ago, and surveyed users from all over the world such as Asia, Latin America, the Middle East, and Europe. One of the conclusions is that no matter where, the current financial services do not meet the needs of users, and there is still room for improvement.
Recent progress:
1) The SDK was released in February, which simplifies dApp development through ContractKit and DAppKit.
2) The first candidate main network RC1, currently Celo Wallet Celo Wallet has been launched on iOS and Android.
Technical characteristics
The official website has updated the latest details: At present, the Celo project is in the prototype stage. The code is completely open source and available on GitHub. Versions of all major components of the protocol and wallet exist, but the entire platform is being actively developed and tested by the Celo community. Alfajores Testnet is the first of several networks designed for testers and developers to experiment and understand Celo. Users can create an account, receive funds, and try Celo Wallet and Celo CLI. Start here. Alfajores Testnet tokens have no real world economic value. The data of the entire testnet will be reset periodically. This will delete the user’s account, balance and transaction history.
The Baklava testnet is the second Celo testnet after Alfajores. You can use it to compete. According to these terms and conditions, qualified participants will have the opportunity to obtain a Celo token when the main network of the Celo Agreement is released. This work will be carried out in stages, with each stage focusing on different parts of the protocol or infrastructure to be tested. The focus of the Celo community is to establish an economically valuable Celo production network. This means testing, running security audits, and establishing broader participation around a long-term roadmap. The project also continues to focus on user experience. The team dedicated to Celo expects to improve and extend the range of APIs available to developers when creating Celo extensions, whether as smart contracts or applications. Input in the form of use cases, suggestions and bug reports is very popular. During the development process, Celo’s protocol and its APIs will continue to evolve, and any smart contracts or applications built to run on Alfajores or related to the current code base may become incompatible.
Technology is related to stablecoin. It is important to work hard on security. At the same time, Celo’s original light application requires convenience. The phone can directly realize account operation as innovation, and the project is balanced.
According to the official website white paper, the main technical points are as follows:
Stable currency calculation method
Celo includes local support for multiple stable ERC20 currencies, which are linked to “fiat” currencies such as the US dollar to facilitate the use of Celo as a means of payment.
Account linked to phone number
Celo maintains a secure decentralized phone number mapping, allowing wallet users to send and receive simple payments with their existing contacts, and is confident that the payment will reach the intended recipient.
Transaction fees in any currency
Users can pay transaction fees in stable currencies, so there is no need to manage balances in different currencies. Instant synchronization even on slow connections. The extremely fast and secure synchronization between mobile devices and the Celo network means that wallet users can use Celo even if they have high latency, low bandwidth, or high cost data charges. Celo eliminates the need to check each header before the headers received are trustworthy. With zk SNARKs, BLS signature aggregation and concise zero-knowledge proofs will further improve performance.
Proof of interest
Celo uses a consensus algorithm to prove the stakes. Compared with proof-of-work systems such as Bitcoin and Ethereum, this eliminates the negative impact on the environment, which means that users can make cheaper and faster transactions. Once the transaction is completed, the transaction result cannot be changed .
Full node incentive
The Celo protocol provides incentives to run full nodes to serve light clients running on each mobile device. Unlike other proof-of-interest systems, users can still earn cryptocurrency by providing computing resources without having to hold funds.
Community governance mechanism
Since a good user experience requires constant iteration, Celo supports rapid upgrades and protocol changes through on-chain management that all cryptocurrency holders can participate in.
Programmable (full EVM compatibility)
Celo includes a programmable smart contract platform that is compatible with the Ethereum virtual machine. The Ethereum virtual machine has been widely adopted, familiar to developers, and supported by powerful tools. This allows Celo to provide a wealth of user features and quickly support a wide range of third-party applications and expand the ecosystem.
Self-monitoring
Users can access and fully control their funds and account keys without relying on third-party payments.
Partner
During this period, the team also won a large number of excellent partners, supporters and contributors. About 80 contributors currently contribute to the Celo network.
Celo’s prosperous alliance members:
Including Libra Association member Silicon Valley venture capital giant Andreessen Horowitz, the largest Crypto currency compliance exchange Coinbase, Bison Trails, Anchorage, Macy’s, etc., formed a huge alliance matrix, covering many high-quality projects and funds.
For example, a16z has always been a heavy participant in the field of encryption. From the earliest Coinbase and Ripple to later Oasis, Chia, Compound, Maker, Dfinity, Near, etc., it has never stopped investing in crypto enterprises or projects. Choice has always been an important area of value capture over the next decade or even decades. In essence, a16z invests in the field of encryption, which is no different from its previous investment in Internet companies such as Facebook, Twitter, Skype, etc. It is looking for the next big fish.
Polychain is an investor in star public chain projects such as Nervos, Cosmos, Tezos, and Dfinity, as well as an investor in the famous Crypto currency exchange Coinbase. In addition to these star projects, the legendary background of the founder of Polychain and the super high yield in 2017 have made it an investment institution that cannot be ignored in the blockchain circle.
The alliance also contains some very high-quality projects: for example, Ontology, which is based on a very basic protocol called Ontology (Ontology Protocol), is also very promising. In April this year, the public chain’s ecological list was ranked among the top three ecological crypto cryptocurrencies along with Ethereum and EOS. Ontology was closely related to NEO in the early days. Even the founding team had a lot of NEO, but they did not choose to build a blockchain on NEO, but chose to rebuild a public chain by themselves. In addition, the Ankr project was also a hot project of the year. Ankr’s core technical team has a strong educational background, mostly from the University of California Berkeley or other overseas famous schools. Klaytn is the blockchain platform of GroundX, a subsidiary of South Korean Internet giant Kakao Blockchain. In June of this year, it officially released the blockchain-based Crypto asset wallet service “Klip”. Klip allows users to send and receive Crypto assets using their KakaoTalk account information, unlike most blockchain wallets that provide complex wallet addresses.
Fundamentals, token design, fundraising and competing products
Token characteristics and economic models
The Celo dual token system, Celo Gold (cGLD), and Celo Dollar (cUSD) are linked to gold and stablecoins, respectively, and the two are inversely related.
1) Celo Gold (cGLD) is a token whose price will fluctuate. Although gold is included in the name, it has nothing to do with gold. The main purpose is Celo platform governance, such as running verification nodes, voting for verification nodes, on-chain governance, etc.
2) Celo Dollar (cUSD) is a stablecoin linked to the US dollar. According to the design scheme of the official website, the initial excess guarantee reserve of cUSD will include cGLD and other cryptocurrencies with liquidity such as BTC and ETH.
Celo raised funds on Coinlist on May 12th. After a 12-hour Dutch auction, the first auction of Celo Gold (cGLD) was completed, raising a total of US$10 million. The starting price of each cGLD was US$12, and the final settlement price was 1. US dollars.
Celo’s current offer:
- Each initial price is 12 dollars in the Netherlands, and the final price is 1 dollar
- Total supply of cGLD: 1 billion
- Circulation of cGLD in the first year: about 200 million
- CGLD lock-up period in this auction: 60 days, will be gradually unlocked in 12 months
- The first 10% of the coins will be sent to the investor account after 60 days, and 10% will be unlocked every 30 days thereafter. The locked cGLD can also participate in governance.
The following figure shows the specific unlock time and method given by the team:
In April 2019, Celo completed a financing of US$30 million, led by cryptocurrency funds a16z crypto and Polychain. Dragonfly Capital also participated in this round of financing. Prior to this, Celo had raised US$6.4 million. Celo supporters also include Reid Hoffman from LinkedIn’s founder, Twitter founder Jack Dorsey, AngelList founder Naval Ravikant and other Silicon Valley gangsters.
Celo financing:
In addition, Celo’s token distribution and governance mechanism can be summarized as follows:
According to the white paper and the answer of the founder AMA, cGLD is the functional and governance token of the Celo platform, and also plays an important role in the stability mechanism of the stablecoin. Specifically, once the demand for stablecoins increases, the agreement will issue additional stablecoins and put them on the market by repurchasing cGLD. The specific mechanism is similar to Uniswap and belongs to on-chain transactions. And it is two-way, that is, the demand for stable coins is reduced, and the circulation of stable coins can be reduced by using cGLD to buy back stable coins. In view of this, the circulation of cGLD and the circulation of stablecoins change in reverse. Once the circulation of stablecoins increases, the circulation of cGLD will decrease. In addition, the supply of cGLD is fixed, and the price of cGLD will be affected.
Competitive product analysis
Celo’s biggest benchmark stablecoin is Libra, which has 2.7 billion users. What does Celo rely on to fight such a strong king? Despite the similar nature of the description, Celo and Libra have many differences.
to sum up
1) Different service targets: Celo is mainly light users; it simplifies the operation mode and eliminates some barriers to transactions.
2) Different investment targets: there is no capital threshold, anyone can apply to join the network. Follow the people-friendly route. The alliance’s half-year growth rate is rapid, and the growth rate from March to May this year reached more than 50%. However, the alliance also has many high-end participants, including many Libra association members and Klaytn, a subsidiary of South Korean Internet giant KAKAO. Currently, Celo’s prosperity alliance members have reached 76.
However, such a design inevitably brings risks:
1) How to ensure the advanced nature of the blockchain technology, does the lightweight design reduce the functionality and the stability of the bottom layer? Celo is 17,000 times lighter than other blockchains and is still being optimized.
2) The poor mobile phone devices are not well compatible, and the risk of technical bugs will emerge. Celo has adopted a mobile-first strategy.
The above highlights need market verification.
Innovation:
At present, payment and remittance are the main functions. In the future, Celo will show its ambitions in the field of DeFi.
Community Building
The total number of social platforms and communities exceeds 20,000, and the renewal and activity are good. There are more fan interactions, and the official social network official articles are published more frequently, which increases community activity. At the same time, joining the community and applications can quickly sense the team’s current progress and important issues, and enhance the sense of participation. The current number of fans collected by Chain Capital on each platform is as follows:
- The total number of community and social platforms exceeds 20,000:
- Weibo: 5,225
- Telegram Community: 15,307
- Facebook: 2000
- Twitter: 184
- LinkedIn: 851
According to the information released by the project, the recently joined application development team, the community has continued to rise, reaching 251 in April this year. In addition, the countries involved in the community are mainly Europe and Russia, followed by the Americas region. After the Asian region is relatively partial, the team needs to work hard to expand in the Asian market. After all, the market is large. If the situation can be opened, the market share is considerable. Moreover, the Asian market is more dependent on mobile phones, and the direct total Internet in many regions has jumped to the mobile Internet. This is good for project development.
Unfortunately, the official Chinese community has not yet been established. Need to wait for the project to carry out commercial promotion in Asia and China after this round of financing, and watch its subsequent development.
core team
Rene Reinsberg, as well as the two co-founders Marek Olszewski and Sep Kamvar, are both MIT backgrounds in machine learning. Most of the teams have technical backgrounds, and both Engineering and Business Growth are equipped with a large talent pool. It’s been ten years since they met and started a business together. Rene and Marek made a startup called Locu together to do machine learning. Later this company was acquired by GoDaddy. Rene has previously worked in Morgan Stanley’s Global Capital Markets Department, McKinsey, World Bank and TechnoServe.
Marek and Sep are both technical backgrounds. For example, Marek’s past work includes a decisive multi-threaded and transactional memory, and for this he won the Facebook Fellowship scholarship in 2011. He has also worked at Microsoft Research, Google and Sun Labs. Sep Kamvar is the inventor of EigenTrust, and EigenTrust is one of the most well-known trust computing protocols in distributed systems. Before joining Celo, Sep was a professor at MIT Media Lab. The first company he founded, as a personalized search engine, was acquired by Google in 2003. He has since led his personalized search team at Google for many years.
There are more than 60 team members displayed on the official website. From the photos of their team life, you can see that the members are all sunny and healthy and helpful. You can judge that the atmosphere and corporate culture of the entire team are very positive. You can automatically The way the brain makes up the team’s sunshine.
In addition, team members often give lectures on Twitter to popularize Celo, which is very academic.
Chain Capital point of view
- At present, the market value of stablecoins has exceeded 10 billion US dollars. And according to the Merssari report: Over the past year, stablecoins have increased their share of total value transactions compared to Bitcoin and Ethereum, and the US dollar is gradually being transplanted into the public chain. Stablecoin will occupy a large market.
- The project is very courageous and innovative in a certain sense. At the same time, the DeFi track that is concerned is also a hot spot this year. If it can play a world, it will make a big difference in the future.
- The project has done a good job each time. The Celo alliance has a strong momentum and owns a lot of Libra’s investor matrix. The institutions behind the fundraising are related to Libra.
- At the same time, there is no capital threshold for investment and user use, which can be said to be fully acceptable to capital and users. It laid a solid foundation for rapid fundraising and user accumulation.
- Risk points: The market needs to verify whether optimization can balance light block changes in data processing capabilities and mobile phone compatibility.
[Stakeholders] Chain Capital participated in the Celo project investment.