What is Celo (CELO)? All about Celo

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2022-01-11 17:01:26

What is Celo?

Celo is a platform that acts as a global payment infrastructure for cryptocurrencies aimed at targeting mobile users.

To this end, Celo’s goal is to make finance accessible to anyone globally thanks to the ability for payments to be sent to and from any phone number in the world.

In addition to basic payments, Celo can support the development of decentralized applications on its blockchain. So far, these dapps include one that allows anyone to contribute to the community’s universal basic income program, as well as a crowdfunding platform for social causes.

Central to running its blockchain operations, Celo operates two native tokens: CELO, a governance asset for voting on changes to the protocol, and Celo Dollars (cUSD), a stablecoin that reflects price value of the US dollar.

Users looking to stay connected on the current development status of the project and the dapps being built on it, can follow the official Celo blog for updated details.

How does Celo work?

The Celo Network relies on three contributors to help run its platform:

  • Light Clients – The Celo Network app runs on the user’s mobile device, such as Celo’s mobile wallet.
  • Validator Nodes The computer participates in the Celo consensus mechanism, validating transactions and generating new blocks.
  • Full Nodes – The computer acts as a bridge between the Validator nodes and the mobile wallet, taking requests from the lightweight client and forwarding the transaction to the validator nodes.

Notably, Celo’s system requires validating nodes to be voted on by CELO token holders.

Byzantine Fault Tolerance (BFT)

At the heart of Celo is a Proof of Stake governance mechanism called Byzantine Fault Tolerance (BFT) that keeps the distributed network of computers in sync.

In order for valid nodes to power the blockchain and vote on changes, they must first stake a minimum of 10,000 CELO tokens, which means anyone who owns CELO can help run the network.

Currently, there are only 100 validating nodes at any given time, voted on by the full nodes, and each node is then rewarded with a block reward for validating transactions.
Full nodes get their rewards from the fees paid by light clients.

cUSD

A key feature of Celo is its ability to operate stablecoins, such as cUSD, that provide efficiency and transparency of cryptocurrency transactions, while also providing relief from the volatility of these assets. .

Celo automatically ensures that the value of each cUSD is equal to one US dollar using what they call programmatic reserves, excess reserves including CELO and other cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH). This means that cUSD can be sold for the same value as CELO and vice versa.

In the future, Celo plans to allow CELO holders to propose and vote on the creation of stablecoins that mirror the value of other national currencies, such as the euro or yen.

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#Celo #CELO #Celo

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