Get aquainted with Celo and find out why it may be a great blockchain for many applications.
Celo is leveraging the mobile obsession of the modern world and increasing the accessibility of crypto payments and dApps while increasing financial inclusion to anyone with access to merely a mobile phone with internet access. As Celo leans into creating a diverse community, more people than ever before are asking, what is Celo? Let’s find out and explore this excellent project.
Introduction to the Celo Blockchain
Celo is a blockchain project that aims to increase access to cryptocurrency and provide tools that are easy to use by just about anyone, thanks to a focus on mobile-first usability. As Celo is a proof of stake blockchain, this enables fast and inexpensive transactions alongside a reward system that allows holders to participate in the network directly while incentivizing them to do so. Also, unlike many projects that rely on full nodes to form an essential part of the network, Celo incentivizes node operators via transaction fees from users that operate light clients that can run on low-cost devices like smartphones.
Including support for smart contracts, Celo is fostering a thriving community of dApps and users with various preferences and use cases. Celo also maintains full EVM compatibility, which at its core means that anyone familiar with developing for Ethereum will be able to transition to working on projects for Celo quickly. While Celo does maintain a lot of compatibility with the standards used on Ethereum, it’s important to note that Celo operates as an independent blockchain, so assets can not be directly sent between the two chains.
The Celo Native Asset
CELO (previously known as Celo Gold or cGLD) is an essential asset on the Celo blockchain. It is staked by validators while also being a tool for governance and voting. It even plays a part in maintaining the stability of cUSD, a stablecoin native to the Celo blockchain. CELO can be a great thing to investigate further if you’re interested in getting involved in the Celo project.
The CELO token has an ERC20 interface so that it can be used directly with smart contracts, but at the same time, not all CELO transactions require interacting with a smart contract.
Exploring the Celo Ecosystem
A growing number of dApps, wallets, tokens, and more are being developed and regularly launching on Celo. As a result, there's a lot to explore, from projects exploring sustainability to experimental economic concepts.
You don’t have to be a developer or even someone experienced with cryptocurrency to start exploring the Celo community and engaging with some of these great projects. If you’re looking to check out some of the latest developments on Celo, a great place to start is to visit the CeloHub, where various projects are tracked and listed ready for you to check out. Celo also has excellent communities on Telegram, Discord, and a range of other resources that can be found via the official Celo website.
Algorithmic Stablecoins on Celo
While a range of stablecoins have entered the cryptocurrency space in recent years, many rely on traditional forms of direct backing in legacy financial systems, debt-based backing, or other types of conventional reserves. However, on Celo, there’s a great option in the Celo Dollar (cUSD), a stablecoin with a dynamic supply that maintains a price close to equivalent to the US Dollar (USD).
Through a stability mechanism that leverages the CELO token, cUSD can maintain reliability through various conditions and network effects. For example, the supply of cUSD is expanded and reduced by either burning cUSD or adding additional CELO to an on-chain, entirely crypto-based reserve. In addition, incentives are factored into the mechanisms that maintain cUSD to enable arbitrage traders and CELO holders to easily participate in keeping cUSD stable while potentially earning a profit themselves from participating in the process.
The Celo team has created a thorough stability analysis of these mechanisms, which provides an in-depth explanation of how they operate and how they protect against various market conditions.
Identity on the Blockchain
One of the exciting aspects of Celo is the focus on providing a first-class mobile experience. Fostering an ecosystem with good support for mobile devices makes a massive difference in access, especially for those who need it most, such as those struggling with debanking or those underserved by traditional financial services.
Part of this mobile focus has led Celo to integrate phone numbers as an identifier for users of the network, as well as enable transactions to be performed using phone numbers. As the adoption of blockchain technology continues to increase, these features will likely become significant aspects of how we use cryptocurrency in the future.
Celo Transaction Fees
Transacting on Celo isn’t just fast; it’s also made a little easier thanks to some critical differences in how transactions are handled compared to Ethereum. For example, transactions involving cUSD and other tokens on the network can be used to pay transaction fees. If you’ve been an active user of many other blockchains that support native tokens, you’ve likely run into the issue of needing the primary network asset to pay the transaction fees to move a token; on Celo, you can pay transaction fees directly in cUSD or other supported assets.
Furthermore, while transaction fees can ebb and flow, and even significantly in the case of Ethereum at times, currently, Celo transactions are incredibly cheap. Depending on the transactions you perform (e.g., transferring tokens, interacting with a smart contract), the savings of opting to use Celo versus some other popular blockchains can be significant. While this may change in the future, so far, using Celo is fast and affordable, making it an excellent choice for those trying to avoid excessive transaction fees while still providing access to smart contracts, tokens, stablecoins, and a growing community of dApps.
If you’ve been looking to experiment with cryptocurrency but have been put off by the cost of performing transactions, or maybe you don’t even have access to a computer, Celo and its growing community are well worth exploring.