The Next Chapter: Introducing Celo 2.0 | by cLabs
In 2018, the Celo whitepaper set out an ambitious vision to reimagine money for the greater good. Five years on, we’re proud to see the Celo ecosystem thriving and delivering on that vision.
Celo Mainnet, a carbon-negative EVM-compatible blockchain, was launched by the community on Earth Day 2020. Now, easy-to-use payments flow through the platform daily, sent directly to mobile numbers. Mento assets that track the US Dollar, Euro, and Brazilian Real make stable-value transfers simple, especially since they can be used to pay transaction fees. Community currencies like the Kolektivo Guilder and Resource Dollar circulate in communities. A growing number of these currencies are now backed in part by natural capital thanks to a growing Regenerative Finance (ReFi) ecosystem. Projects delivering UBI and social dividends including ImpactMarket and GoodDollar have disbursed $3.3M to 536,000 people across 26 emerging economies. All of this is coupled with a rich DeFi and growing NFT ecosystem that continues to thrive and attract builders and users to the platform.
It’s now time to enter chapter two of Celo’s story!
The Celo Evolution — For Builders
At cLabs, we are the leading contributor to the Celo technology stack. Celo’s mission — to create the conditions for prosperity, for everyone — drives everything we do. More than ever, achieving this mission requires delivering a platform that unlocks builders to reimagine money to meet the needs of their communities.
cLabs’ vision for Celo’s next chapter is to be the best platform on which to launch and scale any Web3 project that furthers the regenerative economy. Here is our proposal for how to get there:
- Deep alignment with the Ethereum Roadmap
- Horizontal scalability by making Celo an incredibly rollup-friendly chain
- Making Celo the fastest EVM L1
- Refining CELO tokenomics, and rewarding contributors
- Providing a top-tier developer experience
- Powerful building blocks for wallets and applications
I. Deep alignment with the Ethereum Roadmap
We believe in a deep alignment with the Ethereum community. Our work will maintain full compatibility with the EVM, and we will align hard fork proposals and new EIPs with the Ethereum community. Our communities already share technology and people and we will contribute back and develop together wherever it makes sense.
From the start, the Celo project embraced the aspirations of Ethereum in creating a decentralized platform for programmable money. Celo took the Ethereum blockchain as a starting point, and made a number of core changes in line with a focus on usability, mobile access, and global payments. By standing on the shoulders of giants, Celo became the first major EVM-compatible Proof-of-Stake L1.
Celo already delivers high transaction throughput, 5 second block times, immediate finality, and no chain reorgs ever. Celo shipped EIP-1559 at launch in 2020, and helped prove it out in production before Ethereum adopted it in 2022. Celo has on-chain governance, including a number of parameters of the core blockchain, a first in the Ethereum ecosystem. Going further than just eliminating Proof-of-Work, the Celo protocol was the first to automatically offset its carbon footprint since its first block, which has since inspired other chains to follow suit.
We propose to bring Celo even closer to Ethereum. Celo already supports using governance-approved ERC20s to pay for gas. We will propose to extend this to include bridged WETH and potentially other tokens widely used on Ethereum, making it far easier for Ethereum users to use apps deployed on Celo. Additionally, we prioritize ensuring support for Celo-specific functions, such as gas payments with tokens, in widely used apps and tools such as Metamask (via snaps) or Truffle, Hardhat or Foundry.
Celo is a flourishing L1 and has robust economic security. Its strong and vibrant validator community has an excellent track record for both security and uptime. Only once since April 2020 has Celo been unavailable for more than 30 seconds. But there is no room for complacency. We will explore opportunities to build even greater operational and economic security as well as strengthen resistance to long-range attacks.
II. Horizontal scalability by making Celo an incredibly rollup-friendly chain
cLabs believes that Celo best achieves horizontal scalability through L2 rollups to the L1.
Our view is that rollups are the most secure and flexible way of structuring an ecosystem of subchains when compared to other options. In a non-rollup model, if a full node on a subchain receives a message from a second subchain, it can only determine if that message is valid either by also running a full node on that second subchain, or by trusting the second subchain’s validator set. This means that subchains connected via light-client bridges, or sharded subchains connected via a beacon chain, rely on the economic security of both subchains’ validator sets. This is a strictly weaker security model than offered on L1s today, where running a full node can verify every state transition on that chain. In contrast, rollups rely on just a single honest full node per subchain, offering a more scalable way of achieving security equivalent to the L1.
We’ve heard from some Celo ecosystem builders that they want to provide a very different API for their users, for instance, an API focused on privacy, or make protocol changes to optimize for their application. Rollups permit this flexibility while offering a strong security model.
cLabs will be contributing to rollup development in several ways. Our aim is to make Celo a super-responsive platform to the needs of L2s and L2 dev teams, and a great testbed for enterprises and builders to explore rollups and sidechains.
We will contribute an extension to Celo’s Proof-of-Stake mechanism to allow multi-staking. Any account will be able to register as a validator and put their stake at risk validating subservices such as L2 sequencers or decentralized bridges, whether or not they’re already validators on the Celo L1. This makes it far simpler for L2s to obtain a high-quality set of validators and significantly lowers their cost of capital by allowing validators to receive rewards multiple times on their stake.
Celo’s immediate finality already simplifies the development of optimistic rollups. cLabs will be working on consensus and throughput improvements, described below, that could allow the network’s block time to be reduced substantially.
Celo has already made deploying rollups easier with precompiles for BLS12–381, BLS12–377, and ed25519 operations. Next, we propose adding precompiles for BW-6 and Halo 2 compatible Pasta curves for consideration in an upcoming hard fork. We’re committed to collaborating with teams building L2s to quickly implement the precompiles they need.
We recognize that cost-effective blob storage is necessary for L2s to work seamlessly on top of Celo, so we plan to follow Ethereum and adopt proto-danksharding later this year.
Finally, interoperability solutions will be important for rollup ecosystems to present a unified interface and foster the movement of liquidity. This will entail secure, trust-minimized, low latency messaging between different L2s, whatever their implementation. We are collaborating with Hyperlane to research new opportunities in this space that can be shared with the broader Ethereum L2 ecosystem.
III. Making Celo the fastest EVM L1
Delivering fast L1 block times and high throughput is essential for every builder today, and for future L2s. In collaboration with Mysten Labs, we are continuing a program of cutting-edge distributed systems and concurrency research to propose scale ups for Celo to deliver every ounce of single-chain performance, while maintaining full EVM compatibility.
cLabs will work with the Celo validator community to scale up the full node and validator hardware specs. Taking inspiration from the latest and fastest ETH clients, we plan to benchmark and optimize client implementation, targeting the latest server-class hardware.
We are pursuing a replacement for the Celo consensus engine that integrates ultra-high-throughput transaction sequencing and a consensus implementation that will be faster, simpler to prove correct, and will provide opportunities to further decentralize the network by expanding the pool of active validators. So far, we’ve been exploring Narwhal as a potential candidate, and plan to continue to make further progress as Narwhal becomes production ready.
We are also developing a proposal to drive throughput improvements by parallelizing transaction execution across all the cores of a server-class machine without compromising EVM compatibility. We have experimented with parallel execution frameworks such as BlockSTM, but their benefits out-of-the-box are limited. Our research aims to unlock the potential commutativity in most transactions currently limited by EVM implementation details and common smart contract designs.
IV. Refining CELO tokenomics, and rewarding contributors
The CELO native asset was launched with a fixed supply of 1 billion tokens. The protocol uses emissions to reward validators, validator groups, and stakers; contributes to a Community Fund managed by on-chain governance to fund development in a decentralized way; and also contributes to a carbon-offsetting fund.
In Celo’s existing implementation of EIP-1559, the base portion of every transaction fee is sent to this Community Fund. cLabs is now proposing for Celo to burn this base automatically, enabling CELO to be deflationary under certain conditions. We will explore how to enable on-chain governance to use fees paid to the Community Fund in other assets to buy back CELO and burn that, essentially optimizing value for CELO holders. If CELO is already “sound money,” these changes would make it “ultrasound money.”
V. Providing a top-tier developer experience
cLabs is committed to making sure that Celo developers have access to a best-in-class suite of tools, services, and APIs. Celo’s EVM compatibility provides considerable assistance there. Already, most of the toolchain used by popular Ethereum projects works out of the box on Celo. But cLabs has been working to ensure that we’re responsive to builders and filling gaps as quickly as we identify them. In the last three months, cLabs has relaunched Celo Safe for Gnosis-compatible multisigs, improved the developer faucet, and ensured ethers.js and RainbowKit work seamlessly. Coming up, cLabs is improving the existing support for Foundry, ensuring full compatibility for WalletConnect v2, and more.
To complement an abundance of tooling, a best-in-class developer experience centers on builders being able to seamlessly navigate the end-to-end journey, whether they are new to Web3 development or are porting a project already deployed on Ethereum. The challenge cLabs has consistently heard though is that EVM chains are overrun with options. To address this, cLabs will also recommend tools for each job based on different use cases and application architectures — and ensure great documentation, tutorials, and glue code.
VI. Powerful building blocks for wallets and applications
cLabs also creates building blocks to help Celo developers go further faster.
In July, cLabs launched a composable liquid staking protocol, stCelo, now used by over two thousand accounts, securing 1.3M CELO, as well as by ReFi protocols including Spirals. The stCelo roadmap includes the ability to manage larger pools of funds for real-world use cases, stake for larger validator sets, and participate in on-chain governance.
cLabs just announced the public beta of SocialConnect, an evolution of Celo’s original decentralized phone number mapping. Entities like wallets can now securely map any social identifiers to an address. Because the mapping is now driven by wallets, they can simplify the mapping process (e.g, moving to a single SMS to verify a phone number, and optimizing SMS delivery for key markets). Novel cryptographic mechanisms built into ODIS preserve the privacy of mappings, even though it is accessible to smart contracts. Libera, Kaala, Node Wallet, and Valora joined the SocialConnect beta program. When fully deployed, users across any of these wallets will be able to make transfers between each other with just a phone number.
What’s Next
Still with us? The roadmap is dense intentionally, as great innovation requires even greater aspirations. While well-known for being mission-oriented, this roadmap serves to instill not only confidence but excitement for the underlying technology that drives the thriving Celo ecosystem to continue to build.
Ready to help us ‘Build the Celo Evolution’? Great! Join the Celo community, and sign up for updates. In the coming weeks, we will be sharing more detailed roadmaps around the themes introduced in this post.
Chapter two is here… Come help us build it!
Tim Moreton (CEO, cLabs) and Marek Olszewski (Co-Founder, Celo | CTO, cLabs)
