Celo Cosmo-Local Credit Network - Season 1 Funding Proposal

Governance Governance Proposals
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We (sargo.io) are in full support and have been supporting Dr Abdul at Lukenya University on this implementation of the Sarafu.Network.

What we’ve really come to appreciate about the Sarafu network is the way it flips the traditional model of credit and liquidity on its head. Instead of depending on centralized issuance from a bank, Sarafu provides a trusted anchor that allows the community itself to begin issuing credit based on the real goods and services they have to offer. That credit then circulates in a sustainable way — repayments feed back into the pool, which in turn allows more credit to be extended, more shops to accept it, and more students to access what they need to pursue their education. It’s a circular system that keeps growing stronger the more it’s used, and that’s a big part of what makes Sarafu so unique and impactful.

Excited to see how such localised coordination can be scaled. Serving as an access point to wider DeFi.

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AbdulHakim from Resilient Community Waqfs and Lukenya University here, and we fully support the direction that Grassroots Economics and Sarafu.Network is taking as well as this proposal they are making to the Celo community.

GE and Sarafu have been providing the technical infrastructure upon which our innovative, ethical, and shariah-compliant Celo-based credit guarantee funding model runs. We can confirm that GE and Sarafu are committed to and have been supporting the Celo community-based coalition we work with, which includes other partners such as Prezenti, Sargo, Pretium.

The GE team has a long and extensive experience working with both rural and urban communities around the world, together with a deep commitment to empowering local communities to develop and manage their socio-economic commons using universally available mobile blockchain solutions. I have no doubt that they are best placed to help Celo lead this glocal solution to pressing real-world problems.

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The fact that transparency, accountability, and auditability are built in from day one is already a major step forward. Too often, I’ve had to repeatedly ask entities to publish financials, only to receive delayed responses and vague records. In some cases, we’ve seen nothing more than a few spreadsheet rows to justify hundreds of thousands of dollars. Others promise “transparency,” but years later, nothing materializes in practice. Commitment to such mechanisms from day one should be the baseline standard for all Celo funding going forward.

Most receiver entities today operate on a kind of “labor-for-grant” model, but with guaranteed pay, because they are self-controlled and lack meaningful external oversight. They can draw down their full community fund allocation with no fear of clawback, because the mechanism doesn’t exist. This proposal’s use of parametric tranche releases and clawbacks, is again, another huge improvement, since it effectively forces performance and accountability.

I also appreciate that the proposal introduces two models:

  1. Labor-for-grant (“work-off”) certificates: allowing debt obligations to be cleared through verifiable community service or contributions.
  2. Credit-and-repayment: a more traditional credit system backed by commitments or collateral. With this being the primary model to foster commitment circulation within the network.

The first model is necessary because the community cannot realistically leap straight into a disciplined credit-and-repayment system. Forgive the blunt example, but similar to addicts transitioning off their addiction, a “controlled substance” is needed to prevent shock and withdrawal. In this case, the work-off model acts as that transitional mechanism, easing the shift towards healthier financial practices. That said, to avoid abuse, it should come with:

  • A high bar for eligibility (e.g. only for clear public goods).
  • A cap on usage, to ensure it doesn’t undermine the overall system.
  • A clear framework for when and how certificates can be unlocked.

For the second model, I suggest prioritizing highly trusted actors within the existing ecosystem to reduce default risk. For example, startups vouched for by reputable entities and backed by redeemable tokens as collateral.

Finally, I’d recommend focusing early deployments in regions where reciprocity and mutual credit traditions already exist culturally, such as Stokvel in South Africa. This cultural alignment will make adoption smoother.

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Hey @kamikazechaser, pre-applications for the SDG grants are now live!

This initiative could be a great fit for the program, which issues grants up to 25k cUSD for onchain solutions to develop new SDG-aligned features enabling expansion and growth into new markets.

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I think this proposal represents true innovation that meets communities where they are at. Commitment pooling is the oldest form of value exchange on the planet. Long before we gave monetary values to all goods and services people brought their own unique value and exchanged it for the goods and services they needed. This practice is still alive in communities globally who have been left out of the current systems.

Celo has always been focused on and a leader in building strong communities and network effects by providing new digital tools that are accessible globally. From the early focus on mobile first to the development of minipay Celo is becoming the chain of choice for communities that have been left behind by the current systems.

This proposal is an opportunity for Celo to combine modern payment rails with ancient systems of value transfer. It is a statement that TVL and a networks value can be based on more than money. While most of crypto focuses on financial capital this proposal provides an onramp for the other seven forms of capital (material, intellectual, experiential, living, spiritual, social, and cultural).

While this is a large financial ask I think it is right sized for this pilot. Small pilots have already been conducted by Sarafu Network and others with great success. This proposal will expand this experiment to new communities and onboard thousands of new users to Celo who do not have access to financial capital but have other forms of capital to commit.

A bit about myself: I am Jon Ruth the co-founder of The Solar Foundation which focuses on access to energy through funding solar energy projects in rural communities. We have built strong partnerships with communities in Tanzania, Kenya, Uganda, Nigeria and Liberia. We have also been experimenting with commitment pools as a way to fund solar energy. I think some of these communities would be strong candidates for this initiative.

I have personally spoken with the stewards developing this proposal and look forward to supporting it as a Steward and champion of this innovative initiative.

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At AgroforestDAO we have been using Sarafu Pools since January and it feels like a tangible application to use for seasonal commitments from people stewarding long term agroecosystems. They can create vouchers for tools and services that can be exchanged between farms just like “Mutirões” are traditional exchanges of time. Loans could follow seasonal patterns that would be noticed by other farmers what make it easier to adopt. Local exchanges of time, counseling, machinery and seeds could now be monetized, not only final products.

I am very supportive of this proposal, thank you for the great work Sarafu Team.

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Thank you Mohamed and Will for this inspiring proposal. The pioneering work of Grassroots Economics lights up pathways to absolutely essential compassionate and living systems of economic coordination. We at HAUMEA will be seeding a garden pool in service to the cultivation and strengthening of indigenous-led agro-ecological food & medicine cooperatives, as a part of our inquiry into what Living Earth Finance can become. This will be another version of what a Cosmo-local pool can look like, with a stewardship council from various nations representing coops in bioregions across different continents, or as a start LATAM focused depending on how relational kinship commitments will unfold in the coming months. We imagine potentialities of preservation of Other Worlds and ways of being human on Earth by infusing monetary energy into the Pluriverse. Unlocking Human Life-Force, building food sovereignty and strengthening vital Gardens of Ecological Culture.

In solidarity, Mikkél.

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The widespread concern over Celo ecosystem spending and lack of accountability is critical (see Validator Count Reduction and Riding the Celo Bus Together) and has reached a state where it is actively preventing builders like me to engage with the ecosystem and attract talent and partnerships.

As we currently discuss a holistic ecosystem funding strategy for Celo, I want to re-highlight the Celo Cosmo-Local Credit Network Funding Proposal as the best model for future ecosystem spending. In my experience working with Grassroots Economics, I can vow that @WillRuddick and @kamikazechaser embody the integrity Celo needs.

This proposal fixes the current system through two structural mechanisms that I believe need to be urgently addressed:

1. Structural Honesty & Conflict Management

  • Conflict Visibility: Crucially, any conflict of interest is visible and explicitly managed.
  • Separation of Power: This model ensures the “builders” (recipients) and the “approvers” (the neutral Stewardship Council) are separate. It prevents opaque self-funding and removes the ability for gatekeepers to “grade their own homework.”

2. Accountability by Code (No More Evasion)

  • Stepwise Funding: Funds are released only upon hitting on-chain KPIs via parametric triggers, not discretionary approval.
  • Mandatory Reporting: This mechanism makes it impossible for grant recipients to ignore transparency requests (like those seen in the MiniPay Grant thread). Continued funding requires continuous engagement and measurable results.

Finally, and most importantly, this critical infrastructure can provide the needed trust and soil within our community to rebuild the culture and values we publicly stand for.

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A lot of focus has been on how to scale TVL into networks of pools while increasing settlement (transactions)

I think the quiet revolution in finance - is not in AI, not in speculative coins, not in central-bank tweaks.

It’s in how we treat commitments (on-chain).

Think gift cards, purchase orders, warehouse receipts, community vouchers. When these claims are listed, priced, and limited inside commitment pools, they can move through a network and settle faster …. routing obligations to the people who can actually fulfill them.

Why this matters:

Collateral that circulates → higher settlement velocity, lower defaults
Transparent limits & indices → trust you can audit
Federated pools → local governance, global routing (cosmo-local)

We’ve been building toward a network where real production (not speculation) drives coordination. Small fees fund routing, liquidity, and guarantees. The result is a fabric that helps SACCOs, MFIs, co-ops, SMEs, and banks settle faster with less pain.

:eyes:

Peek ahead: we’re exploring a network token launch on Celo for 2026 that shares fees with service providers (liquidity, routing, guarantees) and anchors governance. Utility first. Speculation last.

n.b. Pools can also run without a token - this is about capacity, not hype.

If you care about:

… turning purchase orders & vouchers into routable collateral,
… faster settlement for community treasuries and lenders,
… auditable guardrails (limits, oracles, guarantors, circuit breakers),

then you’ll want to read the full piece (see below).

This is the type of tokenomics I hope to see increase TVL on Celo dramatically.
All your inputs are welcome!

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Riding the Celo Bus Together - An Urgent Invitation to Safe Dialogue and Real Repair
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Continuation on this thread here for DAO and token launch preliminary plans:

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