I agree with the proposal. Chainlink’s infrastructure will enable a variety of use cases for ReFi founders, as well as unlocking new functionality for NFTs.
As a Celo smart contract developer, one thing Celo is missing is chainlink and its services like VRF, data feeds, external adopters and new functions.
Using chainlink we create new use cases in celo ecosystem and help us scale and adopt ReFi.
Integrating Chainlink into the Celo ecosystem could offer several benefits:
- Secure and Reliable Data Feeds: Chainlink’s decentralized oracle network can provide reliable and tamper-proof data feeds that can be used to trigger smart contract executions on the Celo blockchain. This could enable the development of more complex and sophisticated financial applications on the Celo platform.
- Cross-Chain Interoperability: Chainlink also supports cross-chain interoperability, which means that it can connect different blockchains and enable them to share data and execute transactions. This could help the Celo blockchain to interact with other blockchain networks and expand its reach.
- Increased Adoption: Chainlink has a strong and growing community of developers and users. Integrating Chainlink into the Celo ecosystem could help to attract more developers and users to the platform, which could ultimately drive adoption and growth.
Due to the above reasons, I am 100% in favor of this proposal.
I’m totally in favor of this proposal. Oracles are a base building block and I’ve seen around much requests for it. It will unlock many new use cases.
I was not aware it would need that much CELO (also curious about operation costs), but I see that, if not used is returned.
Could you give a breakdown of how you came up with that number? Transactions on Celo are rather cheap and with OCR the chainlink network also saves gas costs by only letting one node put the price on-chain. Even if we would run data feeds on celo at deviations similar to polygon or arbitrum it seems rather overpriced asking for (at current prices) 1.3M USD / Year, when we’re probably looking at 25-50k USD costs per year (and i’m being generous here).
This proposal seems disingenuous and as @diwu1989 mentioned the actual costs of accomplishing this are far lower than what is being asked for here.
Hey Celo community,
Michael from Chainlink Labs here. We’re excited about the opportunity for Celo to join the SCALE program and glad to see the great feedback, engagement, and support.
The CELO tokens proposed to be allocated to the Chainlink SCALE program in connection with the Community Proposal would go to Chainlink node operators who secure the Data Feeds operating on the Celo blockchain to cover their operating costs (e.g. gas costs). dApps on Celo do not draw on the funds allocated, but rather benefit from increased access to data provided by Chainlink Data Feeds. This includes both existing dApps on Celo, as well as newly deployed dApps that are made possible due to more readily available data from Chainlink oracles. The anticipated result is the expansion and growth of the Celo dApp ecosystem.
As mentioned above, CELO tokens proposed to be allocated to the Chainlink SCALE program would not be drawn by dApps, but rather go to Chainlink node operators to cover operating costs. Any Chainlink Data Feeds on Celo supported by the SCALE program would be callable by any dApp on Celo. Consumption will be reviewed regularly by the Celo Foundation and Chainlink Labs as part of an ongoing review process. The amount of Data Feeds deployed on Celo will depend on user demand for oracle data and will be subject to Chainlink’s security and economic evaluation processes to target a high level of data quality and tamper-resistance.
The operating costs of Chainlink oracle networks supporting Data Feeds depend on a number of factors that include but are not limited to: (1) gas costs of the underlying blockchain that data is being delivered to (based on anticipated future demand/supply of Celo blockspace), (2) the update frequency of the Data Feeds which is configured based on user demand and consist of a heartbeat and deviation threshold, (3) market volatility of the assets a Data Feed is reporting the price on (high volatility = more updates), and (4) the number of deployed data feeds to support the Celo ecosystem based on user demand.
Due to the number of unpredictable variables involved with Chainlink Data Feed operating costs, an exact number is difficult to provide. However, note that the proposal was structured such that at the end of the program’s existence, post renewals, any unused CELO from the Rewards and Fee Pool will be returned to the Celo Community Fund.
Chainlink node operators supporting oracle services such as Data Feeds are provided a margin of profit to ensure there are sufficient incentives for reliable and honest performance. The exact margins and amount of CELO provided to node operators supporting Data Feeds on Celo will depend on a number of cost factors, some of which have been described above.
Chainlink Data Feeds are operated by a geographically distributed collection of Sybil-resistant, security-reviewed node operators with significant experience running mission-critical infrastructure (across cloud services and self-hosted bare-metal infra). Node operators come from a diverse range of backgrounds and industries that combine their experience and expertise to secure the delivery of oracle reports on-chain.
Different categories of Chainlink node operators include: (1) DevOps nodes from organizations that specialize in operating blockchain infrastructure such as PoS validators, PoW mining pools, and full node RPC providers, (2) Enterprise nodes from institutions around the world that currently operate backend infrastructure for the traditional Web2 economy, and (3) Community nodes run by Organizations from the Chainlink community that are focused on supporting the ecosystem’s growth and have proven high levels of reliability.
Node operators are selected for Data Feeds based on a number of factors including their historical reliability as an infrastructure provider, their performance on other Chainlink Data Feeds live in production, their operational expertise in managing mission-critical infrastructure, and their ability to consistently maintain uptime even during extreme market volatility and gas price spikes.
The node operators supporting Chainlink Data Feeds currently live in production across various blockchain mainnets can be seen on the Data Feed visualization page. More information about Chainlink node operators can be found in this blog post.
In order to meet user demand and continuously improve performance, Chainlink services are updated from time to time to introduce new features and functionalities. Due to the dynamic nature of off-chain environments, swift updates may also be required in response to various externalities (e.g. token migrations, protocol rebrands, extreme market events, and upstream issues with data or node operations). In alignment with software development best practices, updates can encompass off-chain and/or on-chain processes.
On-chain updates take place at the smart contract level, where a multi-signature safe (multisig) is used to modify on-chain parameters relating to a Chainlink service. This can include replacing faulty nodes on a specific oracle network, introducing new features such as Off-Chain Reporting, or resolving a smart contract logic error. The multisig-coordinated upgradability of Chainlink services involves time-tested processes that balance collusion-resistance with the flexibility required to implement improvements and adjust parameters, and allows for a safe, secure, and rapid response to black swan events and other potential incidents on the order of minutes, minimizing service interruption for users.
More information regarding the on-chain/off-chain upgradability of Chainlink services can be found in the Chainlink FAQ and Chainlink documentation. For more information about the defense-in-depth approach to security for Chainlink Data Feeds can be read in the following blog.
This proposal is scoped to a three year term. Any renewals requiring more funds in the Rewards and Fee Pool from the Celo Community Fund would be submitted as an additional proposal. The goal of the SCALE program is to support the growth of participating blockchain ecosystems, such as Celo, such that ultimately that oracle operating costs can transition toward being fully covered by dApp user fees. This moves dApp ecosystems toward a holistic economic model that is more viable long-term for all participants.
Quarterly reviews will also be conducted between Chainlink Labs and the Celo Foundation to ensure continual alignment on services provided to the Celo ecosystem. Furthermore, as previously noted, at the end of the program’s existence, post renewals, any unused CELO from the Rewards and Fee Pool will be returned to the Celo Community Fund.
Hey @CLL_Michael, thanks for the thorough writeout, but it still doesn’t explain your insane ask here.
Let me break it down for you as i’ve taken a little bit of my time to create a dune dashboard that shows costs on a similar network, like FTM.
I’ve taken samples in FTM (the native asset, which in our case would be CELO) ran at a 0.1% deviation, ETH also at 0.1% deviation, a random altcoin in LINK ran at 0.5% deviation and a forex feed with CHF at 0.3% deviation. The first row shows all price feeds on Fantom.
With 0.1% on FTM and ETH, we have 2 outliers that do the bulk of the transactions but they get evened out by the relatively modest updates by other feeds like the forex ones or even altcoins.
Overall a typical update to a pricefeed consumes 200,000 gas and FTM averages somewhere at 40-50 gwei. Overall you have roughly 28 price feeds available on fantom and you’re averaging roughly something in the ballpark of 100k transactions per month in the last 6 months.
If we consider these variables in the last 6 months (~October2022), we’re looking at the following costs for you:
|month||cost in ftm||cost in usd|
The November numbers even include catastrophic industry wide black swan events and and insanely volatile month this march. Despite that you averaged 15471 FTM per month or 3972.5 USD in the past 6 months.(the USD number is FTM converted to USD at the time of transaction)
Now, lets’s consider the fact that we’re not Fantom and that our average gwei (despite the increase in minimum gas fees here) comes in at roughly half of that. The EVM equivalence means we’d also consume roughly the same gas per transaction as Fantom or any other EVM chain (~200,000).
This means that the same consumption above would have translated into the following numbers in CELO:
|month||cost in celo|
Or an average of 7735 CELO per month.
You’re asking for 166119 per month.
Now i understand that there are development costs and that running this service obviously needs to be a profitable business otherwise the node operators wouldn’t jump on this. What’s profitable enough though? 2x? 3x? even 5x? I’d get all of that, but you’re asking for a whooping 21.5x of what it actually costs you to operate this from a gas perspective. (i don’t even want to get into the part what this would mean in USD terms when crypto prices are trending up again)
I want to underline again that i understand that there are development costs, that node operators need to be profitable and that there are other costs like running infrastructure (RPCs etc), but i can only repeat what i said above. This proposal seems disingenuous.
Great proposal from @chainlink. I’m excited about it and hope it gets passed soon for these reasons:
The majority of the most used protocols rely on Chainlink oracles; Aave, Lyra, GMX, etc.
Forking protocols on Celo is not sustainable. Smart contract risk is a massive impediment to user adoption and brands like Uniswap and Aave immediately convey trust and security. Having chainlink on Celo accelerates the deployments of blue chip protocols.
DeFi on Celo has been stagnant. If you discount the Mento TVL, then the aggregate liquidity on Celo comes out to $40.35M (source: defillama). That’s really bad. For majority of DeFi users including myself, DeFi is about engineering the highest returns on my capital which becomes significantly easier to if there are more protocols/primitives on the blockchain along with the liquidity.
Simply put, more primitives leads to higher yields and higher yields leads to more liquidity!
Bridging on Celo has already improved significantly. Curve on Celo alone supports nearly $20M in USDC/cUSD liquidity from Ethereum through wormhole so Celo just needs more protocols.
I love Celo’s mission to make the things we build on blockchains useable to everyday people and many can agree that Celo has done a fantastic job fostering that spirit. But all of it depends requires deep on-chain liquidity! Without it, users are limited in what they can do and developers are limited in what they can build. That said, Celo’s path to becoming a major L1 like Polygon is clear and short. A few more primitives and the capital will flow in. Therefore, I hope Chainlink’s proposal despite the cost will be pass swiftly.
We can all agree that Chainlink joining Celo would be a benefit to the ecosystem.
On the other hand, literally, everyone sees that the number of 6 Million Celo is inflated severely…
Therefore, we need to ask specific questions to the Chainlink team, and please, this time answer them with calculations and facts, not vague answers:
- What tokens & other data feed with what heartbeat and price divination would be delivered for that price? Why these tokens you specify in the answer and others not? Can you provide a specific list?
- Historically from the last X period, i.e. 1 year, what has been the average margin of node operators & of Chainlink?
- Can you share a similar proposal/estimation for another ecosystem? Isn’t Celo charged significantly more than other blockchains for welcoming Chainlink?
And questions to Celo Foundation:
A. What specific teams need Oracle data and what type of data? Can we have a list of people / projects waiting before committing to almost $4M over 3 years?
Thank you all!
Thanks for your thoughtful reply to my questions.
The intention of my questions are to ensure that we are efficiently allocating scarce community resources, understand how they will be spent, and what the security assumptions are when using Chainlink oracles.
Is it fair to assume that all existing Chainlink Data Feeds would be made available to Celo?
What is the process for requesting and approving new subsidized Data Feeds that are not already supported by Chainlink?
This seems to be the most contentious part of the proposal because 5.9m CELO is a large ask without much transparency on how that number was calculated or how exactly funds will be spent.
Anecdotally, an oracle that Moola Market ran cost ~5-15 CELO per day in gas fees plus ~$27/month in server expenses. My back of the envelope math suggests that 6m CELO should support ~250 data feeds, every block, for three years.
Are there any initial or ongoing costs, other than payments to oracle nodes, that will be paid from these funds (i.e. setup fees, integration fees, marketing spend, etc.)?
How is the reimbursement payment to oracle node operators calculated?
Is the reimbursement formula “cost plus” where the reimbursement amount equals gas fees spent plus some pre-defined multiplier to cover operating expenses?
Who decides which nodes are selected to provide Data Feeds that would be subsidized with this grant?
If I interpreted the docs correctly, then the Chainlink multi-sig can add/remove oracle nodes, update parameters, and add brand new features. That sounds like a major source of centralization risk.
Would subsidized Celo network Data Feeds rely on an existing multi-sig or would a new one be established and maintained by Celo community members?
How many signers are on the current multi-sig ?
Are all the signers publicly known persons or anons?
Can Data Feeds operate without multi-sig oversight?
I don’t think anyone is disputing that Chainlink is useful and should be deployed to Celo.
Why not just deploy chainlink and start with a minimal amount of Celo grant to start with?
100k Celo, and then see how it goes for a few months first before asking for a few million dollars worth of Celo?
I’d be happy to start running Chainlink oracle reporters on my servers for a fraction of the proposed 6M celo ask. Once we have Chainlink running on Celo for a few months, we’ll have real world data on exactly how much infra + gas + overhead costs, and then you can request for a bigger grant to cover the full 3 years.
Does this make sense? I’m trying to propose a practical solution that doesn’t involve committing 6M celo straight away.
Hey Patrick, saw this and thought I’d add it to the convo.
PS I can’t wait to see this happen and am in agreement that getting a bit more detail on expenditure makes sense.
Especially for a smaller social/environmental impact oriented chain like Celo.
I had thought that Chainlink was very necessary for the Celo ecosystem and had voiced my desire for it to be implemented as soon as possible on various platforms. However, if this is how it’s going to happen, then I will vote against it. This proposal seems to have been made with the knowledge that we need them badly and is exploiting this need. As other members have also pointed out, the actual costs do not match up at all. Even if we put aside the fact that the cost does not match up at all, I do not think it is right to demand all three years of cost at once. Most of the amount requested in this proposal seems to be a fee for deploying Chainlink to Celo. I really wanted Chainlink to come to Celo, but if it’s going to be like this, then it’s better not to have it at all.
Also it is said that the unused fund will return to the Celo community, but no one from Celo is included in the multisig management. Why?
Are there any pre-commitments from Aave or GMX to join Celo after Chainlink enters the space? Correlation is not causation and it’s a rather expensive experiment to verify this hypothesis.
Celo was always a very unique chain with its set of values. I’m not sure if trying to be another DeFi chain throwing away multi-million grants is the way to go.
Although not yet at the desired size, Celo has a significant economic hinterland and community. Even in a bear market, we reached nearly 140,000 active addresses. This is a record. GoodDollar created 6,000 new users in just its first week. Despite being very new, 100,000 Celo Domains were minted via Masa.
However, I believe that Chainlink did not show us the respect we deserve with this offer. This is not just about our gain. Chainlink will also have the chance to enter a very important ecosystem and expand its market dominance through the Celo ecosystem. They will benefit from this too. But as far as I can see, Chainlink does not value Celo this way. I see this as somewhat dismissive. There is only one thing I ask of community members. Please remember that we are a Network that should not be overlooked in this way. We really have a strong network and community. We don’t have to accept the harsh terms imposed on us by Chainlink’s condescending attitude. Having Chainlink would have been nice, yes. But this is not the end of the world. Let’s not mortgage the future of Celo for Chainlink. We can consider other alternatives. Deep alignment with the Ethereum is an important item in Celo’s new roadmap. Maybe new opportunities for oracle solutions will emerge from there.
I was hearing AAVE deployment was being held because of the Chainlink integration issues
Today I learned I need to be running a Chainlink node on Ethereum.
Regarding this proposal, I think everyone wants Chainlink deployed on Celo, but are balking a little at the upfront commitment.
Other than repeating a community discussion and rallying on-chain votes, what is the downside to reducing the CELO request and commitment to 1 year and then re-evaluating the economics? 3 years is a decade in the crypto-world.
Hi all, we appreciate the discussion and feedback that the Celo community has provided regarding the proposal. This comment should hopefully provide some additional clarity and insight into questions posted within the thread, particularly in regards to the amount of CELO to be allocated into the Rewards and Fee Pool.
The CELO allocated as a part of this proposal will only be paid to Chainlink node operators (independent third parties) for the purposes of covering their operating costs of running oracle nodes on the Celo network. None of the CELO funds from this community proposal will be allocated to Chainlink Labs.
The allocated CELO that is the subject of this proposal will be deposited into the Rewards and Fee Pool contract, which will be jointly governed initially by Chainlink Labs, the Celo Foundation, and a Celo Community Fund representative. Quarterly reviews will also be conducted between Chainlink Labs and the Celo Foundation to provide an additional layer of ongoing governance and ensure continual alignment on services provided to the Celo ecosystem, including usage of current feeds, demand for new feeds, and management of the tokens in the Rewards and Fee Pool. If Chainlink Labs is not using the funds as prescribed to compensate node operators, the Celo Community representatives and Celo Foundation will be able to withdraw CELO from the Rewards and Fee Pool on their own and return them to the Celo Community Fund.
The creation of the Rewards and Fee Pool structure allows CELO to be drawn down over time (specifically a three-year period) in order to pay Chainlink node operators on Celo for their operating costs. This means that the CELO allocated as a part of the proposal will not be paid lump-sum to Chainlink node operators immediately, but effectively streamed over time. At the end of the program’s existence, post renewals, any unused CELO in the Rewards and Fee Pool will be returned to the Celo Community Fund.
We acknowledge that the proposed allocation of 5,980,314 CELO is not an insignificant sum for the Celo community. However, this amount represents the upper bound of anticipated operating costs for Chainlink node operators on the Celo network over the next three years. This factors in numerous unpredictable variables that impact cost (described below), including factoring in the potential for significant growth of the Celo ecosystem over the next three years and a resulting increase in demand for oracle services.
Therefore, the amount of CELO to be allocated as a part of this proposal can be seen as the creation of a budget for the explicit purpose of covering operating costs of Chainlink node operators over a three year period.The pre-allocation of CELO to this budget is intended to allow for efficiently responding to market demand and meet the evolving data needs of dApps in the Celo ecosystem over the next three years, while also streamlining the payment process to Chainlink nodes as the Celo ecosystem expands. Furthermore, any CELO that is not used from that budget by the end of the program (e.g., costs were less than the upper bound) will be returned to the Community Fund.
When determining the upper bound of anticipated operating costs for this proposal, the following were some of the unpredictable factors taken into consideration:
The number of Chainlink Data Feeds to be deployed natively on Celo over the next three years will depend on user demand, but we anticipate by the end of the third year, there will be at least 100 data feeds, with potential for there to be much more. The exact number, however, will depend on how demand for such data evolves over the coming years. At launch, we plan to launch six data feeds around BTC/USD, ETH/USD, LINK/USD, USDC/USD, USDT/USD, and CELO/USD. We are happy to work with dApps on Celo to consider the data they require.
While Price Feeds are the first offering to be launched by Chainlink on Celo under this proposal, the broader strategy also considers the launch of a wider range of Chainlink services in the future. This includes Chainlink VRF to support gaming/NFTs on Celo with verifiable randomness, Chainlink Automation to automate the execution of any Celo smart contract, Chainlink Functions to bring support for any Web API to Celo, as well as sustainability-focused Data Feeds to support the creation of meaningful climate and ReFi focused use-cases. We see Price Feeds as being the tip of the iceberg of oracle services, with other services arriving based on demand.
Oracle networks like Chainlink Data Feeds publish data on-chain which incurs a gas fee for every transaction. The exact amount of fees paid for gas depends upon the supply and demand of blockspace provided by a blockchain. While historical data about a blockchain’s gas costs can be extrapolated to guess what the future costs might be, the actual gas costs may significantly differ as adoption of the chain increases. Particularly, once Chainlink oracles are made available on a chain, developers are able to build more applications, which attracts more users, which leads to greater transaction volumes.
Chainlink Data Feeds update based on trigger parameters (heartbeat + deviation threshold), which impact how many on-chain transactions need to be made during a given period of time. The exact configuration of trigger parameters for a given feed depends on user demand and user requirements (e.g. derivatives vs. insurance), as well as the average volatility of the assets being tracked by the feed. Increased market volatility leads to more on-chain updates.
The operating costs for Chainlink node operators, in addition to gas, are in fiat (e.g., cloud infra, data provider subscriptions, labor, etc). The gas markets for blockchains are also commonly priced in fiat, while being paid for in native gas coins. Given the volatility of market valuations for crypto assets (particularly over the past year), the amount of USD-denominated operating costs that a specific amount of CELO can cover can change significantly over time. We cannot fully predict what crypto asset valuations will be in the future, and therefore this proposal budgets in such unpredictability.
We believe this proposal represents mutual alignment between the Celo and Chainlink communities. By joining the SCALE program, the Celo community can accelerate the growth of their ecosystem by providing developers increased access to external resources provided by the industry-leading web3 services platform operating natively on their network. As the Celo ecosystem continues to grow and mature, the operating costs of oracle networks can increasingly transition to be fully covered by dApp user fees.
In addition, Chainlink is highly aligned with Celo’s focus on sustainability and regenerative finance (ReFi), such as by providing the climate ecosystem access to greenhouse gas emissions and other data to support automated carbon credit programs, reforestation through direct air capture, sustainable financing rates, parametric insurance, and more. By working together with the Celo community and supporting their ongoing climate-focused initiatives, we hope to build a more sustainable world powered by Web3.
Additionally, if you’re interested in learning more about this proposal, Roger Brogan, Van Vaziri, and Niki Ariyasinghe from Chainlink Labs recently joined the latest Celo Governance call where questions from the community were answered (recording, notes).
Thanks for sharing this proposal @CLL_Michael. I would be particularly interested to hear answers to the points raised earlier in this thread about the actual costs involved in delivering data feeds, which don’t seem to have been provided in your recent post. For a comparison, API3 have provided a fully costed proposal that is significantly cheaper, and promises better granularity and liquidity preservation for dapps through oracle extractable value.
It would also be interesting to hear if Chainlink plan to deploy VRF as a result of this proposal, which seems to be assumed (even thought it is only supported on a small subset of chains that data feeds are currently provided to), and which additional finished Chainlink products (not planned like DECO, CCIP, and Mixicles) will be deployed to Celo as a result of this proposal passing
Just an aside to devs here interested in smart contract randomness that Celo has a built-in pseudo-randomness source that accumulates pseudo-randomness from validators. You can use it for a small amount of gas. I’m not making any representations as to whether it’s better or worse in any way than other services, except to say that it is used in Celo’s proof of stake implementation to determine a randomized order of validators to propose blocks within an epoch, and in other places in the Celo Core Contracts.