Celo Validators: Thank You, and Where Do We Go From Here?

[marek]

With governance proposal #271 passing recently, it feels like the right time to reflect on the change. That proposal took an unexpected turn in the 11th hour. Honestly, I assumed the community would go with lowering the validator size first, and so I haven’t fully wrapped my head around all of the implications. While the outcome saves the ecosystem a big chunk of cost, it’s clear that it has some negative consequences as well, and I wanted to create space for brainstorming ways we can mitigate them. The change also clearly marks the end of an era, and it deserves a moment of reflection and gratitude.

Where do we go from here?

With the way the governance proposal went (our first multiple-choice proposal!), rewards continue to stakers but validators have stopped receiving validator payments. Stakers will receive rewards if they vote for an existing validator group, so long as the group is elected. This means that if validators decide to stay registered and remain elected, governance can choose to re-enable validator rewards at any point in the future, effectively enabling the community to re-activate the role of validators without necessarily rebuilding the network effects that go with everyone picking validators they trust.

That said, the current status quo doesn’t give validators much incentive to stick around. Reflecting on this, perhaps a good direction to explore would be adding a commission field, where stakers can share a portion of their rewards with validators, similar to how Proof of Stake works in Cosmos.

I also wanted to acknowledge that some validators chose to reinvest a meaningful portion of their rewards directly back into the Celo ecosystem. They supported apps, infrastructure, public goods, and local communities aligned with Celo’s mission. That kind of commitment goes beyond running nodes. It reflects real care for the health and future of what we’re building together.

I personally don’t want that kind of reinvestment and stewardship to disappear. I’d love to work with folks here to identify funding mechanisms that can continue supporting these efforts, potentially through ongoing grants from the Community Fund. If you’ve been doing this kind of work, or have ideas for how to structure it sustainably and transparently, I want to hear from you!

Thank You

I also wanted to take a moment to say thank you to all the validators who have served the Celo community over the years. Many of you believed in Celo before there was a mainnet, before there was certainty, and before there was traction. You showed up early, ran infrastructure, participated in governance, and helped secure the network through its most formative years. You were there as we experimented, iterated, and learned what it meant to build a payments-focused blockchain targeting not a casino, but real-world use cases.

Many of you also played a critical role in helping Celo navigate one of the most significant transitions in our history: the move from an L1 to an L2. That transition was technically against your personal interests, and yet you showed up and helped with the technical work, performed huge changes to your infrastructure, and helped with countless dry runs. The work was completely invisible to many people, and so I wanted to highlight it here. In many ways, you helped make the hardfork possible.

And so, I wanted to end on a personal note by saying thank you! Thank you for your time, your energy, your belief, and your service. Celo wouldn’t be what it is today without the validators who helped carry it from an idea into a living ecosystem. Even as roles change, the respect and gratitude remain.

Here’s to you all!

Marek

PS Here are some pics I found of some of our validator community:

[WillRuddick]

Thanks Marek - truly. I really appreciate you making space for reflection and for naming the real stewardship many validators brought to Celo (often quietly, and often at personal cost).

I’ll keep this brief because many of us are still processing how flawed and limited the multiple-choice process felt in the end. My biggest sadness is that your more balanced pathway wasn’t actually on the ballot. In particular: reduce the elected set, but also adjust (and potentially raise/remove) the max cap in the D’Hondt allocations so the outcome reflects total stake and preserves the most decentralization possible while still right-sizing the set to what’s actually needed for RPC services. That was the best lever combination in my view - and it would have avoided the blunt-force outcomes we ended up voting on. I referenced this specifically here (Point 2): Reduce Elected Validator set from 110 to 55 - #36 by marek

… exploring mitigations (commission field, etc.), I’m in. But I’d strongly prefer we start from restoring credible commitments and fixing the governance mechanics that got us here - then build forward with a transparent, auditable path for RPC reliability and sequencer transition.

[Tomer-Ba]

Thank you Marek for opening up this conversation, this move sure summarizes a beautiful era but ensure we move forward pushing ourselves to think of better stronger versions of the ecosystem.

Something I would highly recommend in what ever solution is to avoid “committees” of kinds this is what will move us from decentralization- to politics

Onwards!

[Thylacine]

Thanks for the shoutout, any TGCSO alumni in the room?

[jim380]

Nearly all of us haha

[marek]

Sadly, I only met and had photos with a small fraction of our validators

[Stakecito]

Hey Marek, thanks for making time to discuss solutions after prop #271. To de-risk next steps, I think we should translate this into a few testable questions:

1. Bridge option: Is there a credible, time-boxed middle ground that restores some rewards quickly, explicitly as a bridge while we evaluate longer-term models (commission field, stewardship funding, sequencer roadmap clarity)?

2. Minimum incentive: If validator payments stay at 0, what’s the minimum incentive needed to keep strong operators registered/elected so governance can re-enable rewards later without losing the “trusted set” network effects?

3. Timeline: What are the expected milestones for the next phase (especially sequencer decentralization) so any interim bridge has a clear sunset?

[AGx10000]

@marek

a good direction to explore would be adding a commission field, where stakers can share a portion of their rewards with validators, similar to how Proof of Stake works in Cosmos.

let’s do some simple math.

currently top elected groups have something around 3m $CELO staked. it’s about $425k in dollar terms. how much of the inflation rewards is that? something like $17k a year? (i’m using 4% but that does not really change much even if it was 10%). what level of commission would that require to both satisfy validators and still be viable to stakers?

10% commission gets the validator a “hefty” pay of $1.7k per annum. astonishing. this barely covers a cheap server, leaving no space for anything else. let’s not forget: we are talking about decreasing stakers’ income here. not sure this would be much appreciated. historically CELO had this strategy and now it’s changed. what’s next? income to zero? hmmm… sounds like central banking to me

even at $CELO worth 1$ it’s still only $17k a year. not as bad but still not very sustainable to be talking about any real business here. i guess if the foundation had any realistic plans about pushing the number beyond $10, there would be no talks about cutting expenses. so let’s not pretend we know how to become rich overnight

one could obviously argue that validators will need to do marketing to get more stake. in reality, in 5+ years has anybody seen enough successful medium-sized (not p2p-sized) validator businesses effectively attracting stake from a large audience ? examples are rare! most small-to-medium validator businesses across all ecosystems are relying on foundational stake or staking pools

and it’s even harder to get stake when $CELO is not getting any influx of stakers in general.

i do not see any realistic path of getting enough experienced validators with these numbers if their income would rely solely on the cut from inflation rewards

in an ideal world if there was a huge array of

• projects with deep pockets (building on CELO)
• traders with deep pockets (trading on CELO)

we would’ve seen a lot of incentives for validators from these 3rd parties: pools attracting stakers with LSTs and giving stakes to validators “because of decentralization”, arbitrageurs paying validators to get access to data, white label validator services for projects, much more user fees for transactions lending in validator signer accounts etc cetera, et cetera. but that’s a state only a handful of networks were able to achieve (not giving any names but it’s top10 projects). and even there during market downturns there are a lot of validators struggling to keep their numbers positive

paycheck model was quite unique and was good enough to make sure your network is stable and validators are not leaving because/if/when base currency is declining

also validators were not involved in the “run-to-zero” rat race that’s happening in almost all PoS networks, trying to attract stakers by setting fee to 0%.

validators were neither getting enormous pays, but at least that was stable.

probably not very sustainable in situations when the foundation runs out of cash but overall - not the worst model of all.

question remains, does $CELO need a decentralized set of validators at all as it sometimes looks general audience does not really care about decentralization and cares only about “numba go up” but that’s another topic i guess

my take is: a fixed payment for validators is good unless you have a very strong network with a lot of economic activity

[AGx10000]

having said all of the above, reinstating fixed validator payments upon starting the decentralised sequencer sounds like a good idea to me. the network would then have a reliable set of validators whose business model is not punitive during market downturns. (again, this is less reliable for the foundation’s treasury itself, but this may be one of the bets for the brighter future)

it would also make sense to “promise“ the current validator group some level of support (would it be stake or whatever) - this will ensure we would not “forget” about CELO and would stay in touch.