To clarify, I’m referring to the allocation of the CCF when I mentioned funding, not necessarily the $220k expenditure. For comparison, the entire “Ecosystem Growth“ allocation for Season 1 is capped at $3M.
The unfortunate timing is that had this been submitted as an alternative to Stabila, it could have had a higher chance at success with refinements from the community. Celo funding now operates in a tender style bidding system every 6 months.
That said, I wish you the best in the governance process, it remains a valid path forward, albeit a more challenging one at this stage.
If I could offer one suggestion: it would have been more effective to start with a smaller ask, demonstrate traction, and build credibility incrementally before seeking such a significant allocation. This would have made the proposal easier to support.
and i don’t think it’s an alternative, we have worked with stabila on similar but different side of the same problem that we all try to solve together (look at the stabila proposal you’ll see my name under the multisig)
Thanks for providing the links, I was not aware because this proposal itself did not contain any historical context unlike other similar proposals. It would have been good to include the context to make it easier for voters and delegates.
Now that I have established some context after reviewing the original proposal from 2 years ago, CGP 84, and the report from March 2025, I have several critical questions and concerns:
You mention $1.6M existing Credit Collective liquidity. Is this the same 1.6M cEUR original funding granted by the CCF in 2023 through CGP 84? If it is indeed the same funds, where did the EUR/USD conversion gains go? Given that FX rates have been consistently above parity since July 2023, 1.6M cEUR should represent a higher USD equivalent and that disparity seems to be unaccounted for.
Where have the gains realized from the credit deployments gone? There’s no clear accounting of interest income or profits generated from community-funded capital. Are the metrics and financial reports of these specific credit deployments public? The only dashboards available appears to track high-frequency trading bot activity, not actual credit performance.
If the current $1.6M is not the same as the original 1.6M cEUR grant, where are those original funds currently deployed, and what returns have they generated for the community?
Credit Collective appears to have pivoted away from your original mission of real-world credit and impact-driven products to becoming primarily a market maker focusing on high-frequency bot trading and arbitrage. What drove this fundamental shift in strategy? Do you plan on retaining the original funding (granted for the original credit mandate) and re purposing it for this new market-making focus should this vote pass?
This proposal exposes community funding to substantial impermanent loss (IL) across all proposed pools. Are there risk mitigation strategies in place? If so, why are they not detailed in this proposal? Why wasn’t IL mentioned in the risks section?
In the current proposal, you want the CCF to fund liquidity pools and R&D arbitrage bot infrastructure, then Credit Collective and others will run bots to generate profit from this infrastructure. Where does the profit generated by Credit Collective go? How does the community that funded this infrastructure capture value from its success?
In my opinion, there appears to be a fundamental misunderstanding of Celo’s mission. Celo aims to build prosperity for all through real economic activity, not to optimize for MEV extraction and high-frequency bot volume.
Looking at your proposed KPIs, could you explain how these metrics align with Celo’s Vision 2030 and overall mission of prosperity for all?
Regarding your multisig membership in both Stabila and Credit Collective proposals, combined with your long tenure in this community, raises concerning optics about the timing of this proposal. Both requests (with fundamentally the same objectives) together significantly exceed the $3M seasonal cap established for Ecosystem Growth. Is this an attempt to bypass established governance limits through coordinated but technically separate funding requests? The community deserves transparency about whether these initiatives are being coordinated to circumvent resource allocation constraints put in place for precisely this reason.
I believe these concerns require detailed responses before the community can make an informed decision about such a significant allocation of scarce resources.
@Tomer-Ba We spoke about this proposal in the governance forum a couple weeks ago.
Further question: who is building the MEV/searcher strategies and are they documented / backtested elsewhere? Or is this all new development with attached resource costs? Do you have any track record of designing these systems and could we see the code and results (on other networks, if applicable)?
Unlike classic crypto arbitrage, where price differences can shift between sides (sometimes asset X is more expensive on the DEX, and sometimes it’s more expensive on the CEX), in stablecoin/fiat arbitrage the gap is typically one sided it’s almost always cheaper on the CEX compared to the DEX, and rarely the other way around (which is what actually creates the opportunity to close an arbitrage position). This dynamic requires deep liquidity on both sides (the CEX and the DEX).
Another problem is that both fiat and stablecoins often have low liquidity, which results in small profit opportunities (although, if we provide deep enough liquidity, profits could increase).
The combination of these two issues makes stablecoin arbitrage less attractive to traditional arbitrage traders.
About the Code
We have tried using off the shelf no code products so far, but unfortunately none have met our needs.
We plan to use the capital to match existing open-source solutions (such as Hummingbot and others) and adapt them to Celo’s needs. We will also explore open source MEV solutions and tailor them for Celo.( we have an initial version of the arbitrage running)
The operational capital will also be used as liquidity on both sides.
Our ultimate goal is to make these markets more competitive and profitable for other traders, creating an efficient market — not to operate as an arbitrage company ourselves.
We will do it in few stages
bringing the liqudity to these markets
Find the right abtrage code, and matching it to celo needs (the leading one seems to be humminbird, but we are still in development, we already have an inital version running)
Finding the right open source MEV solution that we can match to Celo needs.
doing all the code from scratch is an insane amount of work, and hopefuly unnecessary today
Thanks @Tomer-Ba , reason I ask is some people questioning the various line items for this proposal and I wonder if it might read a little tighter if the in-house MEV part was excluded. I feel if the liquidity comes then the already existing searchers on other EVM chains will come across naturally no? (Although that might take some time, but they would flow where opportunities arise, as far as the entire ecosystem is economically rational)
Plus it’s unclear to me who the beneficiaries are of the MEV development part of this proposal. If everyone goes extremely well and the proposal suceeds and you deploy liquidity where it’s needed, and come up with some great automation / MEV / market-making tools that deepen liquidity and make the ecosystem better overall, if there’s any alpha in the strategies where does the revenue go? Is this earned to Credit Collective as an entity or does it come back to the treasury etc?
I’m supportive of this proposal in general, as I think the intent of this Season is, to rephrase it a little: “get serious”, and I agree that activity flows to where the money is. So I like the idea but feel the proposal could do with some sharpening around some of the details.
I can see a world of this proposal without the MEV part. Let’s divide it into 3 sections:
MEV
Classic Arbitrage
Liquidity Management
The assumption you have here is the same assumption we had when we published this post.
And changed our strategy from private credit to on-chain FX (we understood private credit has a problem with small currencies due to high slippage, so we decided to go after the core problem).
When we found out it simply didn’t work, we went and talked to arbitrage traders and told them:
“Hi, look! You have an arbitrage gap here!” (see the images in the original post on how big the gap is).
What we found out is:
Celo’s general liquidity is too low — the low-hanging fruits are not here (BTC, ETH, USDT to Celo), or at least not deep enough for the companies we talked with to make the effort of coming to Celo.
Small Stablecoins — due to the 2 problems described, even if they come to Celo, the low liquidity and the very long closing cycle of the arbitrage make the liquidity-to-profit ratio not very compelling to them.
So we asked: what’s the minimum depth that will make it time-worthy?
$1m liquidity depth seemed to be a number a few people agreed on as “minimum valid liquidity” for them to make money off so we have a bait to bring them over.
On the smaller stablecoins, sadly it seemed too far for them, especially with the current volumes and depth, with the inherent problems I described above (low liqudity + longs arbitrage cycles).
The experiments we made, both with Mento stablecoins and Minteo stablecoins, brought very significant volumes to both of them. Our experiments combined liquidity providing + simple arbitrage.
See here the post by Mark from Fast Lane (Dex to Dex) & Carbon (a sophisticated market maker), where he describes the results. This was a combination of a grant from CC to them + the liquidity.
So, I understand why MEV sounds scary. Let’s give up on MEV and talk about simple arbitrage — still, I don’t see anyone closing the arbitrage in the current liquidity depth (which honestly might change with Mento’s new FX version, as it will create very deep liquidity with very low slippage).
But last word to do defend the “tipping fees” / “MEV”
As Celo holders - the revenue of the sequancer - should be important to us - and it’s not discussed enough - see bellow base daily revenue composition by fee component guess what’s in blue, flywheel solutions involve all stake holders.
The assets that are used for liquidity are owned by the governance, just managed by us — meaning going up or down, it belongs to the governance.
The profits from the arbitrage — the goal is to create an open-source, well-documented arbitrage tool that connects Celo’s important endpoints + centralized exchanges, so anyone can activate the bot, keeping no “secret alpha” to ourselves.
Our hope is that this will be our last funding request, and we will become sustainable by operating this arbitrage bot.
It very much reads from your writing that you are coming with open heart and open mind to the discussion. Whatever decision you make, it shows that it came with good intentions and only care for the community, we are flexible to adjust the proposal and make pivots in our strategy, pivots are not a weakness, but the only way to win.
