Why Grassroots Economics Is Voting NO on All Three Options
After careful consideration, Grassroots Economics will be voting NO on all three proposed options. Each proposal, reducing the validator set, cutting validator rewards, or reducing rewards to zero, would materially harm our technical and field operations. By extension, they would undermine the communities we serve and the real-world usage on which Celo’s long-term value depends.
Validator rewards are not surplus income for us. They directly fund:
- Core technical infrastructure and operations
- Local liquidity seeding
- On-the-ground deployments in vulnerable and underbanked regions
These activities are not speculative. They directly drive transaction volume, TVL, and stablecoin usage in environments where traditional finance does not reach.
Reducing the validator set or rewards by half produces the same outcome more slowly. It erodes the economic foundation that enables mission-driven validators to operate sustainably. In practice, all three options shift value away from decentralized infrastructure and potentially toward discretionary spending elsewhere, without addressing broader budget issues.
Governance and Process Concerns
We also have serious concerns with how these options have been framed and presented:
- Insufficient data: There is not enough publicly available analysis to justify a reduction to 55 validators. That number, or any simple halving of the set, appears arbitrary rather than evidence-based. We have shared our own D’Hondt simulations, validator rewards dashboard, and Celo collateral forecasts, yet none of the proposals meaningfully engage with this data.
- The “zero rewards” option is a high-risk nuclear measure: It risks alienating an entire class of technical contributors, while likely triggering mass validator deregistrations and harming stakers. The risks and second-order effects of this option have not been rigorously examined, making it inappropriate to present as a viable choice.
- Broken transition commitments: Sudden validator-targeted cuts undermine trust in the long-term commitments made during the transition period and weaken confidence in governance continuity.
- Governance process concerns: We also note concerns raised by other delegates regarding potential governance rule flouting, which further reduces confidence in the legitimacy and readiness of these proposals.
The Right Way Forward
We support responsible cost review and long-term sustainability. However, we cannot support changes that alienate an entire technical constituency while simultaneously compromising real-world impact.
A more constructive and credible path forward would be:
- Establish clear and shared visibility into the state of the Celo treasury, and apply cost-reduction efforts universally rather than isolating validators.
- Conduct a genuinely data-driven assessment of validator economics and impact, and only then determine what a fair and sustainable adjustment to rewards might be.
For these reasons, Grassroots Economics cannot support any of the three options as currently proposed.