Thanks @rene_celo and @marek for kicking this off. A few thoughts from my time as a Celo Scout and now as director of Funding the Commons.
Ground the tokenomics in the actual use case.
In my mind, Celo’s key differentiation is p2p payments in high-density adoption regions - Kenya, Nigeria, etc. MiniPay’s 11M wallets aren’t an abstraction, they’re real people using Celo for real transactions. A tokenomics redesign should ask: does this make Celo more attractive for the next Opera MiniPay, or the next Grassroots Economics to migrate here? Does it help the founders already building in Lagos and Nairobi?
I helped bring Grassroots Economics into the Celo ecosystem as a Scout, in addition to 10+ other founders building on Celo. What made that possible wasn’t token incentives - it was Celo being the most practical, mission-aligned home for what they were already doing, or aspired to do. The tokenomics question for me isn’t just an answer to how we create deflationary pressure, it’s how can we make Celo the obvious choice for projects serving the communities, the builders, the founders that will drive Celo adoption.
Transparency before routing.
I just posted in the validator thread about concerns that we’re reallocating from transparent mechanisms (validators) to opaque ones (CCF/CICLOPS). Before we design sophisticated Burn-to-Route or PCARE-style mechanisms for directing protocol surplus, we should collectively seek clarity on how current surplus is spent. It’s difficult for the community to evaluate routing proposals without a baseline understanding of current flows.
Any new mechanism should have public dashboards and accountability built in from day one, rather than retrofitted after community pressure.
On the mechanism design direction, I’m encouraged to see @ddd reference Puja Ohlhaver’s PCARE paper. This is exactly the kind of rigorous thinking I believe that will make this initiative a success. At Funding the Commons, we’ve spent years studying how public goods funding allocation mechanisms perform in practice: what works, what gets gamed, what creates real ecosystem value.
If it’s useful for this process, I’m more than happy to facilitate a connection to Puja. I believe folks like her coming from an outside perspective could bring additional insight.
Sustained builder support > hackathons.
I agree with @kalatsong’s skepticism about hackathons. After years of watching prize money evaporate into abandoned repos, I’m convinced the real leverage is sustained support for founders who already have traction.
Projects like Relay Funder (building on Kickstarter’s Oak crowdfunding protocol, with MiniPay integration planned) are shipping because they were supported beyond a weekend sprint. The tokenomics question connects here too: how do we structure incentives so that builders in Lagos and Nairobi can sustain their work, not just win a bounty and disappear?
The technical proposals in this thread are sophisticated. But the real question is simpler: who benefits from Celo’s success? If we route surplus to buybacks, token holders win (in the short term). If we route to ecosystem builders in the regions where Celo actually matters, users win (and ultimately, I believe token holders win more in the long-term). That’s the decision embedded in every tokenomics choice we make.
One more thought: Celo differentiates from other L2s through its user base, moreso than its’ fee structure. With 700K+ daily active users - more than Base, Arbitrum, or most competitors - there’s likely room to modestly increase transaction fees without users noticing. Current fees range from ~$0.005 - $0.01. Even a 2x increase keeps Celo an order of magnitude cheaper than M-Pesa or traditional remittance rails.
If some portion of that increased revenue were reinvested locally - ie transaction fees generated in Nigeria funding Nigerian builders, for example - we’d create a feedback loop where ecosystems that drive adoption benefit directly from it. Tokenomics that align with prosperity for all, while programmatically reinvesting in traction and growth.
Worth exploring as this initiative develops. Looking forward to following and contributing as this moves forward.
David Casey, Celo Scout, CEO @ Funding the Commons