In the current state, the emissions can fall anywhere between 1.9% (best case, average price of $0.3) and 2.7% (linear worst case, Celo price falls to $0.09) by April 2026 (exactly 1 year of Community RPC nodes). In reality we expect it to fall somewhere in between but generally closer to 1.9% because I don’t expect Celo price to tank that much by April and we are already roughly 67% through the first year of the Great Halvening Tokenomics change.
There needs to be some solid modelling and forecasting around all this before we pull this lever and I hope this discussion is factored in the next tokenomics design. Emissions are an integral part of any ecosystem and we just can’t ignore it. There are also a lot of other technical decisions to factor in e.g. The existing staking model is coupled strongly with validators/validator groups. This decision also affects every voter since they vote for a group and it also affects their yields if the group decided to wound down because they are no longer part of the elected set. In short…there are too many risks and factors that this proposal doesn’t take into account but they do exist.
Personally I hope the tokenomics design review results in some sort of high quality modelling or forecasting like this cLabs paper.
I respect the time that validators and delegators put in. Posting this has obviously taken my time too and, like DOGE, I feel like there’s not a lot of upside personally relative to downside at this point.
However, we have to be real, the price of $CELO is ~$0.16 as of today 12/11 and we’re spending $8,700+ per day on validators*, which looks increasingly expensive when measured in units of CELO. Frankly, post L2, validators simply don’t provide the same critical security infrastructure as before, so we should be cutting unnecessary expenses.
Honestly, I simply (incorrectly) thought it would be easier for a gradual approach going from 110 to 55 vs 0.
That said, I did also confirm with cLabs/Marek that going to 0 would entail a lot more work and audits vs going from 110 to 55. Thus, logistically, it would be much easier to go to 55. However, I recognize and agree with your points, and purely logically speaking the long-term number of validators should probably go to 0 (e.g. if validators are needed in the future for decentralized sequencing, they can be re-initiated then).
This is a good point, perhaps a part of the money saved on validators could go to specific named public goods rather than giving it to validators and (hope indirectly) they do good things.
Why is the motivation unclear? We’re spending ~$8,700 on validators each day/epoch* that is not necessary post L2 transition. Especially with current $CELO prices, the motivation is quite simply cutting unnecessary expenses.
If we lower the validator set to zero, we would need to do a number of things:
Modify the staking smart contracts to permit voting for zero validators, while still keeping staking rewards for people that lock CELO and still letting such people participate in governance
Potentially ripping out all the election smart contract logic to lower our smart contract surface area
Auditing these changes
Re-do the staking web page on Mondo so people can stake and earn rewards without having to pick a validator to vote for
These are all things that can be done fairly easily of course, but would take around one to two months, primarily because audits add a lot of latency to any smart contract changes.
So given that we probably shouldn’t dump a bunch of unplanned work on cLabs via governance, reducing the number of validators and/or the payment structure makes the most sense.
What if this proposal becomes a two-part process from 110→55→0 validators?
Start with reduction to 55 for expediency— my understanding from cLabs is this would be very easy to implement.
In 3 months (after holidays) assuming no significant unforeseen security vulnerabilities or issues resulting from reducing to 55, we go to 0 validators. This way we don’t drop a bomb on cLabs right around the holidays and cLabs has clear line of sight on what is approved for the future without the needing to negotiate in 2 months or submit a new governance proposal.
My takeaway from the forum posts above and conversations with Luuk is that there is much more consensus around going to 0 than going to 55, which I’m onboard with if it’s done in this staged approach.
It’s clear the approach here looks like throwing ideas at the wall until one sticks; a kind of trial-and-error governance.
That claim reads as speculative (even gaslighty) and, in places, misleading. The posts cited are questioning the logic of the extreme (often because the proposers offer arbitrary numbers). Real consensus would be demonstrated by a clear, reproducible signal (for example, a survey or written statements from a majority of validator operators) and not an interpretation of scattered comments.
There is also this gem from the other post that I cannot resist posting:
At the same time the proposers are:
Proposing to cut funding to many competing providers
Suggesting subjective scoring to decide who remains
Ignoring on-chain analyses and community data that dismantle their narrative
Pushing forward despite substantial community concerns about methodology and fairness
To reiterate, In its current form the proposal is not a serious, defensible reform:
Technically flawed: several core numerical assumptions are inflated or incorrect, and community on-chain analyses have corrected those claims.
Strategically incoherent: the rationale shifts across posts without a single, coherent evidence-backed plan.
Potentially self-serving: the proposers and their projects have been among the largest material recipients of ecosystem funding this year, yet the proposal contains no safeguards against redirection of savings to affiliated parties.
Dismissive of opposition: parts of the thread treat contested claims as settled and downplay rigorous critique.
Put bluntly: without binding, on-chain guardrails this proposal functions like a blank cheque. If the proposers genuinely care about CELO price stability and long-term inflation, they should accompany any vote with concrete safeguards:
Publish full proposer disclosures: past and present community grants, validator ownership or operational roles.
Lock governance controls that could be used to divert resources: transfer UnreleasedProxy ownership into a verifiable governance timelock in a way that prevents discretionary collateral transfers for at least five years (except for pre-defined base CELO yields to lockers). Ideally transferring timelock ownership to the zero address to prevent CGP override.
Publish a thorough impact analysis: how the change affects governance participation, network resilience, RPC availability, and the flow of funding to public goods (validators who reinvest rewards into public goods, opensource tooling and community initatives).
These are standard governance-hygiene measures to prevent capture and to protect the network’s legitimacy. If the proposers are serious about improving tokenomics, they should be the first to endorse similar or better safeguards.
Yeah, I don’t get that fixation on reducing the validator count either. If the whole premise is to save some money and don’t break things, then @Thylacine suggested two options that are the easiest to implement.
Meanwhile, someone removed 10m CELO in delegations from a bunch of smaller validators so most of them won’t make the cut if the vote passes: Celo Mainnet Transactions Information | CeloScan . Could be just wallet hygiene related but the timing couldn’t be better
In terms of reducing budget cost - I would really want to know where all the CICLOPS funding goes. as @Thylacine points out here - we are simply in the dark.
I would also like a simulation on what happens if / when all the stakers on the Validators try to unstake and start selling. ?
Are the proposers here really saying we MUST stop paying validators or Celo is over?
Let’s talk about that budget with clear numbers then.
If instead the idea is that the funding for validators should be spent elsewhere - like a failing CCF budget … ? Let’s be clear on that.
And please note the promise to validators that the move to a L2 would leave validators in a position to be part of decentralized sequencing. (please correct me if I am wrong here - but that is what I understood and why I supported the L2 transition).
Is breaking that promise really on the table here?
What do people think the consequences will be here of breaking that promise?
Imo, it is better to have smaller amount of well paid entities as validators/operators, vs larger amount that are all getting paid way less.
There is definitely a payment threshold after which you are going to lose majority of the qualified operators because it is no longer going to be worth it to stay involved and keep up with the changes, updates and so on.
As for reducing the validator set, I think it all depends on what the medium/long term plan is. If the goal is to reduce to 55 now, and in 6 months try to reduce it to 0, it is probably going to be better to just reduce it to 0 right away. Dragging this over a long time period definitely seems worse vs just doing it one go.
If the goal is to just reduce cost, but still keep operators on board, then it would probably be better to approach this similar to how original validator payouts were planned.
First, lets establish what is a reasonable yearly budget for this cost, for next 2-3 years.
Second, lets establish what we think is a minimum yearly payout threshold for quality operators. (currently it is set at ~30K USD, I personally think that going lower than that isn’t going to be great for quality)
Third, set total number of validators to be “total budget” / “minimum payout threshold”.
These are great suggestions @Thylacine! Here are my thoughts:
This introduces no extra work, and we’ve changed the count via governance in the past so it seems low risk and thus low effort.
This seems even less risky, as we’ve also made this change via governance. If we were to do this, I would suggest increasing the validator group size to 7 or 10 so the folks that want to stick around, have the option to try to earn more revenue.
I don’t think this would work unless we also want to lower the staking rewards for people who have locked and staked CELO. These rewards are proportional to the validator scores.
I don’t understand what’s meant be “technically flawed.” All I’m saying is Celo is now an L2 and validators no longer provide critical security infrastructure as they did when Celo was an L1, thus we shouldn’t go on spending $8,700 per day/epoch. The $8,700+ referenced is directly from the block explorer, is $8,700 the figure you’re referring to with “numerical assumptions”? Celo Mainnet epoch 1980 details | Blockscout
The rationale is to save money and cut unnecessary costs. How do you think the proposal should be re-written to make this more clear?
Verda Ventures’ primary LPs/investors are Tether, Opera, and JUMP. What “ecosystem funding” are you referring to? I’m not sure how I would “redirect” any savings from this effort?? The “selfish interest” I can think of is as a $CELO token holder, I believe we can increase value for $CELO token holders by cutting unnecessary costs.
I’m not trying to be dismissive and maybe I’m just not understanding something, but I simply don’t think we should spend $8,700 per day on a service that isn’t strictly needed, especially when $CELO prices are so low.
Per Marek’s comment above ( Reduce Elected Validator set from 110 to 55 - #27 by marek ), going to 55 is easy (limited cLabs work), but going to 0 would require significant work, so going to 0 in 3 to 6 months would give cLabs clear line of sight to do the preparatory work. By going to 55 first, we’d also get to assess any unforseen risks from reducing the validator count. Assuming no issues arose with a change in the validator set to 55, this would give us increased confidence to go to 0 (in 3 to 6 months).
I’m not trying to say “Celo is over” without cutting validator expenses. I just think we should reduce unnecessary expenses just like you would reduce unnecessary spending in your personal life.
It’s really hard to simulate the exact price impact as we’d need to know how many of those unstakers would sell. At current prices, basically everyone is underwater who has bought in the past, so human psychology is you generally don’t want to sell at a loss. Do you have any suggestions on how to best model this?
As a general comment, if this is the standard for posting a proposal, I think you really have to just be a full-time community member. I think normal non-technical community members should be able to post a proposal without this level of depth, otherwise it’s really discouraging for normal $CELO token holders to just post on something they think can be improved (in this case, cutting unnecessary spending). Running Verda Ventures as my primary job, I don’t see how I would reasonably have time for researching “affects governance participation, network resilience, RPC availability, and the flow of funding to public goods”, etc.
For example, for me, I’m spending time responding to all these comments, but I don’t have any direct payout or return if this passes or not, other than indirectly if CELO (hopefully) goes up due to decreased spending.
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