Season 2: Focused Execution & Collective Stewardship of Tokenomics

[CeloFoundation]

Dear Celo Community,

After a year of major technical delivery and tremendous real-world growth, Celo is entering a defining new phase. As highlighted in Rene and Marek’s respective end-of-year recaps, the community delivered a seamless transition to an Ethereum Layer-2, implemented multiple protocol upgrades, and scaled real-world usage to millions of people around the world. These outcomes were made possible by our builders, engineers, operators, researchers, and contributors across the ecosystem, who brought energy, conviction, and a deep sense of ownership to shaping what Celo is becoming.

This level of adoption matters. It signals that Celo is no longer just proving what is possible. It is operating at real scale, with real users, and real responsibility. Each of us across the ecosystem has played a central role in making that possible, and the community’s continued engagement reflects a deep sense of ownership and care.

As we enter Season 2, we recognize the diversity of perspectives across the community. While approaches may differ, we are aligned on the long-term stewardship of the protocol and on our shared responsibility for the network we are building together.

The depth and continuity of this community are remarkable. Many contributors across the ecosystem, including team members at Celo Foundation and cLabs, have been building together for years. We are a one big globally distributed network of builders, operators, and advocates with different backgrounds, experiences, and viewpoints, aligned by a common purpose: creating the conditions of prosperity—for everyone.

For many in this community, this work is deeply personal. Celo was built by people who understand firsthand why accessible financial tools matter, and who recognize the transformative potential of an onchain economy in the real world. That perspective continues to shape how we build, govern, and support one another.

Today, Celo is experiencing rapid growth, increased visibility, and rising expectations from millions of new users worldwide. Our achievements this year alone are vast and a true inflection point. Moments like this demand focus, discipline, and care. What we decide now sets the course for Celo’s future.

Season 2: Focused Execution, Clear Direction

On January 8, 2026, the community will kick off the Celo Tokenomics Initiative, a community-driven effort to evaluate and evolve CELO’s long-term economic design.

With that work beginning soon, Season 2 takes a clear and intentional approach. During this period, we will pause initiating new, non-essential Community Fund spending and focus resources on programs that most directly support Celo’s core growth objectives, while we optimize value accrual to the CELO token.

Broader funding and economic design questions will be addressed through the Tokenomics Initiative, where they belong, within a structured, data-driven, and community-led process that considers long-term sustainability, real usage, and alignment across the ecosystem.

This sequencing allows us to:

• Maintain momentum on what matters most today, and drives material value to the ecosystem (onchain transactions and TVL)
• Avoid fragmented or premature funding decisions
• Ground future resource allocation in a shared economic framework
• Ensure long-term decisions are made deliberately and transparently

Season 2 focuses on disciplined execution, paired with thoughtful economic design.

What Defines Season 2

Season 2 is guided by a simple principle: focus where it matters most.

To move forward responsibly, this season prioritizes:

• Clear and aligned funding decisions
• Sustainable program structures
• Reduced operational complexity
• Initiatives that deliver measurable impact

As a result, Season 2 will operate with a lean, essentials-only scope, centered on the two intents that remain foundational to Celo’s long-term health:

1. Growing Transactions
2. Growing TVL

This ensures continued progress without outpacing governance processes or introducing unnecessary strain during a period of focused execution.

Season 2 is about responding to growth with intention. It is a moment to refocus our resource allocation, sharpen priorities, and ensure that how we fund and coordinate work aligns with the scale and impact Celo has reached.

Season 2 is not a pause in progress. It is a deliberate step forward that reflects where Celo is today and sets the direction for the next phase of the network’s evolution, with improved tokenomics.

The following programs are considered essential to ecosystem stability and continued growth during this focused period:

Prezenti Grants

Maintains strong builder momentum with clear, measurable outcomes, particularly for applications that can scale within MiniPay and drive transaction growth.

Community Guild

Ensures contributors remain engaged, coordinated, and informed during this period of focused execution.

Governance Guild

An independent, community-led group composed of contributors such as @0xj4an-work, @0xGoldo, and @Wade, providing important checks and balances within Celo governance processes.

Core Ecosystem Teams & Programs

cLabs
Celo Foundation
CICLOPS
Stabila

These efforts are critical to protocol development, infrastructure operations, ecosystem growth, stablecoin adoption, and industry engagement, each directly supporting Season 2’s core intents. We also recognize the meaningful contributions of other ecosystem teams and community members to these same objectives, and it is our explicit intention to broaden future funding cycles to include them

Regional Ecosystem Leads (Streamlined Structure)

To maintain global presence while reducing administrative overhead, key ambassadors will be onboarded as extensions of the Celo Foundation Growth team. This reflects a simplified version of the Foundation’s previous Eco Leads structure and enables closer coordination around a single strategy.

Builder Programs

To maintain a strong builder funnel, rewards will be routed directly through the DevRel team for the duration of Season 2.

Why This Matters Now

Celo is entering a new era of global usage. Flagship products like MiniPay are scaling to millions of users, and the ecosystem is preparing for meaningful economic evolution through the Tokenomics Initiative.

Season 2 creates the space to consolidate what is working, reinforce core systems, and ensure that funding and coordination reflect the scale and responsibility of the network Celo has become.

By narrowing focus now, the community positions itself to make stronger and better-informed decisions about Celo’s long-term economic future.

Next Steps

Proposals for the essential Season 2 programs will be shared on the forum in early January and brought forward for ratification through the Celo governance process.

In parallel, the Tokenomics Initiative will begin in January 2026, with open participation, transparent research, and community-led discussion shaping Celo’s long-term economic design.

We encourage everyone to take time over the holiday period to read, reflect, and recharge. We will begin responding to feedback and questions after January 5.

Season 2 is intentionally focused. This work positions Celo for its next era of growth.

We are excited to build what comes next together in 2026.

[papa_raw]

… we will pause initiating new, non-essential Community Fund spending and focus resources on programs that most directly support Celo’s core growth objectives, while we optimize value accrual to the CELO token.

It is good to see this be prioritized. The best and most straightforward way to make the ecosystem sustainable in the long-term and to support the community is for the CELO token’s value to increase.

One thing that I think would be useful would be to understand the different valuation approaches as there are a few more variables than TVL and TX count that are generally considered important. I’ve included a screenshot from https://ethval.com/ on what they count as scenario variables for ETH valuation, which are all relevant to CELO as well:

[mbarbosa]

I think this post captures something essential: that focus creates the conditions for meaningful change. The decision to pause fragmented spending while the Tokenomics Initiative takes shape feels like wise stewardship.

I’m particularly excited by the timing. In the earlier tokenomics thread, I proposed what I called the “Prosperity Engine”, a model where gas paid/burns mint decaying, non-transferable “Gas Credits” that give users routing power over protocol yield, rather than just claiming passive rewards. The idea was to turn network usage into protocol “ownership”, creating what I even called a kind of “Universal Basic Equity”. Since then, I’ve been building a working prototype: ProsperON

ProsperON implements a core loop:

• Burn: All historical gas usage and voluntary CELO burns are indexed

• Mint: Burned CELO converts to Prosper Credits (with 2% weekly decay)

• Pool: An endowment generates yield (stablecoins via Aave or any yield solution in other chains for net positive liquidity flow)

• Allocate: Users steer yield, through their credit-weighted share, across ecosystem priorities (as them seem fit), for example: Users (40% default): Rebates, perks, community distribution; Builders (40% default): Gas sponsorship, growth incentives; Public Goods (20% default): Infrastructure, tooling, audits, etc.

The decay mechanism is crucial and often misunderstood. It’s not punishment, but what makes the system regenerative. Influence must be continuously earned through network participation (and/or CELO recurring voluntary burns), not captured once and held forever. This prevents early dominance and creates natural counter-cyclicality: when CELO price (or network activity) drops, the same USD gas spend burns more tokens and each transaction drives higher influence, making routing power “cheaper” to acquire (and usage incentives become more significant), precisely when the network needs the most. More details on this How it Works page.

What excites me about Season 2’s direction is that it creates space for proposals like this to be evaluated properly, grounded in data, not hype. ProsperON Season 0 is intentionally centralized as a validation sandbox. All inputs are on-chain verifiable (Celo transactions), and all calculations are auditable. The goal is to generate real data on:

• How users respond to decay mechanics;

• Whether steering (routing power) motivates continued participation vs. passive extraction;

• How a “mid-level” credit-weighted governance affects further proposals and decision-making quality;

• Whether “allocator competition” can replace grant committees with skin-in-the-game conviction;

If the Tokenomics Initiative is interested in exploring PCARE-inspired models (as @ddd suggested, citing Puja Ohlhaver), ProsperON can serve as a live testing ground. Not as the answer, but as one experiment that the community can observe, critique, and build upon.

The shift from “grant-dependent” to “proof-of-conviction” economics won’t happen through theory alone. It needs prototypes that fail fast and learn faster.

Happy to share the codebase, open-source the mechanics and calculation logic, and collaborate with whoever is stewarding the tokenomics research in Phase 2. The goal isn’t to push a particular solution, but to contribute with additional data points towards the economic foundation that will power Celo’s next decade.

Building together.

[mbarbosa]

Follow-up: The Retention Layer

Since my earlier proposal, I’ve been prototyping at ProsperON and realized there’s a dimension I underemphasized: builder integration for retention.

The core insight:

Users already burn CELO on gas, that’s unavoidable. ProsperON converts this “sunk cost” into weekly claimable yield. No principal lost. Just upside from activity they’re already doing.

For builders, the integration is simple:

• Register your users’ wallets

• Display their earned credits

• Let them claim yield through your app

But here’s the extra layer: Builders and smart contract operators also earn credits from their own gas usage, deploying contracts, running keeper bots, facilitating transactions. They can allocate these credits back to their users as bonus incentives, amplifying the reward without spending a dollar.

The result? Users return weekly to claim real stablecoins, with buying power to spend in your app. And builders have a free retention tool funded by their own network participation.

This creates a flywheel no individual app could build alone:

Use App → Burn Gas → Earn Credits (+ Builder Bonus) → Claim Weekly → Spend in App → Repeat

For Season 2’s focus on transactions and TVL: weekly claims create transaction floors, endowment deposits grow TVL, and retention compounds usage.

One more thing… this is also a powerful competitive differentiator. On other chains, gas is pure cost. On Celo with ProsperON, gas becomes an investment that pays users back weekly.

For builders evaluating where to deploy:

• Other chains: Gas = expense, retention = your problem to solve

• Celo + ProsperON: Gas = user income, retention = built into the network

It’s essentially free retention infrastructure that only exists on Celo. Builders get a loyalty program without building one, and users get paid to use the apps they already want to use.

[barton]

1. Halt the issuance of additional CELO tokens; it serves no purpose other than diluting value and acting as an ATM for others. Any new token supply must be tied to a financing round.

2. Organize a proper fundraising effort—e.g., run a pre-ICO round at a 1 billion valuation led by a16z and Polychain, just as before.

3. Acquire MiniPay or build an in-house equivalent.

4. Every project in the Celo ecosystem—including MiniPay and Celo itself—must allocate 50 % of its revenue to buy back and burn CELO.

[CeloFoundation]

As a reminder, today, January 8, 2026, the community will kick off the Celo Tokenomics Initiative, a community-driven effort to evaluate and evolve CELO’s long-term economic design.

Join the call here:
Meeting ID meet.google.com/bwm-zxdr-uew

4pm UTC / 11am ET / 8am PT

[Makx164]

Short but clear position:

-Let’s call the next phase Act 2, not Season 2 (has more impact)
-lower inflation
-(staking) rewards come from transaction fees
-rebranding, new token, new chart history