# Strengthen Tokenomics: Cut Validators from 110 to 55

**URL:** <https://forum.celo.org/t/strengthen-tokenomics-cut-validators-from-110-to-55/12435>\
**Category:** Protocol\
**Tags:** governance, funding, technical\
**Created:** [October 3, 2025, 6:52pm UTC](https://forum.celo.org/t/strengthen-tokenomics-cut-validators-from-110-to-55/12435 "2025-10-03T18:52:55Z")\
**Posts on this page:** 1\
**Showing post:** 10

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**Author:** ![Patrick](https://sea2.discourse-cdn.com/flex020/user_avatar/forum.celo.org/patrick/32/6634_2.png) [@Patrick](https://forum.celo.org/u/Patrick)\
**Post date:** [October 6, 2025, 8:06pm UTC](https://forum.celo.org/t/strengthen-tokenomics-cut-validators-from-110-to-55/12435/10 "2025-10-06T20:06:04Z")

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Appreciate the thoughtful discussion here @alex_Verda . I’ll add a few points:

* * *

### 1. Our validator group never sells CELO to exit rewards

We only ever swap **cUSD directly for USDC**. It’s worth clarifying that there are multiple liquidity routes available, and the assumption that validator rewards always convert into CELO and then hit CEX order books simply doesn’t hold in practice.

* * *

### 2. The real issue is circulating supply management, not validator pay

Cutting validator count might marginally slow emissions, but it doesn’t structurally solve the token-supply problem.

If the concern is about long-term inflation and supply overhang, then we should address that directly — not through proxy cuts to active infrastructure contributors.

* * *

### 3. “Unsustainable inflation” is a narrative choice, not an inevitability

The claim that emissions could “run out in under ten years” assumes perpetual inflation is required for network health.

Bitcoin is a clear counter-example: its emission schedule _ends_ and becomes deflationary — and that’s part of what gives BTC long-term credibility.

Celo no longer depends on CELO for base-layer security as it did pre-L2. So why keep inflating it indefinitely?

If we’re serious about hardening tokenomics, one radical but principled option would be to front-load issuance — even 10x it temporarily — to finish emissions within a year and then transition to a deflationary phase. That creates a predictable, scarce supply curve.

* * *

### 4. Mento and the L2 fee structure broke the original feedback loop

@Wade nailed this point. Celo’s original cGLD design tied stablecoin demand directly to CELO demand.

Once CELO was no longer the primary asset in the Mento reserve and the [transaction-fee burn was replaced with redistribution](https://forum.celo.org/t/the-great-celo-halvening-proposed-tokenomics-in-the-era-of-celo-l2/9701), that feedback loop disappeared. Today, most fee flows actually **increase** circulating CELO instead of reducing it.

If the goal is to strengthen CELO’s economics then:

- **Divert** the current 10% carbon offset allocation to CELO burns.

- **Require** all gas tokens to be settled in CELO, and burn a fixed portion automatically.

- **Require** CELO burns or deposits for governance participation (e.g. proposal submissions or voting).

Those mechanisms would restore meaningful sink behavior in CELO’s supply dynamics — the opposite of what’s happening now.

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