I am a genesis validator. I’ve followed Celo since early 2019 when it joined WFP’s for their Programme Innovation Accelerator. When I heard about the Baklava Stake Off, I immediately decided to participate in Q4 2019. Since then, I’ve been with Celo and I do enjoy a bit of bragging rights for having proposed the first mainnet block back in April 2020.
Celo set out to serve the first billion, that ambition still matters. We should absolutely debate tokenomics, but cutting validators is the wrong first move. Let’s keep the set intact (and be ready to expand as sequencing decentralizes) and fix the real issue: rebuild sustainable demand for CELO without taxing users with high fees.
Celo tokenomic is an important conversation to have but going directly on cutting validators is quite a poor choice as a starting point. Most of the raised points are difficult to comprehend and I wish to thank @yomfana for voicing this. There was recently a Governance proposal from Mento that showed that since the transition to L2 in March 2025, only 565k Celo were transferred to Mento instead of 4.71m Celo. Do you honestly think that price went down since March because Mento may have sold 565k Celo? Where are you seeing this structural selling?
There is another important concern with the Celo Community Fund. Have you checked its runway? The way things are going, it looks way less sustainable then the validators rewards.
I’ve been thinking about Celo tokenomics for a while. It’s a complex topic with many stakeholders and moving parts, and it sits right on top of valuation frameworks. How do people value a chain: fixed supply, active users, TVL, popular apps, narrative, and more? Celo already checks many of these boxes, yet that hasn’t translated into price. The fundamental question remains: why should people buy and hold CELO? For me, the answer is a mix of yield and compelling narratives. Historically, CELO has had one of the lowest staking yields and lowest inflation, an implicit ceiling created by the choice of a fixed supply.
Back in 2022, when “paying the bills” came up, you noted that “transaction fees are not meant to be the primary/only lever for value accrual. This is by design because the Celo protocol is intended to be cheap for end users; other mechanisms matter, in particular stablecoin demand. In the short term, demand for Celo stablecoins increases demand for the CELO asset as 50% of the reserve is in CELO.” If the Mento link is now severed, what’s left as the other value accrual mechanism?
I don’t think playing marketing games with tokenomics is the answer. Burning more tokens, clinging to fixed supply optics, or mimicking “halvenings” hasn’t worked. I’m a strong proponent of Buybacks-and-Make over pure burns: “Stop Burning Tokens—Buyback and Make Instead.”
@Wade captured the crux perfectly: how to rebuild sustainable token demand in this new, post-Mento model. One that fits the L2 era but still honors what made Celo’s system so elegant in the first place?
If the core value-accrual system is gone and we don’t want to rely on higher fees, what else can we do?
Answer: grow durable revenues so Celo can fund the things that build real demand:
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Raise staking yield for CELO holders.
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Create sustainable yield for cUSD.
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Keep financing ecosystem activity via the Celo Community Fund.
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Expand and decentralize the sequencer set. Mobilizing highly technical contributors who’ve been with Celo for half a decade surely must have some form of value. Let’s harness it.
So how does Celo actually increase revenues?
Here are some ideas. I believe this deserves deeper reflection and the creation of focused study groups before implementation. Let’s give ourselves three months for research and design, and six to twelve months to go live with a first wave of initiatives.
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Decentralize the Mento Reserve.
Allow people to contribute assets to the Mento Reserve and earn yield in return.
This would immediately create yield for CELO holders while strengthening the Mento reserve itself. Currently, there’s only about $22M in stablecoins, far from what’s needed if we truly aim to serve a billion users.
We could add a locking mechanism (e.g. funds locked for a set number of days) and link yield levels to lock durations. This transforms the reserve into a living, yield-bearing structure that scales with participation. -
Allocate ~⅓ of the reserve to basis trades.
Celo could mirror the model pioneered by Ethena, which launched after Celo yet now boasts $11.4bn USDe (that’s x518 Celo’s stablecoins) and a $6.8B FDV (x28 Celo’s).
Programmatic hedging + transparent risk limits + public reporting can turn a portion of idle assets into steady protocol income at scale.
This creates sustainable on-chain yield; diversifying beyond pure staking or fee revenue. -
Stand up a Celo ETH Validator Collective.
Lido has become one of the largest fee-generating systems in crypto. As we enter the ETF and DATs era, staking ETH remains a key opportunity but it’s also centralizing around Lido.
Why can’t Celo create its own set of Ethereum validators? Celo validators could run ETH validators too, giving us a triple advantage:- Strengthen Celo’s voice within the Ethereum community
- Generate ETH staking yield for bridged ETH on Celo
- Create a new recurring revenue stream for the ecosystem
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Build a decentralized RWA & commodity exchange
We’re entering the RWA + stablecoin era. Hyperliquid has shown the appetite for decentralized perpetuals.
Celo could go one step further with a decentralized exchange for stocks, commodities and key global assets, powered by stablecoins.
This would open new revenue channels, drive financial inclusion through market inclusion, and expand Celo’s reach to new categories of users and entrepreneurs.
Celo has already proven world-class engineering (the L2 transition says it all). The vision, community and technical capacity are here. The next step is to channel this capability toward new economic engines inspired by the most successful, fee-generating dApps and chains.
How to finance this?
How can these initiatives be funded, venture capital, ecosystem reinvestment or new mechanisms altogether? A few ideas:
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Public-private reciprocity.
In Q4 2023, Minipay requested $5.6M cUSD (~10M CELO) and received an additional $3M from Mento: $8.6M in total.
Could Opera, in return, contribute to the Mento reserve? Or allocate equity or resources to seed Celo’s next growth phase?
Opera has a $1.47B market cap, $126M in cash and $269M in long-term investments without long-term debt. There’s alignment potential here. -
Leverage Celo’s real-world credibility.
Projects like Sarafu Wallet embody real-world impact. MiniPay has an active and growing user base in many different parts of the world.
This has drawn recognition from Vitalik, Tether’s founders and majors figures in web3. Could these ecosystem leaders co-fund the next wave of impact-driven tokenomics innovation? -
Create a dedicated Celo DAO for growth and mix it with external grants
Rather than relying solely on external funding, Celo could establish a purpose-built DAO to incubate new yield-generating mechanisms potentially with matching grants from Ethereum or Optimism.
Call to action
As a former CFO of the Celo Foundation, I fully understand where this proposal comes from, the instinct to focus on cost efficiency makes sense.
But I think the framing here oversimplifies the problem and risks undermining the network’s long-term credibility. Reducing the validator set might bring short-term relief, but it sacrifices one of Celo’s few remaining differentiators: being a L2 with a genuinely decentralized sequencer set and a group of long-standing, mission-aligned validators who have been part of Celo since the beginning.
Celo has always been more than just a blockchain, it’s a mission to bring prosperity to all. Now is the moment to reimagine value creation, not by cutting or shrinking but by building and rewarding participation through new sources of protocol revenue.
@alex_Verda, as you’ve started this important conversation around tokenomics, can you help create a Celo Tokenomics Working Group to study, prototype and refine these ideas?
Together, let’s publish a “Celo Revenue 2.0” blueprint within three months, outlining clear paths for sustainability and long-term alignment.
If we do this right, we can prove that Celo can pair inclusive finance with sustainable protocol income and ship a token model worthy of a billion users.