Having reviewed the discussions from the governance call, the trajectory of this proposal has become increasingly clear, and it is a concerning one.
At its core, this proposal now exhibits a classic principal-agent problem. The agents (the proposers and their allies) are advocating for a policy under the banner of “strengthening tokenomics”. However their solution does not serve the best long-term interests of their principals (the Celo network and its broad stakeholder base). Instead, it serves a narrower interest at the expense of a foundational ecosystem cohort: the validators.
Let’s me correct a critical and repeated misconception: The proposed “savings” i.e. reducing validator payouts does NOT magically free up CELO for the Community Fund or other grants. The mechanics are clear: validator rewards are collateralized by CELO sent to the Mento reserve from the UnreleasedProxy. These are not liquid community treasury assets. To reallocate these funds would require a separate, likely contentious, governance proposal to drain collateral from the system. The whole argument reeks of extraction disguised as fiscal responsibility.
Therefore, we must treat this move for what it is: one operational group’s funding (validators) is being targeted, which implicitly improves the relative standing and potential claim to future resources of other groups. In the interest of transparency and accountability, we must ask:
- Who benefits directly if validator payouts shrink?
- Does this proposal consolidate influence or control? Remember that dismantled groups equate to some propotion of lost active governance votes.
If the answers suggest concentrated beneficiaries, this proposal must be held to a far higher standard of justification, with clear transparency on the ultimate economic winners and losers.
Furthermore, the time and time again framing of validators as a simple “cost center” to be optimized is not just short-sighted; it is a fundamental mischaracterization of their role. Validators are providers of critical public goods: decentralized high-quality RPC infrastructure, deep technical expertise, and the operational readiness required for future network transitions (like decentralized sequencing). To dismantle this cohort is to invite a “Tragedy of the Commons” where we systematically defund a shared resource until the entire ecosystem is degraded.
I find it deeply ironic that the entity ostensibly dedicated to public goods (“CeloPG”) are allying with a proposal that would gut one of the ecosystem’s most tangible public good providers. This forces a necessary question: What is the definition of a “Public Good” in the Celo ecosystem if not the entities that previously and potentially would secure, maintain, and scale its core infrastructure?
To the community, I urge you to consider the alignment of interests. Validators have for years locked capital, invested in infrastructure, and operated the network through its evolution. Their skin in the game is direct and substantial; their prosperity is inextricably linked to Celo’s long-term health. The proposers, by contrast, advocate for a change that reduces their own operational exposure, advances a weak and misleading (speculative, unproven and without a quantitative model) tokenomics argument, and potentially redirects the ecosystem’s focus (and future resources) toward their preferred domains.