Celo

Time factors

Protocol timeHuman readable time

Protocol time 1

Block

5 seconds

Protocol time 2

Epoch (= 17,280 blocks)

24 hours

First reward delay

1 epoch

24 hours

Reward frequency

Last block of every epoch

24 hours

Unbonding period

3 days

3 days

Lifecycle

Must know before staking

Minimum stake amount

❌

Partial stake changes

✅

Partial reward withdrawal

✅

Compounding

✅

Penalty

✅

Offline - 100 CELO

Slashing

✅

Conflicting block proposal - 9,000 CELO

  • Validator groups. The protocol introduces a unique stakeholder called validator groups. Validators are expected to join validator groups as members.

    • Each validator group can have up to 5 validator members.

    • When delegators stake, they select validator groups, and not the validators directly.

    • Validator groups collect a commission from the validators. Delegators are not subject to paying commissions.

  • Rewards are added directly to the staking balance of stakers.

  • Only validators and validator groups can get penalized or slashed. Delegators’s stake is not at risk of being penalized or slashed.

Advanced topics

General

  • Protocol funds.

    • Community Fund. This on-chain fund is intended to pay for maintenance of the protocol. The fund receives a portion of newly issued tokens every epoch, all slashed tokens, and the base portion of transaction fees. Disbursement can be done through governance proposals.

    • Carbon Offsetting Fund. This on-chain fund is directed towards organizations that contribute to any off-chain carbon offsetting projects. The fund receives a portion of newly issued tokens.

Rewards

  • Rewards come from newly issued tokens and transaction fees.

    • Validator and validator groups rewards.

      • The protocol targets to reward 75,000 in cUSD (the protocol’s native stablecoin) to each validator on an annual basis. This amount is adjusted each epoch by the on-target multiplier.

    • Delegators rewards.

      • The protocol issues new tokens to reward delegators. This issuance rate is adjusted first by whether the staking ratio is below or above the target of 60%. Then, it is further adjusted by the on-target multiplier.

    • Additional issuance.

      • While the majority of new issuance goes to delegators as staking rewards, there are three additional places where newly issued tokens go to. The Community Fund, Carbon Offsetting Fund and stablecoin reserve all receive part of the newly issued tokens. Similar to staking rewards, these are adjusted by the on-target multiplier.

    • On-target multiplier. The protocol adjusts all issuance (rewards, protocol Funds, and reserve) by the on-target multiplier. The protocol targets to linearly issue 200 million tokens over 15 years starting from genesis. Depending on how behind or ahead of schedule the currently total issued tokens are, the protocol sets an on-target multiplier to scale up or scale down the issuance in each epoch.

    • Transaction fees. The protocol implements a gas market similar to Ethereum’s EIP-1559. The base fee goes to the Community Fund while the tip goes to the block proposing validator.

  • Factors that impact realized rewards.

    • Validator performance. Both validators and delegators will have their rewards scaled by the following two factors.

      • A validator must participate in consensus in at least one block every twelve blocks. Validators failing to do so will be considered down and have their uptime scores reduced. Each validator’s uptime score will be used to calculate their own rewards. An average uptime score will be calculated for each validator group and will be used to calculate delegator rewards.

      • Any validator that has been penalized or slashed in the past 30 days will incur an additional penalty score. This penalty score applies to all validators within the same validator group and their delegators.

    • Validator group share. Validators need to pay a commission to their validator group. Delegators are not subject to this commission.

Risks

  • Penalties. A validator that misses submitting consensus votes for 8,640 consecutive blocks will be considered offline. The penalized validator will have 100 CELO deducted from their own stake and ejected from the validator group in the next epoch.

  • Slashing. A validator the proposes two different blocks at the same height will be slashed. The slashed validator will have 9,000 CELO deducted from their own stake and ejected from the validator group in the next epoch.

  • Tokens that are deducted through penalties and slashing are sent to the Community Fund.

  • Both penalties and slashing apply to the stake of validator groups and their validator members. Delegators’ stake is not at risk.

    • Penalties and slashing will have an impact on future rewards. Please see the Rewards section for more details.

Validators

Total validator cap

✅

110

Validator requirements

✅

10,000 CELO

  • The validator group needs to lock in 10,000 CELO when first creating the group. For example, if validator group Alice created her group for her own validator and Bob’s validator, she will need to first lock 10,000 CELO when creating the group. Next, Alice and Bod will need to lock an additional 10,000 CELO each to register as validator members of the group.

  • The validator group will have a 180 day unbonding period. The validator members have a 60 day unbonding period.

  • The validator group takes a share of the rewards earned by their validator members. This group share does not apply to delegators.

Resources

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