Co-founder of the Celo project: Celo is a permissionless fast PoS network with a lightweight identity protocol and stability protocol
On April 30th, the AMA transcript of Rene Reinsberg, the co-founder of the Celo project.
Hi everyone, my name is Rene Reinsberg and I am one of the co-founders of Celo. My co-founders, Marek Olszewski and Sep Kamvar, and I met at MIT for ten years now. I did a startup called Locu with Marek, doing machine learning. The company was later acquired by GoDaddy. I also previously worked in Morgan Stanley's Global Capital Markets group, McKinsey, World Bank and TechnoServe.
Both Marek and Sep have a technical background. For example, Marek's past work includes a deterministic multi-threading and transactional memory, for which he won the 2011 Facebook Fellowship. He has also worked at Microsoft Research, Google, and Sun Labs. Sep Kamvar is the inventor of EigenTrust, one of the best-known protocols for trusted computing in distributed systems. Before joining Celo, Sep was a professor at the MIT Media Lab. His first company, a personalized search engine, was acquired by Google in 2003. He then spent many years at Google leading its Personalized Search team. So I'm very fortunate to be able to work with them.
One of the reasons we decided to do Celo is that we saw the great potential of blockchain and cryptocurrency, but we didn’t see many projects doing mobile applications. Very few projects do well on cheap mobile apps. So we founded Celo and adopted a mobile-first strategy.
We believe this strategy will allow more people to enter Celo's ecosystem. According to forecasts, by 2025, there will be more than 7 billion mobile phone users worldwide. Celo has a technology that is not restricted by models, operators, and countries. We hope that this will enable more people to obtain basic financial products and services.
In short, Celo is a permissionless fast PoS network with a lightweight identity protocol and stability protocol. Specifically, the lightweight identity protocol means that it can match the public key with the hash value of the mobile phone number, allowing cryptocurrency to be sent to any mobile phone number, which removes many barriers to cryptocurrency transactions.
The difference between Celo and other blockchain projects is that a simple smartphone can act as a node in the Celo network, which is achieved through the fast synchronization of the ultra-light client, which allows the block header to be quickly synchronized with the mobile phone Optimized, which makes Celo 17,000 times lighter than other blockchains, and we are still optimizing.
I believe everyone knows the importance of stablecoins, especially since the beginning of this year, stablecoins have achieved huge growth, reaching tens of billions. I think the usage scenarios of stablecoins can go far beyond today's scope. In the field of payment, one of the innovations of the Celo protocol is that it supports direct deduction of stable currency as a service fee when transferring funds, instead of the platform's native tokens.
Next, I would like to introduce the progress of Celo to you.
On April 22, our validator community selected the first candidate mainnet (RC1, that is, if no major loopholes are found, it will officially become Celo’s mainnet). You can follow our official website to learn about More mainnet progress. In addition, in a few weeks, we will provide the full feature set of the protocol through on-chain governance.
It can be said that starting Celo has been a very interesting journey. We officially started this project about 3 years ago, and conducted research on users in Asia, Latin America, the Middle East, Europe and other parts of the world. One of the conclusions is that no matter where it is, the current financial services do not meet the needs of users very well, and there is still room for improvement.
During this time, we have also acquired a large number of excellent partners, supporters and contributors. There are currently about 80 contributors contributing to the Celo network. And fortunately, we have top supporters, including Polychain and some individuals with extensive experience in the payment field, such as Jack Dorsey (co-founder of Twitter), Reed Hoffman (co-founder of LinkedIn), who have been giving We provide various feedback and suggestions.
Next, I will introduce Celo Gold Coin (cGLD) to you.
Just as ETH is the native token of the Ethereum platform, cGLD is the native token of the Celo platform. Although it is called a gold coin, it has nothing to do with gold, but a functional token for participating in the governance of the Celo platform. For example, it can be used to run a verification node to maintain network security, vote for verification nodes, and participate in platform governance. Celo has an on-chain governance mechanism, or supports on-chain applications.
cGLD is also a type of reserve asset in the underlying reserve pool of the Celo platform, which is used as collateral for the stablecoins issued on the Celo platform. The most typical stablecoin is Celo USD (cUSD). This reserve pool can also be used to issue other stable coins, such as Celo RMB, Celo GBP, etc. In the future, it will be up to the community to decide what type of stablecoins to issue.
Use cases for Celo:
Members of the Celo Alliance for Prosperity include some of the leading financial product and service organizations. We are particularly interested in use cases such as easy payments, remittances, institutional/government-to-government cash transfers, allowing individuals to earn money by completing tasks online or on their phones, and helping individuals obtain loans. That is DeFi.
We have seen tremendous growth in the decentralized finance and open finance space. The goal of the Celo community is to provide the best infrastructure for applications in the financial field, not only supporting existing DeFi, but also supporting DeFi that may appear in the future.
Ask:
Ask:
1. How does Celo do KYC/AML?
A: First of all, we need clarification. We realized early on that financial services are particularly heavily regulated. The technology provided by Celo is useful on a global scale. So we want to make sure that the compliance framework is in place from the start, and we work with regulators around the world to learn from them, educate them, and shape the future of regulation. This is a new technology with many benefits, not the least of which is consumer protection.
Answer this question below: We have a strong legal team, including people from traditional financial institutions, financial technology and encryption fields. For example, the chief lawyer Brynly Llyr was the chief lawyer of Ripple before joining Celo. Here Previously, she worked at Paypal and Ebay. Another member, Jai Ramaswamy, joined Celo last year after working at Capital One and Bank of America, where he was responsible for AML globally. Therefore, our team is familiar with regulatory requirements and hopes to provide the best solutions for different markets within the regulatory framework.
2. The Celo Prosperity Alliance and Libra have many similarities. Is there any difference in the membership mechanism and selection? Libra faced a lot of legal problems in the process of implementation, could Celo face the same obstacles?
A: We think, and I believe everyone agrees, that the entry of Facebook is a positive signal for the application of cryptocurrency, and it may also open the door for faster and wider application of cryptocurrency. Given Facebook's track record, I think it's only natural for regulators to ask the necessary questions. In addition, any enterprise with 2 billion users has a huge responsibility.
But we do have a big difference from Facebook. Celo's mission is to empower individuals and communities, so we've been very open-minded from the start. Looking back at Libra and some of its recent changes, it can be seen that it is a permissioned network, while Celo is permissionless. Celo is truly decentralized governance, meaning anyone can run a full node or validator node or participate in the network. The Libra Alliance is limited and centralized. In addition, our stablecoin mechanism is different from that of Libra.
3. As an open source financial application blockchain platform, Celo will involve many compliance issues. Regarding compliance, how do you do it?
A: We are actively participating in global discussions on the compliance of cryptocurrencies under the new crown epidemic and the issuance of digital currencies by central banks. Two of them worked for the Federal Reserve before joining Celo and have long-term working experience in the central bank. We believe that in the future, several central banks will issue their own digital currencies. For Celo, this means a huge opportunity, we can provide infrastructure support for central banks. Our team has also published a lot of papers in this area, including a recent paper on the central bank issuing digital currency to control the velocity of currency circulation, which received a good response.
4. What is the economic model of cGLD?
A: Overall, cGLD is the functional and governance token of the Celo platform, and it also plays an important role in the stability mechanism of the stablecoin. Specifically, once the demand for stable coins increases, the agreement will issue additional stable coins and release them to the market by repurchasing cGLD. The specific mechanism is similar to Uniswap, which belongs to on-chain transactions. And it is two-way, that is, the demand for stable coins decreases, and the circulation can be reduced by using cGLD to repurchase stable coins. In view of this, the circulation of cGLD and the circulation of stablecoins change in opposite directions. Once the circulation of stablecoins increases, the circulation of cGLD will decrease. In addition, the supply of cGLD is fixed, and the price of cGLD will be affected.
5. What is the difference between Celo and other blockchains? Such as Stellar and Ripple:
A: A key difference between Celo and other blockchains is our mobile-first strategy. No other project allows running an ultra-light client on a cheap smartphone with node synchronization in a low-bandwidth environment.
In contrast to Tezos and Cosmos, these projects are permissionless PoS projects, run by a few independent validator nodes. But Celo is governed on the chain, focusing on use cases in the financial field. Therefore, many changes and functions of the protocol layer are reversely promoted by us, the members of the Prosperity Alliance, or the App developers on the chain after seeing the actual needs.
6. What is the stablecoin issuance based on? USD Digital Currency or Algorithmic Bank?
Answer: Celo is a hybrid model of digital currency mortgage + algorithm. Programmable decentralized stablecoins have certain similarities to MakerDAO's mechanism. But I think that MakerDAO's model is to generate stable coins by mortgaging digital currency, while Celo regulates the supply of stable coins through market mechanisms.
7. I think one of the biggest problems facing DeFi is that it is very vulnerable when a black swan event like 312 occurs. A large part of this is due to problems with oracles. What innovations will Celo make in terms of oracle machines and governance mechanisms?
A: We spent a lot of time thinking about this question. If you are interested, you can also go to Twitter to see a related topic initiated by our co-founder Marek. In addition, there are differences in the stablecoin mechanism of Celo and MakerDAO, which also prevents us from suffering similar incidents.
As far as oracles are concerned, we are implementing Ethereum's EIP1559, which allows dynamic adjustment of transaction fees.
Additionally, during the black swan on March 12th, we saw the price of Dai drop almost to zero due to a lack of counterparties and many vaults were liquidated. But we have implemented on-chain transactions like Uniswap, namely CP-DOTO, to avoid similar incidents from happening. We have also published a large number of articles in this field, and there is also a detailed paper on stablecoins. If you are interested, you can find it. In addition, we also do real-world simulations, such as one at MIT early last year.
8. Is Celo an ERC20 token?
A: Celo has its own layer 1 public chain, but our stablecoins and cGLD are compatible with ERC20, which allows transaction fees to be paid in stablecoins on the Celo platform.
9. Can you tell us about the Coinlist auction and the extra rewards that those who participate in the auction can earn?
A: Given that we already have a candidate mainnet running stably, we decided to do a Dutch auction for community members. Anyone can participate in the auction at a price they think is suitable, and the participants whose final bid is not lower than the transaction price will purchase cGLD at the final transaction price. In addition, we also have rewards for helping the community to promote.
10. Celo hopes to enable all mobile phone users around the world to use inclusive financial services. In terms of market strategy, which regional market will you target first?
A: Celo's layout is global, and members of the Celo Prosperity Alliance include many global and regional organizations. In addition we have a very active developer community. For example, Celo Camp, which was initiated by the founders of Libra Camp, now has more than 250 active participants. In addition, we also have the Celo Grant Program and the Polychain Ecosystem Fund to develop and grow the community.
Some of the interesting usage scenarios include:
In Brazil, an organization is developing a solution on Celo that will allow Brazilians to earn money by performing tasks, sharing contact information, answering surveys or providing product feedback.
In Mexico, through the Celo platform, urban workers can support relatives far away from home.
In the Philippines, Celo provides easier, faster and cheaper remittance methods to help Filipinos working overseas send remittances to their families in the country.
11. What is the difference between a full node and a verification node?
A: Check out our documentation for the respective designs and mechanics. The difference from other projects is that Celo provides full-node incentives, that is, running full-nodes can also be rewarded. The reason for this design is that the more full nodes there are, the more beneficial it is for ultra-light clients on mobile phones. So we hope to attract more full nodes.
There are also incentives for verification nodes, currently a fixed reward of 75,000cUSD/year. See our documentation for details. You can also go to Celo's official website and community website to learn about the current status of verification nodes and the status of nodes that have previously participated in the testnet (with incentives). Globally, a total of more than 400 nodes registered, and eventually more than 100 participated in the election of verification nodes. I'm glad to see the wide participation of the community.
12. When will the Coinlist auction price be announced? What is the specific mechanism?
A: One thing I need to remind everyone is that participation in the auction is limited, so please make sure to check the terms and conditions on Coinlist to ensure that you are a qualified participant. The auction will be held on May 12, Beijing time, and will last for 12 hours. The price discovery mechanism is: the last bid is lower than the previous one, and the price gradually decreases until the number of cGLD bids reaches the supply of this auction. At that time, the bid will be the transaction price. All bidders whose quotations are not lower than the transaction price will eventually purchase the amount of cGLD they bid at the transaction price.
13. Are there any applications already in China?
A: My team and I spent a lot of time last year in Asia, including China. We are impressed by the level of understanding of technology in the encryption community here. Our team belongs to cLabs and is one of the members of the Celo Prosperity Alliance, mainly responsible for protocol development and wallet open source. But many applications in the Celo ecosystem come from participants in the ecosystem, such as members of the Prosperity Alliance and other participants.
14. At present, the platform with the most financial services is Ethereum, and Ethereum 2.0 has also received a lot of expectations. How to let the DeFi team in the industry migrate to Celo?
A: We are fans of Ethereum. Celo was originally a fork of Geth. Although it has its own PoS consensus protocol, there are many differences from Ethereum. But we still have many friends in the Ethereum ecosystem. And we have achieved full compatibility with EVM, that is, for developers who develop applications on Ethereum, it is also easy to develop on Celo. Like many other industries, this industry can also have multiple service and product providers, focusing on different use cases and directions.
Specifically, for developers, Celo's appeal is that it can make the apps it develops available to mobile phone users. The Celo Alliance for Prosperity can reach more than 400 million users around the world, most of whom only have a mobile phone, do not have a computer, or do not know how to use a computer. This also limits the application of many good Defi products. We hope to bring Defi products to more mobile users. We cannot cover everything, but focus on financial use cases.
15. Celo main network information and follow-up plans?
A: Last Wednesday, our mainnet candidate (RC1) was up and running. The main work now is to migrate to the main network, and improve and add new functions through the governance of the community chain. The migration to cGLD will begin on May 18, when cGLD will also be traded on exchanges.
