Celo (CELO) is a blockchain that aims to tackle one of the key user experience problems with cryptocurrency: confusing public keys. Celo swaps public keys – long scrambled strings of characters used to identify cryptocurrency accounts – with a mobile phone number. That makes sending and receiving cryptocurrency much easier and more accessible for newcomers to the market.
CELO is the native token that powers Celo’s platform. According to a company blog post, Celo’s supply is limited to a total of 1 billion CELO native tokens. Some 600 million were distributed when celo was introduced, and at that time, the team estimated 12.5% of the tokens would go to pre-launch sales, 18.5% to protocol contributors and developers, 30% to users securing the network by “staking,” 19.5% to community grants, 7.5% to “operational” grants and 12% to the “initial reserve” for managing Celo’s stablecoin.
After the token was launched in May 2020, its price bounced between $1.42 to $1.92 before surging to a peak of $4.46 in August 2020. But it soon crashed again to its lowest price ever at $1.36.
At the beginning of 2021, CELO’s price picked up steam again, surging to a peak of $6.15 at the end of April. Highlighting the volatility of cryptocurrencies, it crashed yet again to a low of $1.9, but by September, CELO’s price skyrocketed to its all-time high of $7.63.
How Celo works
As mentioned above, Celo secures public keys with a user’s cellphone number. Because most people use mobile phones every day, the associated numbers are much more recognizable than cryptocurrency public keys.
CELO is the native asset underpinning Celo, which users can earn for “staking” their coins to secure the network using the proof-of-stake method. Because cryptocurrencies don’t have one leader in charge, they need an underlying mechanism to hold the distributed networks together. Bitcoin, the first-ever blockchain, uses proof-of-work. But proof-of-stake has emerged as a popular alternative because it’s supposedly more eco-friendly, though some experts argue the algorithm has fatal security flaws.
The Celo team is also focused on stablecoins, which are less volatile than many cryptocurrencies because they are tied to the price of fiat currencies like the U.S. dollar. Celo aims to offer many of the benefits of cryptocurrency, without the volatility that plagues them.
As such, Celo has a second key asset, celo dollars (cUSD), which is pegged to the U.S. dollar. The Celo white paper describes how Celo stablecoins could be pegged to other global assets as well, such as the euro or barrels of oil, which might be preferable in other local communities.
Key events and management
Tech entrepreneurs Rene Reinsberg and Marek Olszewski co-founded Celo in 2017 and launched the platform to the public in 2020.
As of December 2021, Celo had raised more than $65 million from venture capital firm Andreessen Horowitz (a16z), former Twitter CEO Jack Dorsey and Coinbase Ventures, the venture capital arm of the Coinbase exchange, among others.
In June 2021, a16z joined Deutsche Telekom to stake Celo tokens. A16z also led a $20 million fundraising round for Valora, a wallet built on Celo. The mobile app for sending payments and remittances over the Celo network has 53,000 monthly users from more than 100 countries.