Cryptocurrencies,  Technology

Mission and money: Three Celo validators talk staking for the Libra competitor

Wade Abel, Aaron Boyd, and Pranay Mohan took very different routes to becoming validators on Celo’s payments-focused, proof-of-stake blockchain

Like most of Celo’s supporters, Wade Abel, Aaron Boyd, and Pranay Mohan are excited by the payments-focused, open-source blockchain’s social mission of bringing the poor and unbanked into the financial system. 

Much like Facebook’s Libra, Celo’s goal is to create a dollar-backed stablecoin—Celo Dollars, or cUSD—that can be used to transfer money across the street or across the globe cheaply and easily. Remittances sent home by migrant workers to families without bank accounts, for example, currently cost 3% to 7% of the total amount transferred, and can take days to clear. A blockchain-based system like Celo could make the process nearly free and instantaneous. 

Another goal is to make using cryptocurrency much easier, as Celo Dollars will be sent not to a wallet with a long string of random letters and numbers, but to a mobile phone number. Aside from payments, Celo will support other decentralized apps, ranging from microloans to small-scale insurance.

As validators of the proof-of-stake protocol, the trio is invested, professionally and personally, in seeing it succeed. 

So far, it’s doing pretty well. In mid-May, an auction of Celo governance tokens (CELO) raised $10 million, and blockchain creator cLabs made the governing Celo Foundation a fully non-profit organization supporting the open-source Celo Platform. 

On May 18, the mainnet went live, meaning Celo can be transferred on the blockchain. It also meant validators were needed.

Competitive validating

Celo’s validators have to have funds to stake—10,000 Celo Gold governance tokens is the current minimum—but there’s more to it than that. Validators are chosen by a vote of the Celo community.

Celo validators
Aaron Boyd of Pretoria Research Lab (Photo: Leo Jakobson)

Celo uses a Byzantine Fault Tolerance consensus mechanism. That’s a complex system that boils down to requiring two-thirds of the validators to reach a consensus and validate a newly mined block. So up to one-third of the validator nodes can fail or act maliciously without affecting the blockchain. It also limits how many validators the system can use to a few hundred. Celo is currently using 100. 

Votes are for both individuals who personally stake Celo Gold (CELO) and the small teams in which they operate, which also put up 10,000 CELO—currently $1.75 each on CoinMarketCap.

“It’s a competition to some extent,” said Boyd, who is validating on behalf of Pretoria Research Lab, a company incubated by Next Big Thing, a firm that he describes as a company builder—essentially a start-up lab. 

“You do need to support the community. I would say in this case the form that’s taken is—and this was sort of [encouraged by] the Celo Foundation—you have to make yourself valuable to the community,” Boyd added. “No one’s going to just… earn these rewards for nothing, if you just have a machine humming in the corner. In fact, the opposite of that was explicitly encouraged.”

An inclusive community

Like his peers, Boyd was voted in after participating in the Great Celo Stakeoff, an incentivized testnet created by the Celo Foundation, that ran in three phases between Dec. 4 and Feb. 28. The Baklava testnet competition let participants earn as much as 70,000 Celo Gold (cGLD) while gathering points known as Baklava Test Unit (BTUs—there were many foodie puns) for strengthening the protocol and maintaining secure, stable, and reliable validator set-ups. The genesis block validators were taken from that group.

“The teams have been doing well are ones that are making tools and our third-party sites and things,” Boyd said, noting that a strong community developed around Celo’s Discord forum. 

Wade Abel, founder of The Passive Trust (Photo: Leo Jakobson)

That was also Abel’s experience. 

A software engineer fairly new to blockchain and cryptocurrency, Abel participated in a mentor-mentee program Celo created prior to the Great Celo Stakeoff. “It put me in contact with a couple of great mentors that helped me.”

Even during the competitive Stakeoff, the Celo community “was very inclusive,” Abel said. You could go “into the Discord channel, start asking questions and lots of people would happily answer your questions. Anything you needed to know. If you wanted to get involved, they’d put you in the right direction. And if you get involved in the community, that opens arms.”

Creating that community was a goal of cLabs, the company that created Celo. Mentoring was one way to earn BTU points during the Stakeoff, according to Mohan, a product manager at cLabs. But it was a serious competition as well. There was a leaderboard, and the top 70 participants received grant of 10,000 to 70,000 Celo Gold, helping them with the stake needed to become validators. The top 50 also got a vote boost.

“People underrate how important community is in crypto networks,” Mohan said. “You have to create a culture and a core set of core values that appeals to people. In Bitcoin, that is this idea of sovereign wealth ownership. In Ethereum, it’s this idea that we want a computer that’s not controlled by one person—we want a decentralized platform. 

“In Celo, the value is that there’s this fundamental belief that everyone is connected and that everybody has something to offer the world. But a lot of those people are gated by financial systems that are not inclusive and do not include them into the economies that would allow them to share their gifts with the world. What Celo does is it attracts the people that resonates with.”

Accidental involvement

Both Boyd and Abel fell into Celo, to some extent, driven by the timing of the Great Celo Stakeoff.

In Berlin-based Boyd’s case, he’d seen the fledgling protocol’s marketing at conferences and other places. 

A software engineer by trade, Boyd said he is focused on the “explosion” of the decentralized finance ecosystem, which includes staking.

Pranay Mohan, product manager at cLabs (Photo: Leo Jakobson)

“We [believe] getting in at the testnet stages of new protocols is the best way to become a validator… and to forge good relationships with the community,” he said. “But the more I got into it in the testnet competition, I realized Celo aligns quite well with a lot of my personal idealism about blockchain in general.”

Working on the “democratization of access to economic tools,” changed his mindset from experimenting with Celo to diving in deeply, Boyd added. “From a humanist point of view, in the developing world everyone has a mobile phone and should be able to send money freely between individuals.”

Abel, on the other hand, is a self-taught coder who became interested in proof-of-stake blockchains along the way and heard about Celo just as it began the Great Celo Stakeoff. 

The project stood out, he said, because it had “a strong focus on making the world a better place, this emphasis on inclusion and prosperity.”

Besides, Abel added, “I had the opportunity to get in at the beginning.”

Independents are important

Both the community and the grant were particularly important to Abel, who does not have a team behind him like Boyd and Mohan do. 

“There’re a lot of different entities that are validating the moment,” said Abel. “You have your big players working as infrastructure services, and then it goes all the way down to the small, independent validators. I think it’s necessary to have all of those layers to help with the decentralization and also to promote the goal of inclusion. 

“What really worries me is if the system gets taken over by these big players. When you start earning and relying on income, then your motivation changes. It worries me that all the power will consolidate. And so, I think it’s super important to have independent validators within the system.”

Which isn’t to say becoming a Celo validator is easy, Abel notes. “You need to, first, have the technical knowledge and then also have the backing. And then for Celo in particular, you would have to facilitate votes somehow. You have to have, I guess, marketing campaigns to offer some sort of different service to other validators.”

Calling himself one of the “more independent” Celo validators, Abel said that he’s planning to build his brand—he is founder of The Passive Trust—by donating 30% of his staking rewards to helping with the stability protocol of the network.

He’s also donating another 10% to charity. A Vancouver resident, Abel is looking at bringing the city’s homeless population—a substantial number of whom have cellphones—onto Celo, he said. The idea is to get local businesses to sell food for donated Celo Dollars.

But he does see staking as a business. “At the moment I’m just working with a couple of blockchain companies,” said Abel. “Obviously I want to grow that with time.”

Updated July 27 at 5:51 p.m. to correct number of validators Celo is currently working with.

Updated July 29 at 3:25 p.m. to add Boyd’s position at Pretoria Research Labs.

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.