How much could you earn on Celo?
The Celo Validator Rewards Calculator is at your service
Meet the Celo Validator Rewards Calculator: a tool designed to help
potential Validators estimate their earnings on Celo.
The Role of Validators
Validators help secure the Celo network by running Byzantine Fault Tolerance (BFT) consensus to create blocks. The nature of BFT is such that even if up to one third of Validators are offline, faulty, or malicious, the Validators are able to reach agreement, and blocks continue to be created*.
While BFT offers many benefits in terms of higher throughput, lower latency for transaction finality, and significantly lower energy impact, BFT does not currently scale well to a large number of Validators. This means that the size of the Validator set must be limited to no more than a few hundred**, and each Validator can have a significant impact on the performance and security of the network.
This means that it is in the best interest of network participants for these Validators to be as secure and available as possible. This is likely to involve running with active monitoring, a set of proxy nodes to mitigate DDoS and attack surface, and using hardware wallets attached to hardware residing in secure co-lo facilities. The costs associated with this may be substantial, possibly thousands of dollars a year, plus the cost of people’s time to setup and operate the nodes.
The Celo Protocol rewards Validators for their efforts via “epoch rewards”, which are distributed every day in Celo Dollars, a stable value asset that the protocol aims to peg to the US Dollar, and are intended to cover the costs of running a validator plus some additional overhead to incentivize participation. These rewards are denominated in Celo Dollars since the majority of Validator’s expenses are likely to be incurred in fiat currencies, which helps make returns more predictable regardless of volatility in the price of Celo Gold.
Celo Validator rewards are designed to be competitive with other proof-of-stake networks. Users running Validators in the Celo network can expect to receive:
- ~6% cGLD voting reward for cGLD locked by validator and validator group, and
- Up to 75,000 cUSD in epoch rewards annually for every Validator that they run.
This reward is comparable to the rewards currently received by Validators with a 1% delegated stake in the major Delegated Proof-of-Stake networks.
How it Works
The Celo Validator Rewards Calculator helps those interested in running Validators on the Celo network estimate the rewards they may receive from the protocol from doing so. Importantly, these estimates make a number of assumptions, including perfect uptime, a 75,000 cUSD per year Validator reward, and a 6% cGLD voting reward. The calculator was intentionally made to be simple, so if you’d like to go deeper, please feel encouraged to fork the code and make a Celo Rewards Calculator of your own!
Validator Rewards Calculator
Validator Rewards Calculator Choose your parameters With this pct. of votes, the number of 'elected validators' in the…
To get an estimate of your annual rewards, simply answer these five questions:
1. Are you running your own validator group?
Validators in the Celo network are organized into Validator Groups. Holders of Celo Gold vote for Validator Groups, rather than voting for Validators directly, in order to elect the set of Validators that will participate in block creation. The members of a Validator Group may be independent Validators, or they may be Validators run by the same organization that controls the group. Groups receive a share of the rewards distributed to their members, so whether or not a Validator is running their own Validator Group may affect the amount of rewards that they receive.
2. What percentage of locked Celo Gold do you expect to vote for the validator group you’re in?
Only the Validators elected to participate in block creation on a given day receive epoch rewards. Elections are run using the d’Hondt method, a form of proportional representation. The percentage of Celo Gold voting for a group will determine the number of Validators that may be elected from that group. Note that there are limits on both the percentage of votes that a group may receive as well as the number of members that a group may have, both of which are reflected in the calculator.
3. How many of the group’s Validators do you expect to run?
Since each Validator you run has the opportunity to earn rewards, the more Validators that you run and get elected, the more rewards you may receive.
4. What percentage of rewards does the Validator group receive via the group share?
If your Validators are members of a group that you do not control, a share of the rewards will go to that group. This value is determined by the group.
5. Estimated price of Celo Gold (in USD)
Participants in the Celo network must lock up Celo Gold in order to run a Validator or Validator Group. This locked Celo Gold can be used for voting in Validator elections, and earns epoch rewards in addition to those distributed to Validators. Because these rewards are denominated in Celo Gold, the calculator needs an estimate of the Celo Gold price in order to translate these rewards into dollars. Note that the calculator assumes that the minimum required amount of Celo Gold is locked up and that this amount is used for voting in Validator elections.
The Bigger Picture
Celo Gold Breakdown at Mainnet Launch
There will be 600 million Celo Gold live upon Mainnet Launch with an additional 400 million coming into existence via epoch rewards. Subject to on-chain governance, half of the epoch rewards are expected to be distributed linearly over 15 years with the remaining half reducing out over time (please see here for more technical details).
The Epoch Rewards (400 million) will be distributed by the protocol as 75% (300 million) for validators and staking, 24.5% (98 million) for a Community Fund, and 0.5% (2 million) for a carbon offsetting fund—all of which is subject to on-chain governance and sufficient stability protocol reserves.
Anticipated Celo Gold Breakdown Over Time
Over half of the 1 billion total Celo Gold will be distributed in the form of community rewards, including: 300 million for Staking & Validator Rewards, ~195 million for Community Grants (both on-chain and via Foundation), and 75 million for Operational Grants to the Foundation and cLabs (post mainnet launch).
The remaining anticipated Celo Gold is divided amongst Celo Gold Purchasers (~125 million), cLabs Team and Protocol Contributors (~185 million), and the Initial Reserve (120 million).
As anticipated allocations are partially dependent upon on-chain governance and foundation governance to optimize for the long-term sustainability of the network, these figures may change in the future.
Anticipated Celo Gold Circulating Supply
Circulating Supply is the best approximation of the number of digital assets that are circulating in the market and in the general public’s hands (see source). The final circulating supply will be affected by a series of factors including: exact mainnet timing, on-chain governance, and community member and other recipients’ lock up and distribution schedules. Understanding that the final circulating supply is unknown at this time, the below information is estimated.
The initial 12-month circulating supply following Mainnet release is expected to be approximately 200 million Celo Gold.
Become a Validator
If you’re interested in running a Validator or Validator Group on the Celo network, now is the perfect time to get involved! The Great Celo Stake Off is running from now until early February, where you can gain experience running a Validator or Validator Group, meet other prospective Validators, and compete for the chance to earn Celo Gold on mainnet.
* For more information, please take a look at Tim’s blog post on Consensus and Proof-of-Stake in the Celo Protocol
** For now! To learn more about how BFT may be scaled up to millions of participants, please take a look at Marek’s blog post on BFTree
Additional Disclaimers: This information is provided as of February 5, 2020 and may not reflect recent developments and activities. Further, as discussed throughout this post, the estimated circulating supply of Celo Gold listed here is subject to change and variability due to several factors including, but not limited to, the exact timing of mainnet launch, on-chain governance and related decisions of the community, and community members’ and other recipients’ Celo Gold lock up and distribution schedules. It is important that readers not put undue reliance on these projections. These projections are provided for informational purposes only.