We’re going to dive into a new token our team has built for not just Poof users, but for the entire Celo community: Rewards CELO (rCELO). rCELO holders will be able to earn more CELO just by holding rCELO. For users who are voting for specific Celo validators, they will also eventually have the ability to direct their votes towards those validators.
How does rCELO work?
To explain how rCELO works, we should first understand the following:
- Validator group voting rewards
- Savings CELO (sCELO)
Validator group voting rewards
Validator group voting rewards are a mechanism native to the Celo blockchain. Today, users can lock their CELO and use their locked CELO as votes towards validator groups. Users who do this earn roughly 5% APY on their staked CELO.
This is a great way for CELO holders to earn rewards. However, when users want to trade away their CELO, they must wait 3 days to unlock their CELO before trading it away.
sCELO makes it possible to trade locked CELO. To obtain sCELO, you will need to deposit CELO into the sCELO contract. The sCELO contract will mint you sCELO tokens representative of your CELO deposit. Under the hood, the sCELO contract locks your CELO and votes for a validator group. The sCELO contract earns CELO over time through the mechanism we described above.
When you return your sCELO to the sCELO contract, the contract burns the sCELO and gives you your original CELO back along with any earned interest. Returning sCELO for CELO is still subject to the 3 day lockup period, but because sCELO is not a locked token, you could instead trade away sCELO for CELO on a platform like Ubeswap.
With sCELO, we can now earn interest on a tradeable token. Unfortunately, sCELO does not allow users to vote for the validator groups they want to vote for.
rCELO can do everything sCELO can while allowing users to vote for the validator groups they want to vote for. At genesis, rCELO will be built on top of sCELO. As the Celo ecosystem grows, we anticipate validator groups building their own wrapped tokens (e.g. anchorCELO, bisonCELO, figmentCELO etc.) like sCELO, which will let users earn interest while voting for a group of their choice. rCELO will be able to tap into that development by letting users mint rCELO from those new wrapped tokens.
With rCELO, users will be able to earn interest on a tradeable token and vote for a validator of their choosing.
How to mint rCELO?
Let’s walk through an example of how a user might mint rCELO:
- Alice starts with some CELO
- Alice wants to vote for the Wotrust validator group so she exchanges her CELO for sCELO. She does this through a direct deposit on Celo Terminal or through a CELO→sCELO swap on Ubeswap
- Alice exchanges her sCELO for rCELO through the Poof interface
In this example, Alice wanted her votes to go towards the Wotrust validator group. If instead Alice wanted to vote for the Y validator group, she could have turned her CELO into yCELO into rCELO. This, however, requires yCELO to exist and yCELO to be supported by rCELO.
What can I use rCELO for?
In addition to just holding rCELO to earn rewards, rCELO can soon be used for:
- Earning rewards by providing liquidity to the rCELO+CELO Ubeswap pool
- Mining POOF by providing liquidity to the Poof mining program. More details on that to come soon!
Is rCELO open-source?
Yes, it sure is!
Has rCELO been audited?
Yes, rCELO has been audited by Bramah Systems