StakedCelo is a Celo-native open source liquid staking protocol developed by cLabs to encourage the active participation of users in the protocol. It allows anyone to stake CELO to support the network and receive the Epoch Rewards associated with staking, and at the same time to keep these assets liquid so that they can be used to help participate in and engage across other applications in the ecosystem. The StakedCelo protocol can be directly accessed through the smart contracts deployed on chain, or through a WebApp developed by cLabs. Users can also obtain stCELO on decentralized exchanges or engage in the protocol through other third parties that have chosen to integrate StakedCelo.
Liquid staking protocols allow users to receive staking rewards without locking assets or maintaining staking infrastructure to increase active participation in the protocol. Users can deposit tokens and receive tradeable liquid tokens in return to further encourage active participation of users in the protocol, dApps, and the wider Celo ecosystem. The assets are controlled by smart contracts in a non-custodial manner.
Users can deposit CELO into the StakedCelo protocol and in turn receive stCELO tokens representing their assets transferred to the protocol. The protocol stakes deposited CELO and receives the Epoch Rewards associated with staking, which are shared equally among all holders of stCELO. The protocol is completely non-custodial, meaning that no one can ever withdraw the funds of a given user besides that user themself. At any point in time, a user can choose to withdraw their assets from the protocol by returning the stCELO and receiving the corresponding CELO (including accrued rewards).
Note that the increase in CELO balance for a user only results from receiving Epoch Rewards and no lending or borrowing or other activities take place. Unlike other Proof-of-Stake protocols, Celo does not reduce the Locked CELO balance of holders if a validator they are voting for is slashed. Together, this means that no principal is at risk under normal operating circumstances when using StakedCelo.
Celo Epoch Rewards are similar to block rewards in other blockchains and used to create several types of incentives which help to keep the blockchain working securely. Among others, CELO holders who lock their tokens into Locked CELO receive rewards for active participation, including voting for groups that elected validators. The StakedCelo protocol receives such rewards as it stakes CELO into Locked CELO. These rewards are automatically compounded at the Celo protocol level.
The rewards accruing in the StakedCelo protocol depend on several factors, including participants and events. For example, the validator groups that StakedCelo votes for and the behavior of their validators (the Slashing Penalty and the Uptime Score influence the distributed tokens), the total amount of CELO staked (the reward rate is adjusted if the number of staked CELO deviates from the target) or Celo governance (Celo governance can vote to change the underlying mechanism fundamentally). More details can be found in the Celo docs on Epoch Rewards.
stCELO is an ERC-20 compatible non-rebasing token. This means that the amount of tokens a user has in their wallet stays constant over time if that user takes no actions. Consequently, one stCELO is increasing in value over time (measured in CELO), as epoch rewards are being accrued in the protocol. Note that this only describes the value of stCELO and CELO when being staked and unstaked via the StakedCelo protocol. Prices on decentralized exchanges are subject to market conditions, market fluctuations, and not per se predictable.
StakedCelo is the name of the protocol and stCELO is the ERC20 token users receive when staking their CELO with the protocol.
To withdraw stCELO from the protocol and transfer it into unlocked CELO a waiting period of 3 days has to elapse. This is based on the implementation of the Celo protocol (specifically the Locked Gold contract) and the same waiting period as if the CELO were staked directly.
After a user unstakes stCELO, the WebApp ensures that all the votes for the validator groups are withdrawn. Then the three day waiting period starts. After this has ended, the WebApp automatically claims the now available CELO, which then appears in the user’s wallet (see “Deposit and withdrawal flows” in the documentation for details). The claiming should take about 5 minutes. If it takes longer, the WebApp backend is not working properly. Feel free to contact the core engineering team and protocol validators on Discord.
StakedCelo votes for a group of randomly selected validator groups, adhering to the principles of increasing decentralization and on-chain verifiable neutrality. The details of the selection process are described here.
There exist a number of potential risks when staking with StakedCelo, in particular smart contract security, which we discuss in more detail below. There is an inherent risk that StakedCelo could contain a smart contract vulnerability or bug. The code is open source and has been audited, however, this provides no guarantee that it will always perform as intended. Additionally, independently of how CELO is staked, general staking risks apply. In particular, the underlying tokens have to be locked up for 3 days, meaning that a user is dependent on secondary markets for stCELO for instant liquidity. To access a predictable exchange rate of stCELO -> CELO withdrawing from the StakedProtocol can be used, however, in that case the withdrawal period of 3 days has to be awaited.
At this time, there are no fees. This might change at a later point in time and will be enacted through on-chain code changes.