Celo Staking

Celo stakers receive rewards when their chosen group elects validator(s) who advance the blockchain by minting blocks. These rewards automatically compound, using the funds to increase the voting weight behind the same group. This incentivizes ongoing participation in the election progress.

Validator groups receive a piece of the rewards allocated to validators for advancing the blockchain.

Key considerations

What makes a good validator? Validators are critical to the success of the Celo network. Choosing the right validator means considering several factors, some of which are listed below.

1. Proven Identification: Validators and groups who supply verifiable DNS claims can securely prove that they are the entity responsible for a validator or group.
2. Voting Cap: Celo sets out a voting cap for each validator group. This cap is the number of votes needed to elect all validators plus one more validator. The cap is enforced at the time of voting: no user can cast a vote if it exceeds the votes allowed for the cap. A group’s cap rises when adding a new validator or the total amount of voting Locked increases. If a validator chooses to leave or the number of locked falls, the cap reduces. When selecting a validator group, choosing only those below the cap threshold is important.
3. Reliability: Votes should be allocated to reliable participants. Celo's BFT consensus relies on two-thirds of participants positively contributing honestly to the network.
4. No Recent Slashing: It is important to look for groups that have suffered minimal slashing. While a voter’s funds are never at risk, poorly performing validators are harmful to overall network health. Choosing a good validator improves the network's performance while increasing rewards.
5. Running an Attestation Service: The Attestation Service allows users to verify that they can access a phone number and map it to an address. It’s a service that validators can run, making it easier for new users touseg Celo.

Validator Requirements

A limited number of validators are allowed in the network, so reliable infrastructure is critical. The current requirement for running a validator is 10,000 CELO to be registered and 10,000 CELO per member validator to register a Validator Group. For a full outline of staking requirements for validators, see here.

Slashing Risk

Celo tokens used for validator voting are never at risk. However, the performance of an elected validator can influence the rewards a staker receives—resulting in higher or lower returns based on the validator's efficiency.

Tokens locked in the smart contract for voting remain secure and are always available for future unlocking. Celo slashing only applies to validators and validator groups, not to delegated funds. This ensures that a delegator's funds are protected.

Slashing at the validator level occurs if validators demonstrate poor uptime. To maintain uptime, a validator must have minted at least one block out of the previous ten.

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