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 taking into account a number of 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 set to be the number of votes that would be 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 amount of Locked falls, the cap reduces. When choosing a validator group, it is important to choose only those below the cap threshold.
3. Reliability: Votes should be allocated to those who are reliable. This is because the BFT consensus implemented by Celo 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 performance of the network while also increasing rewards.
5. Running an Attestation Service: The Attestation Service allows users to verify that they have access to a phone number, and map it to an address. It’s a service that validators have the option of running, and it makes it easier for new users to begin using Celo.

While these are all of the ‘on-chain’ criteria for choosing a validator, there is also merit in choosing a validator who helps improve the Celo community. This means voting on certain validator groups may mean supporting those entities who develop educational content for Celo, improve the sustainability of the project and have initiatives around financial inclusion.

Validator Requirements

As there are a limited number of validators allowed in the network, 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.