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This page is for anyone who wants to understand how Celo works — developers evaluating the chain, operators joining the network, or readers following a protocol-level question. Celo is an Ethereum Layer 2: an OP Stack rollup that posts its data to EigenDA and settles to Ethereum, run since March 2025, when Celo completed its migration from a standalone Layer 1. What makes it distinct from other L2s is what the protocol itself guarantees: 1-second blocks, transaction fees below a cent, gas payable in stablecoins from any ordinary account, and a stablecoin system and identity layer built in at the protocol level.

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How the network is built

Celo runs the OP Stack, the modular rollup framework, with two deliberate substitutions — described in detail in Celo’s L2 architecture:
  • Execution. A sequencer orders transactions into 1-second blocks. Execution is EVM-equivalent: contracts, wallets, and tooling that work on Ethereum work on Celo. The one Celo-specific precompile that survives from the L1 era implements token duality, which lets CELO behave as both the native token and an ERC-20 without wrapping.
  • Data availability. Instead of posting transaction data to Ethereum as blobs, Celo posts it to EigenDA; only the data-availability commitments go to Ethereum. This is what keeps fees low and predictable at 1-second block cadence.
  • Settlement. State roots are proposed to Ethereum, where a fault-proof system with a challenge window secures withdrawals. Independent challengers can dispute invalid state roots during that window, and a Security Council holds the protocol’s emergency keys.
The full specification of these mechanisms — transaction types, fee rules, finality, upgrade history — lives in the Specification section.

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Paying for transactions

Celo keeps two fee properties that shape everything built on it:
  • Fees stay below a cent. The protocol configures the OP Stack’s L1 and operator fee components to zero and relies on EigenDA’s low data costs, so a typical transaction costs less than $0.01 — the mechanics are specified in Transaction fees.
  • Gas can be paid in stablecoins. Fee abstraction is implemented at the node level — not through paymasters or relayers — so any externally owned account can pay gas in USDm, USDC, USDT, or another allowlisted currency using a CIP-64 transaction. A user or an AI agent can hold nothing but dollars and still transact.

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Stablecoins

Stable value is a protocol-era concern on Celo rather than an afterthought. Mento, the stablecoin protocol that began as part of Celo’s core contracts, issues USDm, EURm, and a family of local-currency stablecoins, alongside third-party issues like USDC and USDT. Because of fee abstraction, these are not just assets on the chain — they are the currencies the chain itself accepts for gas.

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Staking, epochs, and rewards

CELO holders lock their tokens and vote for validator groups, and elections run every epoch — roughly daily — through permissionless smart-contract calls. Since the L2 migration, elected validators no longer produce blocks; they operate community RPC nodes that serve the network. Voters, groups, and operators earn epoch rewards, which also fund the community fund and carbon offsetting.

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Governance

Every meaningful parameter of the protocol — from fee currencies to contract upgrades — is controlled by on-chain governance. CELO holders lock tokens to vote on proposals; approved upgrades to the core contracts execute on-chain. The governable parameters page lists exactly what governance can change.

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Identity

Celo’s original mission — payments that work on a phone — left it with an identity layer most chains lack. SocialConnect maps phone numbers to addresses privately through ODIS, which is what lets MiniPay users send stablecoins to a contact instead of a hex string. Self brings zero-knowledge proofs of personhood, age, and nationality on-chain, and the ERC-8004 trust registries extend the same model to AI agents.

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What the protocol is optimized for

Put together — sub-cent fees, 1-second blocks, gas in stablecoins, phone-number identity, proof-of-human — the protocol is built for two audiences: people using mobile-first apps like MiniPay’s 10M+ activated wallets, and AI agents that pay, get paid, and prove who stands behind them using x402, ERC-8004, and the rest of the agent stack.