What Is Celer Network (CELR)?

Celer Network is a layer-2 scaling platform that ensures mass adoption of blockchain applications on Ethereum, Polkadot, and other blockchains. Layer 2 is a technology or a network that operates on an underlying blockchain protocol to improve efficiency and scalability. The whitepaper claims that Celer Network is a trustworthy, privacy-preserving, and internet-scale platform that allows users to operate, build, and use high-scalable DApps. Interestingly, Celer Network is a networked system that runs with present and future blockchains.

Modern economic activities are based on the flow of information and value. The transfer of information has progressed from discrete occurrences via pigeon networks to continuous flows across the internet at the speed of light. However, the transfer of value is still lacking in speed, thereby creating a mismatch in the evolution of economic activities.

In order to ensure a faster flow of value, blockchain must work at the speed of light. As stated in the whitepaper, blockchain is suffering from low processing power compared to traditional value transfer tools. Therefore, scalability is a significant challenge that hinders the mass adoption of blockchain technology.

Another essential aspect stated in the whitepaper of Celer Network is that as blockchain is based on an on-chain consensus mechanism, the technology suffers the limitation of such consensus. On-chain consensus is a threat to privacy, as all transactions are permanently public. Therefore, it is essential to look beyond on-chain consensus for enabling internet-scale blockchain systems with decentralization, trust, and more privacy.

The Celer Network team gives more importance to off-chain scaling technology, thereby bringing internet-scale technology closer to the current and future blockchain technology. Celer Network is designed with an off-chain technology stack for attaining higher flexibility and scalability. In addition, Celer Network aims to guarantee the privacy and robust security of the crypto-economic model to balance any new tradeoffs.

The Celer Network is composed of well-layered architecture, which helps in simplifying the development, maintenance, and system design. Hence, the network consists of cStack, an off-chain technology stack that may be built on different blockchains.

There are two essential products provided by the Celer Network, which are Layer2.Finance and cBridge. Layer2.Finance helps to eliminate the challenges that prevent DeFi from mass adoption. The challenges for DeFi adoption are high transaction fees and difficulty in use and navigation. Layer2.Finance enables people to access the existing DeFi protocols at a small cost.

cBridge is a multi-chain network that provides low-cost and instant transfer of value across and within Ethereum’s layer-2 chains and Ethereum main chain. The multi-chain network also aims to provide such value transfer across and within the future layer-1s.

CELR is the protocol token of the Celer network. The Celer Network provides three cryptoeconomic mechanisms to complete the off-chain scaling solution. The first mechanism is proof of liquidity commitment (PoLC), a virtual mining process that helps acquire stable liquidity for the off-chain ecosystem. To participate in PoLC, a user must lock htheiris idle liquidity (digital assets) to the on-chain platform for a specified duration, with CELR provided as a reward to such users.

The second mechanism is liquidity backing auction (LiBA), which helps off-chain service providers to achieve liquidity through crowd-lending with negotiated yield rates. Those who stake more CELR are more likely to be chosen to offer liquidity to on-chain service providers. The third mechanism is state guardian network (SGN), a special sidechain that protects users when they are offline to ensure that their states are available for disputes. To gain guarding chances and service fees from users, guardians must stake their CELR into SGN.

History of Celer Network (CELR)

The draft of the whitepaper of Celer Network was published on June 15, 2018. The founding members of Celer Network consist of highly knowledgeable tech experts. The founding team of Celer Network includes Dr. Mo Dong, Dr. Junda Liu, and Dr. Xiazhou. Dr. Mo Dong is an expert in algorithmic game theory. He is also renowned for improving cross-continental data transfer speed by 10 folds with a non-regression learning algorithm.

Dr. Junda Liu is the first to develop and propose DAG-based routing for achieving nanosecond network recovery. Dr. Xiaozhou Li specializes in developing scalable algorithms.

How Are New CELR Coins Earned?

New CELR coins can be earned by contributing to the processes of the Celer Network. Users can participate in Celer Network’s cryptoeconomic mechanisms, such as PoLC, LiBA, and SGN. To participate and to earn incentives in the form of CELR, users need to stake their CELR coins. Lenders who stake more CELR coins are prioritized more to be selected for providing liquidity to off-chain service providers and hence rewarded for the same.