Cena Celo Dollar

The Celo protocol, at base, has two assets: Celo Dollar, an elastic-supply stable value asset1, and CELO, a fixed-supply variable value asset. CELO is elementary to the stability mechanism: It is held in a reserve smart contract and exchanged for Celo Dollars to balance demand excess or shortage. In addition to CELO, a diversified basket of non-Celo crypto-assets comprises the Celo reserve. This reserve is periodically rebalanced towards the target asset allocation set via on-chain governance. The Celo stability mechanism can thus be understood as a hybrid crypto-collateralization / seigniorage-style model. To balance Celo Dollar demand excess or shortage, the protocol sets incentives for users to adjust Celo Dollar supply to match Celo Dollar demand at the price target. At a high level, the Celo expansion and contraction mechanism allows users to create new Celo Dollars by sending one US Dollar worth of CELO to the reserve, or to burn Celo Dollars by redeeming them for oneUS Dollar worth of CELO.