What is CELO?
CELO is the native asset of the Celo protocol- an open platform that makes financial tools accessible to anyone with a mobile phone and issues native stable-value tokens (Celo Dollar & Celo Euro). Stable value tokens are a type of cryptocurrency whose price tracks an external currency or commodity. CELO’s primary function is stabilization, ensuring the healthy velocity of assets that globally circulate and transact on Celo. CELO also serves as the key governance mechanism for the Celo Platform. Owning and using CELO supports the growth and development of the Celo platform by enabling each CELO owner to vote on proposals that direct how the core technology operates today and in the future.
To address stability of value, the Celo protocol introduces an asset whose value is stabilized using a monetary policy with elastic supply rules, backed by a variable-value reserve known as the Celo Reserve. Further, it introduces a governance structure that allows the protocol to create a family of local, regional, and utility stablevalue currencies. The introduction of new successful stable-value coins to the family strengthens the stability characteristics of the existing coins. The Celo Reserve supports the Celo Platform and helps to ensure the value of stabilized assets that circulate on the network. The Celo Reserve supports the stability of stabilized value assets by hosting a diversified portfolio of cryptocurrencies supporting the ability of the Celo protocol to expand and contract the supply of Celo stable assets, in line with user demand. The Celo Reserve is composed of cryptocurrencies including CELO, BTC, ETH, and DAI–ensuring that all user transactions with the reserve can happen on-chain, in a decentralized manner, in fully auditable ways.
CELO is associated with different entities such as the Celo Foundation and The Alliance for prosperity that engage in many humanitarian efforts aimed at tackling financial inclusion and poverty. The Alliance was created to grow both global and local ecosystems in service of creating the conditions for prosperous communities by creating low-cost and high-speed payments. To encourage member collaboration and address real-world challenges, the Alliance has created two new working groups: a global remittances committee and regulation and compliance committee.
On the technical side, Celo launched its mainnet in April 2020, and all Celo assets including the CELO token are ERC-20 compliant. Though CELO assets are not ERC-20 tokens on the Ethereum Mainnet, they are Ethereum Virtual Machine (EVM) compatible, meaning all familiar tooling and code that support ERC-20 tokens can be adapted for Celo assets.
The total fixed supply of CELO is fixed at 600 million tokens. CELO’s contract will not allow burning capability, so the supply will not decrease.
Before trading any crypto assets it is important to understand the risks. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.
No securities regulatory authority or regulator in Canada has evaluated or endorsed the Crypto Contracts or any of the crypto assets made available through the platform.
Wealthsimple has performed an assessment of whether CELO can be supported by Wealthsimple’s platform, including whether CELO is a security and/or a derivative and is being offered in compliance with securities and derivatives laws.
We evaluated CELO based on publicly available information, including (but not limited to):
- The creation, governance, usage and design of CELO, including the source code, security and roadmap for growth in the developer community and, if applicable, the background of the developer(s) that first created CELO;
- The supply, demand, maturity, utility and liquidity of CELO;
- Material technical risks associated with CELO, including any code defects, security breaches and other threats concerning CELO and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them;
- Legal and regulatory risks associated with CELO, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of CELO; and
- Statements made by regulators or securities regulatory authorities in Canada and other jurisdictions regarding whether CELO, or generally about whether the type of crypto asset, is a security and/or a derivative.
Wealthsimple monitors ongoing developments related to crypto assets available on its platform for significant changes that may affect Wealthsimple’s original assessment of those assets, including Wealthsimple’s assessment of the application of securities and derivatives laws. Any significant changes relating to CELO may result in changes to this Crypto Asset Statement and/or Wealthsimple’s ability to support CELO.
Like all other crypto assets, there are some general risks to investing in CELO. These include short history risk, volatility risk, liquidity risk, demand risk, forking risk, cryptography risk, regulatory risk, concentration risk, electronic trading risk and cyber security risk. Please review the Wealthsimple Crypto Product Risk Disclosure for additional discussion of general risks associated with the crypto assets made available through the platform.
We emphasize that this Crypto Asset Statement is not exhaustive of all risks associated with trading CELO. Investors should perform their own assessment to determine the appropriate level of risk for their personal circumstances.
Wealthsimple is offering Crypto Contracts in reliance on a prospectus exemption contained in the exemptive relief decision Re Wealthsimple Investments Inc. dated December 18, 2023 (the Decision).
The statutory rights of action for damages and rescission in section 130.1 of the Securities Act (Ontario), and, if applicable, similar statutory rights under securities legislation of other jurisdictions of Canada, do not apply in respect of this Crypto Asset Statement to the extent a Crypto Contract is distributed under the prospectus relief in the Decision.
Last updated: January 1, 2024