Celer Network and CELR Explained
The Celer Network made its debut in March 2019 through its Initial Exchange Offering (IEO) on the Binance Launchpad, and has since grown exponentially. The project offers a Layer 2 scaling platform to make dApps faster, more secure, and run at lower costs on blockchains such as Ethereum, Polkadot, and Binance Smart Chain (BSC), with plans to include additional chains soon. Celer Network was founded by entrepreneurs with PhDs from prestigious universities such as MIT, Princeton, UC Berkeley, and UIUC plus experience gained working at tech giants like Google, Cisco, Oracle, Amazon, and more.
Applications and middlewares currently running on Celer have already helped attract a large user base across the DeFi, blockchain, and GameFi space.
How Celer works
Generally, Layer 2 solutions process smaller transactions off-chain and then bundle them into one single transaction that is recognized on-chain. This is what Celer Network does for the blockchains it currently supports, with an ecosystem of three main components: Celer State Channel, Layer-2 Rollup, and Celer State Guardian Network.
Celer State Channel offers instant transaction settlement and frictionless bridging of multi-chain and multi-layer assets. The stack includes cOS (development framework and runtime for State Channel enabled applications), cRoute (value routing across a decentralized network of multiple chains and layers), and cChannel (fast state and value transfers).
Celer Rollup improves the capabilities of the underlying Layer 1 blockchain by acting as a separate and faster chain, yet it is still connected to the Layer 1 to build on its security power. The Layer 2 rollup chain carries out transactions and stores data of its own; however, chain state data is continuously streamed to the Layer 1 chain. This means that whenever necessary, the Layer 1 can be used to verify if the data on the Layer 2 blockchain is valid and to detect any malicious attempts.
Finally, the Celer State Guardian Network is a decentralized and general-purpose watch tower layer to support optimal user experience and added security for both State Channel and Rollup components.
Applications running on the Celer Network include Layer2. Finance, which allows people to access all existing DeFi protocols at a fraction of the cost by acting like a “DeFi Public Transportation System”, and cBridge, a multi-chain network that enables instant, low-cost and ANY-to-ANY value transfers within and across multiple Layer 1 and Layer 2 blockchains.
The CELR token
The native token of the network is the CELR utility token required to participate in the State Guardian Network and to pay service and transaction fees to off-chain providers. While it has traded in a fairly narrow band during the first 2 years after it hit the markets, CELR finally took off in early 2021, gaining 11,815% at $0.12 up from its all-time low in March 2020.
As a utility token, you can stake CELR in the State Guardian Network to become a State Guardian and perform services like state monitoring, resolving disputes, and maintaining the security and efficiency of the Celer Network. For providing these services, State Guardians receive service fees and side-chain block rewards.
CELR also serves as an incentive for helping maintain the liquidity pool in what is referred to as The Proof of Liquidity Commitment process. Finally, another utility for the token is the Liquidity Backing Auctions which increase the priority of liquidity backing bids and therefore statistically increase the liquidity interests’ payout.
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