Celo Foundation Proposes Token Economic Model Reforms for CELO

Celo Foundation has announced that the Celo community convened its second token economics meeting on January 8, 2026, to discuss enhancing CELO's economic design to better reflect and promote real momentum and adoption on the network. According to Foresight News, the community proposed initiating broader token economic model reforms, starting with a programmatic CELO buyback and burn policy linked to profits, allocating at least 50% of profits for buybacks to directly tie CELO to network activity. Under this plan, protocol revenues will first cover essential on-chain and operational costs, including data availability, Optimism revenue sharing, key infrastructure, operations, engineering, and security costs, before being used for CELO buybacks. To ensure these buybacks result in lasting value accumulation, most of the repurchased CELO will be permanently destroyed, with a strict default measure for the capped portion, while the remainder can be deposited into a time-limited growth treasury to build structured, transparent ecosystem incentive mechanisms rather than immediate recirculation. To further support network activity growth and drive on-chain revenue, the community suggested pilot reward mechanisms, including ProsperOn and an expanded Proof-of-Ship season. ProsperOn involves converting gas fees into non-transferable usage points, supporting these points with stablecoin reserve earnings, and allowing earnings to be used for users, builders, or public goods without causing sell pressure. In 2025, Proof of Ship included 576 projects that maintained a 29% user retention rate over two or more quarters, serving as a valuable developer engagement tool.