What is Celer Network (CELR) and how does it work? Understanding its functionality

Discover what Celer Network (CELR) is, how it works, and its unique features. Learn about its role in enhancing blockchain scalability and performance.

May 24, 2024 - 16:07
May 25, 2024 - 12:10
What is Celer Network (CELR) and how does it work? Understanding its functionality
Celer Network (CELR)

What is Celer Network (CELR)?

Celer Network is a layer-2 scaling platform that facilitates the deployment of decentralized applications across various blockchains, enabling interoperability and network incentives within the ecosystem.

Operating as smart contracts on top of blockchains like Ethereum and Polkadot, Celer Network is at the forefront of layer-2 scaling research and application development. The team behind Celer has launched the first blockchain-based esports platform, CelerX, as well as the first mobile SDK for layer-2 scaling.

Celer aims to ensure smooth operations for smart contracts, fast off-chain transactions, and a secure environment for dApps on any blockchain platform. The project supports developers in scaling their dApps through layer-2 protocols, offering tools and solutions to address major issues faced by smart contract platforms. Celer Network thus plays a crucial role in scaling and securing leading smart contract platforms like Ethereum.

How does Celer Network work?

Celer Network is a layer-2 protocol designed to enhance scalability and security for blockchain platforms by enabling off-chain transactions. This protocol supports both platform users and dApp developers. By addressing the challenges of scaling and interoperability, Celer Network offers a crucial solution to two of the most significant issues faced by many blockchain-based networks.

Layer-2 protocols offer a compelling solution for scalability by operating as smart contracts on top of blockchains like Ethereum, without requiring changes to the underlying base protocol. These protocols, such as the Celer Network, utilize technologies like Side Chain technology and the Generalized State Channel Network (GSCN) to enable off-chain interactions and interoperability. The GSCN, akin to the Lightning Network for Bitcoin, facilitates fast and cost-effective off-chain operations for blockchains like Ethereum, supporting the scalability of decentralized applications (dApps).

Who founded Celer Network? (Celer Network history)

Established in 2018 by Mo Dong, Junda Liu, Xiaozhou Li, and Qingkai Liang, Celer Network launched its alpha mainnet, Cygnus, in July 2019, introducing the world's first Generalized State Channel Network.

The founders of Celer Network hold PhDs from prestigious institutions such as Princeton, MIT, UC Berkeley, and UIUC, and have a background in building enterprise software, including projects like Google Fi, Veriflow, Intel DPDK, and B4.

What sets Celer Network apart?

While there are other layer-2 scaling platforms, Celer Network distinguishes itself in several ways.

Celer Network is notable for its support across multiple blockchain platforms and environments. For instance, it operates efficiently on platforms as distinct as DFINITY’s Internet Computer and Ethereum. Additionally, Celer Network supports off-chain smart contract operations and payments, leveraging an optimal state routing algorithm that delivers 15 times higher throughput than other state-of-the-art solutions.

Celer Network is recognized as the first and only solution of its kind to offer dispute resolution, connectivity, state availability, and excess liquidity for off-chain operations.

What is the value proposition of Celer Network?

The value of Celer Network is reflected in the market price of its token, CELR, but this price may not always align with the intrinsic value of the network's technology. Intrinsic value is determined by factors such as technical capabilities, technology, use cases, features, and the adoption rate of CELR coins.

Celer Network serves as an off-chain scaling solution for transactions and smart contract operations, compatible with various blockchain environments without necessitating modifications to their base protocols. It addresses critical challenges in blockchain, particularly scalability and interoperability, offering significant value and establishing itself as a noteworthy project.

How many CELR coins are currently in circulation within the Celer Network?

Celer Network has a fixed total supply of 10 billion CELR tokens. Once all tokens from this total supply are in circulation, no additional coins will be minted. This scarcity serves as an anti-inflation measure and could position CELR as a reliable store of value over time.

The market capitalization of CELR is calculated by multiplying the number of tokens in circulation by the current market price. This metric not only ranks the cryptocurrency among its peers but also determines its market share.

Other technical data

Celer Network is interoperable with various blockchain platforms like Polkadot, Ethereum, NEO, Mobi, and others, offering scaling solutions to these networks.

Through the CelerX mobile app, users can send and receive payments, conduct rapid transactions, and access and play interactive blockchain games. Additionally, Celer's SDKs enable developers to create and launch scalable decentralized applications (dApps) at reduced costs, ensuring compatibility with multiple blockchain environments.

How is the Celer Network secured?

Celer Network utilizes the Delegated Proof of Stake (DPoS) protocol to secure both its off-chain and on-chain operations. DPoS involves a system of voting and staking, rewarding stakeholders who help secure the network by staking the native token, CELR.

DPoS is considered one of the most secure and cost-effective solutions among blockchain-based protocols. This approach enables Celer Network to provide high-level security for developers and network users.

How to use Celer Network?

Celer Network serves as a platform for off-chain scaling techniques, enabling cost-effective and rapid development of decentralized applications (dApps), including blockchain-based games, and facilitating liquidity. As an interoperability and scaling framework, Celer Network operates on top of various blockchain environments, notably Ethereum, addressing the scalability challenges inherent in most smart contract blockchain networks.

The native token of Celer Network, CELR, is an ERC-20 token and serves as the network's native currency. CELR can be utilized for payments within the network, in the CelerX mobile app, and can be staked in Liquidity Backing Auctions (LiBAs). LiBAs allow users to crowd-lend liquidity to off-chain service providers, with lenders earning interest and increasing their chances of providing liquidity by staking more CELR.

Additionally, CELR can be staked to participate in the State Guardian Network (SGN), which is a compact sidechain that safeguards states when users are offline. Guardians in the SGN earn opportunities for guarding and service fees by staking their CELR.

How can one select a wallet for Celer Network?

CELR, being an ERC-20 token, can be stored in any wallet that supports Ethereum. The choice of wallet depends on your usage needs and the amount of CELR you intend to store.

For maximum security, hardware wallets (cold wallets) like Ledger or Trezor are recommended. These wallets offer offline storage and backup, ensuring the safety of your cryptocurrencies. However, they may require more technical expertise and are relatively costly, making them more suitable for storing larger amounts of CELR and for experienced users.

Software wallets provide a more accessible option, as they are free and easy to use. They come in the form of smartphone or desktop apps and can be custodial or non-custodial. Custodial wallets manage and back up your private keys on your behalf, while non-custodial wallets use secure elements on your device for key storage. Although convenient, software wallets are considered less secure than hardware wallets and are better suited for smaller amounts of CELR or for users new to cryptocurrency.

Online wallets, or web wallets, are another option for storing CELR. They are free, easy to use, and accessible from multiple devices through a web browser. However, they are considered hot wallets and may not be as secure as hardware or software wallets. Since you are entrusting the platform with your CELR, it's important to choose a reputable service with a strong security and custody track record. Online wallets are best suited for holding smaller amounts of cryptocurrencies or for frequent traders.

Celer Network proof of stake

Celer Network utilizes a variant of the Proof of Stake protocol called delegated Proof of Stake (DPoS), known for its cost-effectiveness and efficiency in transaction speed and scaling.

DPoS is resource-efficient and energy-saving, making it more environmentally friendly and economical compared to protocols like Proof of Work. This efficiency is key to the fast, reliable, secure, and cost-effective scaling and use of dApps via Celer Network.

In conclusion, Celer Network addresses scalability and interoperability issues common to many blockchain networks that operate with smart contracts and dApps. The platform offers a range of products focused on delivering a seamless user experience for developers and dApp users. Powered by a layer-2 architecture, Celer Network aims to drive mass adoption of blockchains by optimizing the speed, performance, and interoperability of dApps, smart contracts, and off-chain operations.

Embark on your Celer Network journey today and join the crypto revolution.

What's Your Reaction?