We have introduced a protocol for social payments, called Celo. Celo combines an address-based encryption protocol that allows a sender to use a phone number or email address directly as a public key, with a reserve-backed stabilization protocol to minimize volatility through an elastic supply rule. Together, these allow for a more seamless experience using cryptocurrencies as a means of payment. Further, they enable a monetary ecology that includes local and regional currencies, social dividends, demurrage-charged currencies, and in the future, natural-capital-backed currencies.

The Celo protocol defines a decentralized payments system in which participants use coins that track the value of a local fiat currency or a local basket of goods. In this paper, we investigate the stability characteristics of Celo stable value assets through a series of simulations under various market conditions.