Dear Celer Network community,
2019 has been a fruitful year for Celer Network and we have witnessed Celer Network’s exciting growth on all fronts: user adoption, developer adoption, technology innovation, open ecosystem building, and business partnership expansion. We are also excited to see that many great talents have chosen to join Celer and as a result, we doubled our team size in 2019. In this post, through our own experiences during the exciting journey in 2019, we reflect on the key challenges that the entire blockchain industry faced and talk about our approaches as well as our decisions and rationale behind them. We believe this reflection will guide us into an even more exciting 2020.
Finding the right market niche for adoption
Needless to say, the entire blockchain ecosystem’s future growth is critically dependent on mass adoption. We believe with the ground-breaking technology evolution led by smart contract platforms and scaling infrastructures like Ethereum and Celer Network, blockchain technology is ready for mass adoption in certain well-selected market niches. There is also a sense of urgency: the entire industry desperately needs a validation point to prove that blockchain technology can bring tangible business value to the every-day consumers. And we firmly believe that this adoption growth will drive the next wave of blockchain advancements on all fronts including attracting capital, awareness and culture.
We took this challenge head-on, overcame so many different obstacles and achieved great early success with our product and adoption strategy.
In the beginning of 2019, we asked ourselves: what market niche could blockchain technology thrive by providing crucial differentiating benefits and generating sustainable business value; and how can we remove the hurdle for users to seamlessly engage with this technology, while naturally addressing public adoption.
Our answer to that question is CelerX, a skill-based real money eSport gaming platform based on Celer Network’s layer-2 scalability technology. We launched CelerX as the world’s first eSports mobile application where users can compete and win cryptocurrencies, like Ethereum, DAI and CELR as prizes.
We see this vertical as a perfect niche for blockchain adoption for the following reasons:
- It is a nascent market itself, even without blockchain,and growing 50X year-by-year.
- It has a clear monetization model and path to sustainable revenue flow.
- The surrounding ecosystem is receptive to the cryptocurrency and blockchain community
- The cost of trust for using traditional financial solutions is extremely high;therefore, Celer Network and more generally blockchain technology, provide strong differentiating advantages.
- Celer Network technology can play a crucial role in bridging the user experience gap, if we want to remove the trust cost of the application.
- Can sustainably grow developer adoption for Celer Network
We will have a separate article talking about our methodology and how this market niche fits perfectly into this methodology. Here in this review, we want to share some great statistics showing that this strategy has paid off marvelously. In a very short period after our launch, we have seen players spend $2M in the application while reaching more than 60K monthly active users with close to 1 MILLION matches played around 88 different countries in the world! The traction numbers are growing by more than 10% every week consistently.
What’s most exciting to us is that we are attracting users outside of the extremely small blockchain user base. In fact, most of our users have never heard of blockchain before they used CelerX and we have paved the way for them to seamlessly onboard to the layer-2 blockchain world by allowing users to directly purchase cryptocurrencies by partnering with our fiat partners.
The most exciting thing is that with Celer Network’s trust-free layer-2 scalability technology in place, there is no user friction like gas fee or transaction delays that stop most of the everyday users to access blockchain applications today.
However, this success did not come easily. We spent more than six months working with existing mobile app distribution channels like Apple with hundreds of emails and tens of calls exchanged. Even though this process was quite challenging, we never gave up as we continue to hold the belief that the existing application ecosystem should not become the blockchain ecosystem’s enemy. Only by working closely with existing ecosystem stakeholders with deepest sincerity, complete honesty and full transparency, we can bring blockchain technology to mass adoption. As we continue to see sustainable user growth in CelerX, we are confident that it will set the standard for the entire industry of user adoption for many years to come.
Bootstrap developer adoption with a sustainable monetization model
The blockchain developer ecosystem is not easy to build. We have always envisioned that the blockchain developer ecosystem should flourish as much as, if not much more than, traditional application ecosystems like Apple’s and Google’s.
However, except for a few ecosystems like Ethereum, many layer-1 blockchains attempt to build developer ecosystems through heavy investments to expand their ecosystem, but are failing to generate high retention and self-sustaining model.
We believe the reason is quite simple: after the initial stage of subsidization and bootstrapping, high-cost developers and companies on most blockchain ecosystems cannot sustainably generate revenue and therefore have to move to the next round of funding through other blockchain ecosystems or forced to leave the blockchain ecosystem altogether.
We believe the only way to create a highly sustainable blockchain ecosystem is to distill this unfamiliar and somewhat hard-to-use technology to an easy-to-integrate monetization tool for developers to use.
Therefore, we as platform developers, not only need to build the foundation of blockchain technology, but also need to provide business models for our ecosystem developers to achieve sustainable revenue stream; and as a result, retain and grow the entire developer ecosystem in a truly sustainable way.
In addition, we also need to target our developer toolings and monetization solutions well beyond the close circle of “blockchain developers” and reach to the broader audience of general developers who are interested in monetization within specific niches. In order to achieve this, these monetization solutions should abstract away from all the complexities of blockchain, while presenting to developers familiar integration processes.
CelerX Gaming SDK
In 2019, we presented our first solution to this developer adoption challenge: CelerX Gaming SDK. CelerX Gaming SDK targets a general gaming developer base with zero requirements of blockchain knowledge. By integrating with literally two lines of code, developers can immediately start to monetize their gaming content through CelerX mobile gaming platform or as an individual mobile application.
We have seen great early successes. With hundreds of games submitted, we have launched 17 high quality, hyper-casual games on our CelerX mobile gaming platform. None of our gaming studio partners understand blockchain technology, but can still easily use the integration toolings in their familiar development frameworks like Cocos, Ergetia and, coming soon, Unity. For our gaming studios partners, they have seen on average 4X higher ARPDAU compared to traditional monetization methods such as advertisements for the same games. All of our partnering gaming studios are committed to continuing integrating new and exciting games in 2020 to CelerX for one simple reason:
CelerX Gaming SDK can enable new, attractive and easy revenue flow without limiting any existing monetization methods.
Though we are very glad to confirm the monetization success within the gaming sector, we clearly understand that eSports gaming is only one of many business use cases that can be built with Celer with a clear monetization loop for the developers. There are a galaxy of business models that can be built by using Celer Network technology and Celer Web SDK that was released in 2019 that completely removes the user usage barrier. Here’s a list of a few business use cases using Celer’s technology:
- Usage-based car insurance
- Peer-to-peer electricity metering and payment system
- Micro auction and instant payout for advertisement publisher
- Peer-to-peer VPN services with instant payment
- P2P Wifi and data connection sharing
- Live streaming with instant tipping from a global audience
- Usage-based content sharing
- Merchant and PoS system with an extremely low transaction fee
As we strengthen our position with our first monetization model, we will continue to build frameworks and developer tools to better serve other monetization models based on the feedback we receive from our developer community. With this methodology, we aim to build towards a sustainable developer ecosystem future that can be long-lasting and ever-green.
Leading Blockchain Layer-2 Technology Innovations
In 2019, we continued to lead the frontier of innovation in blockchain layer-2 scaling technology and brought many of the world’s firsts.
Launched Cygnus Alpha Mainnet
After launching our second testnet Sirius and making rapid progress on security audit and product preparation, we launched Celer Network’s alpha mainnet, Cygnus. This marked the first time in history that the world’s first generalized state channel network went live. In this first version of the mainnet, we brought many breakthrough technical features and also developer SDK to integrate with Celer Network. This mainnet launch not only marks a breakthrough in blockchain technology but also established a solid foundation for all Celer Network’s user adoption and developer adoption achievements.
Open-sourced Protocol Specification
Shortly after we launched the mainnet, we published the extremely detailed open source specification for the entire blockchain community to learn about Celer State Channel Network Protocol. This is the world’s first and only detailed state channel network specification.
Launched open-source web3 light client
Though the Celer Network core system has been written in Go for high performance, security and system stability, we continue to push the adoption with our web3 compatible state channel light client release. Celer Network light client implements the core pieces of our open-source protocol specification and can integrate seamlessly with web3 providers like Metamask, Trust Wallet, imToken and more. This removes the needs for Celer Network developers to run a local node and can build purely web-based dApps with the powerful layer-2 scalability built-in.
Capturing the adoption value through cEconomy
Towards the end of 2019, we started the long-anticipated cEconomy step-by-step rollout process, starting from the Liquidity Backing Auction and Liquidity Commitment Mining process. For the first stage of the launch, we have seen more than 200 users participate in the liquidity backing auction testing and we aim to launch the next stage of State Guardian Network early in 2020. When the State Guardian Network goes online, we will bootstrap our staking ecosystem and open brand new doors to layer-2 scalability and security that are applicable in a wide range of layer-2 scaling platforms. The staking economy will be able to quickly capture the value created by user adoption and developer adoption.
Expanding business and ecosystem partners
In 2019, Celer Network continued to expand business and ecosystem partners.
One major milestone we achieved is that we launched on Binance Launchpad program and later got successfully listed on the Binance Exchange. We are also glad to be listed on the third largest South Korea exchange Coinone, one of the biggest exchanges in Asia, Gate.io and one of the biggest exchanges in India that were recently acquired by Binance, WazirX. As of now, CELR token is listed on 12 exchanges around the globe.
Libra was one of the hottest topics of the year. Even though facing a variety of regulatory uncertainty, it drew the world’s attention to the blockchain technology space. As a layer-1 blockchain, Libra also needs layer-2 scaling as its whitepaper clearly describes the need for layer-2 technology and state channel technology specifically. As the world’s leading team working on layer-2 technology, Celer Network’s cofounder Mo Dong was invited to give a talk to Facebook Libra team about Celer Network technology. We closely follow Libra’s progress and are capable of supporting Libra as a layer-2 layer once the obstacles to the technology launch are all cleared.
Interoperability is a big theme in layer-2. Celer Network as a blockchain agnostic layer-2 platform continued to expand our support for many widely adopted or uprising public blockchains in 2019. By becoming the default layer-2 solution for many different layer-1 blockchains, Celer Network is able to benefit from all the uprising public blockchain ecosystems’ expansion and at the same time provide business and use cases by giving the developer the crucial capability to remove the slowness and expensiveness of blockchain for general audiences. In 2019, our blockchain partners have expanded greatly to include NEO, Conflux, GXChain, Cocos-BCX and BYTOM. Widely recognized in the community, our cofounder Dr. Mo Dong partnered with Binance Labs as a mentor for its incubation program. Later in June, Dr. Mo Dong joins Hashed Labs as a blockchain gaming incubation program mentor.
On the application side, we continue to grow our decentralized applications and technology partners outside of the gaming sector. To name a few, we have partnered with Chainlink, Matic, Trust Wallet, Wyre, MakerDAO, MixMarvel and Troy to address different use cases ranging from layer-2 Oracle, complementary off-chain scaling solutions integration, frictionless fiat onramp, gaming tooling and decentralized finance infrastructures.
In addition, we participated in 500 startups while completing a Proof of Concept for a micropayment use case for a major U.S. car manufacturer. Through this partnership, we also joined MOBI (Mobility Open Blockchain Initiative) as an early member with globally automakers like BMW, Ford, and General Motors. This allows us to get early access to enterprise markets with huge future potentials.
Building a strong community
The power of blockchain technology largely lies in the power of community. In 2019, we continued to build a broader blockchain community through technology standardization consortium, high quality community events, hackathon and partnership with accelerator programs.
In the Ethereum community, we partnered with other leading layer-2 developers and launched statechannel.org as a soft standardization body. We are working towards a single specification, laying the foundation for a fully interoperable ecosystem of State Channels applications. Our goal is to enable the best possible user and developer experience for State Channels. To edvocate state channels to the public, we gave a high level overview of state channels and covered how developers can use state channels in their applications.
We were also invited as speakers to present our open source state channel protocol, our view on gaming and by a series of academic conferences, hackathons and blockchain community events like Devcon V, ETHDenver, New York blockchain week, ETH New York, Game Osis Hackathon with Binance, Pentera Summit, SF Blockchain Week, ETH Waterloo, CESC, Web3 Summit, Edcon. We truly felt the enthusiasm from users and developers.
We also started our community expansion to Korea: Our cofounder Dr. Mo Dong and Dr. Qingkai Liang gave talks about Celer Network’s key technology differentiators and how it can help Korea blockchain technology community at Key Platform and BUIDL 2019.
There are also a long list of community events that we attended, just to give a quick summary of the major ones:
- November 8, 2019: At the World Blockchain Conference, Wuzhen, Celer China COO Chao Qi were invited to share his insights on developing the dApp ecosystem.
- November 8–10, 2019: ETHWaterloo, ETHGlobal’s Premiere hackathon of 2019. Dr. Junda Liu, our co-founder shared how Celer can help developers to monetize their casual games into blockchain eSports games
- October 28 — November 3, 2019: At San Francisco Blockchain Week, we prepared many fun activities to engage with users and players and received valuable feedback. Dr. Mo Dong shared his insights about scaling solutions on the panel Scaling 2020: Layer 1 vs. Layer 2.
- October 28–29, 2019: At CESC, Dr. Mo Dong presented our state channel network design principles and how we can bring mass adoption.
- October 8, 2019: State Channels Summit in Osaka, Japan.
- October 7, 2019: Osaka Ethereum Lighting Talks.
- October 1–2, 2019, The Pocket Gamer Connects, Helsinki Finland. Our VP of Marketing gave a talk about “Innovation in Mobile Gaming Leveraging Blockchain Technology”.
- September 16–18, 2019: Shanghai Blockchain Week
- September 6–8, 2019: ETHBoston hackathon in Boston, MA
- August 24, 2019: Bytom DevCon 2 in San Francisco, CA
- August 24–25, 2019: ETHPlanet Ethereum Hackathon in Shenzhen
- August 21–23, 2019: DAPPCON — Developer Conference for Ethereum Dapps & Infrastructure in Germany: Our co-founder Dr. Qingkai Liang presented at DAPPCON Berlin during Berlin Blockchain Week and discussed our recent mainnet releases.
- August 19–21, 2019: Web3 Summit in Berlin Germany: Our cofounder Qingkai Liang shared with the community at Web3 Summit the exploding adoption on CelerX users, developers and partners after Celer Network’s alpha mainnet launch.
- July 22–23, 2019: BUIDL Asia 2019 in Seoul, Korea
- July 2019, Global Blockchain Ecosystem Conference in the China Joy gaming week
- July 20, 2019: 4th Industrial Revolution Hackathon Binance Arena, Beijing
- July 19, 2019: BuildETH, San Francisco. Our co-founder Dr. Mo Dong participated in the roundtable discussion
- July 19–21, 2019: State of Scale Hackathon, Los Angeles. Our co-founder Mo attended the State of Scale hackathon as a mentor together with other leading projects and organizations.
- June 18, 2019: The Blockchain Scalability Panel in Shanghai
- June 15, 2019: PoS CEO Summit in Palo Alto, CA
- June 5–7, 2019: Scaling Ethereum Workshop, Toronto. Our co-founder Dr. Xiaozhou Li shared the experience of running a state channel network on Ethereum and explained off-chain conditional payment in detail.
- May 17–19, 2019: Celer Network at ETHNewYork, State Channel Research Discussions, and The Future of Layer2 Meetup
- May 1, 2019: Ethereum Seoul Meetup
- April 17, 2019: MOBI Panel, Shanghai. Mo discussed how blockchain technology would help to connect virtual and real world together
- April 8–14, 2019: Edcon, Sydney, Australia: Build and Operate Internet-Scale dApps on Celer Network
- April 6, 2019: IEEE Industry Summit on Future Technology For Smart Cities, San Francisco East Bay, California, USA
- March 13–14, 2019: Token2049 in HongKong: Dr. Qingkai Liang, co-founder of Celer Network, presented at the scalability panel at the Token2049
- March 5–7, 2019: EthCC hackathon in Paris, France
- February 16–17, 2019: NEO DevCon in Seattle, WA: Dr. Junda Liu, the co-founder of Celer Network, gave a presentation on Celer Network technology.
In 2020, to improve and build a more lively and active community, we are committed to continuing investing and enhancing our community building process through various channels including social media, offline events and sharing more frequently and timely news about our exciting progress.
2019 was a growth year for Celer Network. In the uncharted blockchain world, we grew by achieving breakthrough research and employing innovative technology. We also established a strong position in the gaming vertical with a clear monetization model that enables sustainable developer growth strategy for mass adoption, while establishing an interoperable ecosystem for the future. In 2020, we hope to see increasingly faster growth and positive return from the seeds we planted in 2019.
Celer Network Team