Celo Blockchain Reunites with Ethereum: Embracing L2 for Seamless Integration

CLabs, the organization behind the development of the Celo blockchain, has announced plans to return to the Ethereum ecosystem. The proposed transition involves shifting from being an independent layer-1 blockchain compatible with the Ethereum Virtual Machine (EVM) to becoming an Ethereum layer-2 solution.

The proposal, currently under discussion on Celo’s governance forum, outlines the utilization of OP Stack as the underlying architecture for the transition. By embracing Ethereum’s layer-2 framework, Celo aims to enhance compatibility with the Ethereum ecosystem, allowing Celo developers to easily leverage a wide range of Ethereum tooling and libraries.

Key aspects of the transition include the introduction of an off-chain data availability layer, operated by Ethereum node operators and secured by restaked Ether (ETH). Moreover, the existing validators on the Celo network would be transformed into decentralized sequencers for the layer-2 solution.

Layer-1 and Layer-2 blockchains serve different purposes and exhibit varying design and architectural features. While layer-1 networks operate independently, layer-2 solutions aim to augment the performance of layer-1 blockchains.

The transition to a layer-2 solution offers several advantages, including increased security and the ability to maintain low gas fees. The proposal suggests that gas costs can be significantly lower compared to other layer-2 solutions due to the off-chain data availability feature. The proposal will be discussed in a governance call on July 21 and subsequently undergo a “temperature check” on the following day.

The proposed transition is expected to have minimal impact on end-users and CELO tokenholders. Users will experience a seamless migration, while tokenholders will retain control over core contracts through voting on governance proposals. Additionally, CELO tokens will continue to be used for gas payments.

While the transition appears to be primarily a technical shift, it may have broader implications for the Celo ecosystem. The integration could facilitate increased liquidity flow between Celo and other chains. However, it could also introduce additional costs for sequencers, such as fees on the data availability layer and gas on Ethereum. The impact on sequencers’ rewards compared to current validators’ rewards remains uncertain.

Celo has been actively working on improving its mobile experience and introducing new features to cater to the needs of users, particularly in developing economies where payment solutions are in high demand. With the competitive landscape of blockchains continuously evolving, Celo’s decision to rejoin the Ethereum ecosystem and embrace layer-2 technology demonstrates its commitment to staying at the forefront of innovation.

For more news, find me on Twitter or subscribe to my YouTube channel.

What is your opinion on this issue? Leave me your comment below! I’m always interested in your opinion!

Leave a Reply

Your email address will not be published. Required fields are marked *

Recommended for you