CLabs, the organization behind the development of the Celo blockchain, has announced its plan to return to the Ethereum ecosystem. In a proposal discussion on Celo’s governance forum, the organization revealed its intention to transition from an independent layer-1 blockchain to an Ethereum layer-2 solution.
The proposed transition would involve leveraging OP Stack as the architecture for Celo to become an Ethereum L2 blockchain. This move would eliminate the need to monitor tooling and libraries composability through upgrades, making it easier for Celo developers to utilize the full range of Ethereum tooling and libraries.
One of the key differences between layer-1 and layer-2 blockchains lies in their purpose, design, and architecture. While layer-1 networks are self-sufficient, layer-2 solutions aim to enhance the performance of layer-1 blockchains rather than operate independently.
As part of the transition, an off-chain data availability layer would be introduced, operated by Ethereum node operators and protected by restaked Ether (ETH). Furthermore, the current validators would be transformed into decentralized sequencers for L2.
The proposed transition is expected to offer several benefits, including increased security while maintaining low gas fees. The proposal states that gas costs can be significantly lower than other L2 solutions due to the off-chain data availability offered by the Ethereum L2 solution. The proposal is scheduled for discussion during a governance call on July 21, followed by a “temperature check” on the following day.
End-users are not expected to be affected by the migration, and CELO token holders will retain control over core contracts through voting on governance proposals. Additionally, CELO tokens will be used to pay for gas.
However, the transition may have various implications for the Celo ecosystem. It could potentially enable more liquidity flow between Celo and other chains, but it may also lead to extra costs for sequencers, such as fees on the data availability layer and gas on Ethereum. Additionally, the impact on sequencers’ rewards compared to current validators’ rewards remains unclear.
Celo has been focusing on improving its mobile experience to cater to the growing demand for technological payment solutions in developing economies. The blockchain platform has been incorporating increased functionality and specific features to enhance its mobile experience.
With the competition among blockchains intensifying, Celo’s decision to transition to an Ethereum layer-2 solution demonstrates its commitment to enhancing its performance and expanding its reach. The proposal discussion and subsequent implementation will shape the future of Celo within the Ethereum ecosystem.
In conclusion, CLabs is seeking to transition Celo from an independent EVM-compatible layer-1 blockchain to an Ethereum layer-2 solution. The proposed transition aims to improve Celo’s performance and unlock the full potential of Ethereum tooling and libraries for developers. The migration is expected to bring increased security and lower gas fees for users while allowing CELO token holders to maintain control over governance decisions. However, there are potential implications for the Celo ecosystem, including liquidity flow and costs for sequencers. Celo’s focus on enhancing mobile experience aligns with its goal of providing technological payment solutions in developing economies. The transition marks Celo’s commitment to staying competitive and further engaging with the Ethereum ecosystem.