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Celo blockchain suggests a shift back to the Ethereum ecosystem and adoption of Layer 2 solutions

Celo blockchain suggests a shift back to the Ethereum ecosystem and adoption of Layer 2 solutions

cLabs, the organization behind the Celo blockchain, is planning to transition from an independent layer-1 blockchain to an Ethereum layer-2 solution. The transition would involve leveraging OP Stack as the architecture to become an Ethereum L2 blockchain. This move aims to make it easier for Celo developers to utilize Ethereum tooling and libraries. The transition would also include an off-chain data availability layer operated by Ethereum node operators and protected by restaked Ether. The proposal suggests that the transition would increase security while maintaining low gas fees. CELO token holders would retain control over core contracts by voting on governance proposals, and CELO tokens would be used to pay for gas. The transition may enable more liquidity flow between Celo and other chains but could also generate extra costs for sequencers. The impact on sequencers’ rewards is still unclear. Celo is focused on improving its mobile experience and targeting developing economies where payment solutions are in demand.