Celo, backed by A16z, proposes a transition to Ethereum Layer 2

cLabs, the core developer of the Celo blockchain, has unveiled a bold plan to transform its Layer 1 network into a Layer 2 solution built on Ethereum. This strategic move aims to enhance security guarantees and improve the overall functionality of the platform.

The proposal, shared on the project’s governance forum, outlines the vision for a future version of Celo based on a Layer 2 roll-up model. Under this approach, security proofs will be published to the Ethereum mainnet, leveraging Ethereum’s robust security infrastructure to provide even stronger assurances than Celo offers on its own.

To facilitate this transition, cLabs intends to utilize the OP Stack, modular tooling provided by Optimism. This will enable them to custom-build the requirements for their chain. Similar methodologies have been successfully implemented by leading cryptocurrency exchange Coinbase for their Layer 2 network, Base. As part of the Layer 2 architecture, cLabs plans to develop a decentralized sequencer using Celo’s existing validator set, ensuring multiple entities can contribute to securing the chain. Additionally, they will leverage EigenDA, a data availability layer from the re-staking project EigenLayer, to reduce storage fees for the network.

As an Ethereum Virtual Machine (EVM)-compatible blockchain, Celo garnered significant support from prominent venture firms, including a16z and Polychain Capital, with a $30 million funding round in 2019. Subsequently, the project raised another $20 million in 2021.

Currently, the Celo network hosts various Ethereum-based decentralized applications such as Uniswap and Sushiswap, along with native applications like Valora, Mento, and UbeSwap.

Importantly, the proposal highlights that migrating Celo’s EVM-compatible Layer 1 to an Ethereum Layer 2 solution will be a technical upgrade that will not disrupt the existing Celo ecosystem of applications. The transition aims to enhance security measures while maintaining compatibility and continuity for Celo users and developers.

By embracing Ethereum’s Layer 2 solutions, cLabs aims to leverage the robust security guarantees of the Ethereum mainnet while unlocking new possibilities for scalability and functionality. The proposed transition reflects cLabs’ commitment to continuous innovation and its dedication to providing an enhanced user experience within the Celo ecosystem.

As the proposal progresses, community feedback and collaboration will play a vital role in shaping the future of Celo’s Layer 2 solution. With the support of its blue-chip backers and the wider developer community, cLabs is poised to strengthen Celo’s position as a leading blockchain platform for decentralized applications, ushering in a new era of enhanced security and scalability.

David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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