HomeNewsCelo's Breakthrough: Layer-2 Integration Marks Its Entry into Ethereum's Arena

Celo’s Breakthrough: Layer-2 Integration Marks Its Entry into Ethereum’s Arena

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  • CLabs, the driving force behind the Celo blockchain, unveils plans to transition to an Ethereum Layer-2 (L2) solution from its current standalone Layer-1 (L1) blockchain.
  • The shift is aimed at harnessing enhanced Ethereum tooling/libraries and providing heightened security while preserving low gas fees.

In a trailblazing move, CLabs, the entity credited with the development of the Celo blockchain, has proposed its integration back into the Ethereum ecosystem. The plan is to transition from a self-reliant Ethereum Virtual Machine (EVM)-compatible Layer-1 blockchain to an Ethereum Layer-2 (L2) solution.

Transitioning to Ethereum’s Layer-2: A Strategic Shift

According to an ongoing discussion in Celo’s governance forum, this transition involves utilizing the OP Stack architecture. This will allow Celo to metamorphose into an Ethereum L2 blockchain. This significant shift would dissolve the need for constant monitoring of tooling and libraries’ composability during upgrades, thereby paving the way for Celo developers to employ the comprehensive suite of Ethereum tooling/libraries.

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In contrast to Layer-1 networks that are designed for self-sufficiency, Layer-2 solutions are intended to boost Layer-1 blockchains’ performance rather than functioning independently. Other distinctive elements include an off-chain data availability layer supervised by Ethereum node operators and secured by restaked Ether (ETH). The proposal also implies the current validators’ transformation into decentralized sequencers for L2.

This proposed transition is anticipated to offer substantial security enhancements while preserving low gas fees. The forum’s proposal declares,

“As the proposal is for an L2 solution with off-chain data availability, gas costs can be a lot lower than on other L2s.”

The change, if implemented, should be seamless for end-users, with CELO tokenholders retaining their governance rights over core contracts through voting. In addition, CELO tokens would be employed to cater for gas costs.

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While the transition appears primarily technical, it might bring notable changes to the Celo ecosystem. It could potentially stimulate more liquidity exchange between Celo and other chains but may also impose additional costs for sequencers, such as data availability layer fees and Ethereum gas charges. Moreover, the equivalence of sequencers’ rewards to current validators’ rewards remains uncertain.

In the ever-competitive blockchain landscape, Celo’s strategic move to augment its mobile experience through additional features and functionality comes as no surprise. The Celo ecosystem, by targeting emerging economies, aims to provide much-needed tech-savvy payment solutions.

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Jane Smith
Jane Smith
As a Bitcoin Journalist, I am dedicated to reporting the latest developments in cryptocurrency, with a particular focus on Bitcoin. Through extensive research and interviews with industry experts, I provide accurate and up-to-date information on the ever-evolving world of cryptocurrencies. My goal is to help readers stay informed and make informed decisions regarding their investments in this rapidly changing field.
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