Written by Hazel J. Greene, Senior Analyst

cLabs, the developer behind Celo blockchain, has recently unveiled an ambitious plan to transition the platform into an Ethereum layer-2 network. Through extensive research and consultations with the Celo community, this proposal aims to foster blockchain adoption and make it accessible to users irrespective of their location. Celo’s unique ability to generate public keys from phone numbers sets it apart from other networks.

Outlined in a comprehensive architecture proposal on July 15, Celo intends to leverage the OP Stack to become an Ethereum layer-2 platform while retaining its distinctive features. With the existing Ethereum blockchain infrastructure, this transition has become feasible, as noted by independent Ethereum advisor Sassal.eth.

Aligned with the network’s mission of promoting global prosperity through inclusive financial opportunities, Celo’s migration to a layer-2 platform seeks to maintain a strong relationship with Ethereum through collaborative initiatives and the introduction of new proposals. The upgrade aims to enhance user experience for both developers and end users.

Becoming Ethereum layer-2 brings several improvements to the Celo platform. One significant enhancement is the implementation of a decentralized sequencer, utilizing Celo’s existing validator set running Byzantine Fault Tolerance (BFT) consensus. Moreover, the incorporation of EigenLayer, a middleware that leverages Ethereum’s security and decentralization, along with EigenDA, promises to enhance data availability.

Migrating to an Ethereum layer-2 significantly improves security for Celo. By anchoring the state on the Ethereum mainnet, adding an extra layer of security to its dynamic security setup, Celo aims to reinforce its reputation as a secure platform. With approximately 110 validators elected by around 300 million locked CELO, this transition ensures robust security measures.

While Celo is already compatible with the Ethereum Virtual Machine (EVM), maintaining consistent compatibility requires ongoing monitoring. By moving to layer-2, the need for such tracking is eliminated, encouraging cross-community collaboration and reducing gas fees. Developers can benefit from seamless access to Ethereum’s tools and libraries, while end users will experience minimal changes alongside the added security provided by Ethereum’s economic security.

Ethereum layer-2 networks have garnered attention due to their scalability and low gas fees. Celo’s plan to become a layer-2 platform with a decentralized sequencer provides developers with an additional choice alongside popular options like Arbitrum and Optimism. According to L2Beat, Arbitrum currently holds the highest total value locked (TVL) at $6.12 billion among layer-2 networks.

With Celo’s transition to an Ethereum layer-2 network, the platform aims to drive blockchain adoption, enhance user experience, and strengthen security measures. This move aligns with Celo’s mission of fostering global prosperity through inclusive financial opportunities. As the layer-2 landscape continues to evolve on Ethereum, Celo’s unique features and commitment to collaboration position it as an attractive choice for developers and users alike.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.