Celo Seeks to Become Ethereum Layer 2 Through Strategic Upgrade

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celo seeks to become ethereum layer 2 through strategic upgrade
celo seeks to become ethereum layer 2 through strategic upgrade 4

The team behind the Celo blockchain is proposing a strategic upgrade that would see the project transition from an independent layer 1 network to an Ethereum layer 2 solution.

CLabs, the organization developing Celo, outlined the proposal in a governance forum discussion. The upgrade would leverage OP Stack as the architecture to make Celo an Ethereum layer 2 network.

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Source: Celo’s governance forum.

Key benefits cited for the transition include:

  • Leveraging Ethereum’s security while maintaining low gas fees
  • Allowing Celo developers to utilize Ethereum tooling and libraries
  • Enabling more liquidity flows between Celo and other chains

According to the proposal, end users would not be affected by the migration. CELO token holders would also retain control over core contracts by voting on governance proposals, with CELO continuing to pay for gas.

However, some potential downsides were mentioned, including higher costs for Celo sequencers to participate in the data availability layer and pay Ethereum gas fees. It’s also unclear if rewards would match current validator rewards.

The Celo team argues the proposed upgrade could improve the project’s mobile experience and functionality targeting developing markets where payment solutions are in high demand.

The upgrade proposal will be discussed on a governance call on July 21 before a “temperature check” the next day. If adopted, Celo seeks to become an Ethereum-backed layer 2 network without disrupting its existing user base and token model.

Celo’s potential move highlights how layer 2 scaling solutions are becoming increasingly important for blockchain projects looking to tap into Ethereum’s ecosystem of developers, tools and liquidity. The strategic upgrade could help Celo scale more efficiently while maintaining connectivity with the broader crypto industry.

This article is based on the original news published on Cointelegraph.

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