Celo, a blockchain platform operational since 2020, has marked a significant milestone by successfully transitioning from its original layer-1 architecture to an Ethereum layer-2 solution.
Announced via a March 26th post on X, Celo confirmed its new status as an Ethereum Layer-2 protocol.
The organization highlighted the enhanced capabilities of the upgraded network, including rapid one-second block times, remarkably low transaction fees under a cent, and the designation of both Tether’s USDt and USDC as gas currencies.
From Layer-1 to Optimistic Rollup: A Strategic Shift
This transformation, initially proposed in the summer of 2023, reached fruition after the original layer-1 platform ceased block production, seamlessly shifting operations to the newly configured network.
The revamped Celo platform is built upon the foundation of Optimism’s technology stack, implementing an optimistic rollup framework.
This move strategically positions Celo within the Ethereum ecosystem, leveraging its robust infrastructure and expansive network effects.
Optimism-Based Architecture Enhances Performance
Blockchain rollups, categorized as layer-2 scaling innovations, are designed to aggregate numerous transactions away from the primary blockchain layer.
This off-chain processing significantly alleviates congestion on the main chain, leading to reduced transaction expenses and increased throughput.
Optimistic rollups derive their name from their operational principle: they assume that off-chain transactions are valid unless proven otherwise.
Validity is implicitly accepted unless fraud proofs are submitted during a designated challenge period, triggered by detected discrepancies on the main Ethereum chain.
Increased Security and Scalability with Ethereum L2 Integration
Marek Olszewski, the CEO of cLabs, the entity responsible for developing Celo, emphasized the benefits of this migration.
He explained to Cointelegraph that “migrating to an Ethereum L2 enhances Celo’s security and scalability.”
By becoming a layer-2 on Ethereum, Celo inherits the security guarantees of the robust and decentralized Ethereum mainnet, while simultaneously improving its transaction processing capacity through rollup technology.
Tapping into Ethereum’s Network Advantages
Irfan Shaik, the founder of the rollup protocol Interstate, also lauded the strategic benefits of this evolution for Celo.
He pointed out the unparalleled “network effects” that Ethereum commands, stating that transitioning to an Ethereum L2 allows Celo to tap into the largest liquidity pool within the crypto space, available within the Ethereum layer-1 ecosystem.
This strategic move counters the challenges faced by independent Layer-1 chains, which often suffer from fragmented liquidity and limited network reach.
Also Read: Tether teaches Celo users about USDT’s uses
