Celo Blockchain Proposes Return to Ethereum Ecosystem, Transition to L2

Syllabs is the organization responsible for developing the Celo blockchain. Ask Returning to the Ethereum ecosystem by transitioning from an independent EVM-compatible Layer-1 blockchain to an Ethereum Layer-2 solution.

According to a proposal discussion on Celo’s governance forum, the change would involve leveraging the OP stack as the architecture to become the Ethereum L2 blockchain, thereby eliminating the need to oversee tooling and library composability through upgrades. Type “Celo will make it easier for developers to use it. Whole stack of ethereum tooling/libraries.”

Other key differentiating factors will include an off-chain data availability layer operated by Ethereum node operators and secured by staking ether (ETH), as well as turning existing validators into decentralized sequencers for L2.

Layer-1 and Layer-2 blockchains differ primarily in purpose, but also in their design and architecture. While the L1 network is designed to be self-sustaining, L2 solutions aim to enhance the performance of the L1 blockchain rather than operate independently.

Benefits from the change will reportedly include increased safety while maintaining lower gas fees. “We expect that there will be no significant change in gas fee. Since the proposal is for L2 solution with off-chain data availability, the cost of gas may be much lower than other L2,” the proposal states. Which is to be discussed on the governance call. on 21 July before being released for a “temperature check” the following day.

By adopting the proposal, end users will not be affected by the migration, and CELO token holders will retain control of the core contract by voting on governance proposals. Additionally, the CELO token will also be used to pay for gas.

Although this change seems purely technical, it could affect the Celo ecosystem in various ways. According to forum discussions, this could potentially enable greater liquidity flow between Celo and other chains, but could also generate additional costs for sequencers, such as fees on the data availability layer and gas on Ethereum. Furthermore, it is also unclear whether the rewards for sequencers will match the rewards for current validators.

With blockchain becoming increasingly competitive, Celo is working on improving its mobile experience by including increased functionality and exclusive features. The Celo ecosystem is also targeting developing economies, where there is a demand for more technological solutions for payments.

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