CLabs, the organization responsible for the development of the Celo blockchain, is searching to return to the Ethereum ecosystem by transitioning from a standalone EVM-compliant Layer 1 blockchain to an Ethereum Layer 2 solution.
According to a proposal discussion on the Celo governance forum, the transition would include leveraging OP Stack as the architecture to become an Ethereum L2 blockchain, removing the need to monitor tools and library compatibility via updates, “thus making it easier for Celo developers to use the full gambit of Ethereum tools/libraries.”
Other key differentiators would include an off-chain data availability layer operated by Ethereum node operators and protected by reallocated Ether (ETH), along with the transformation of current validators into decentralized sequencers for L2.
Layer 1 and Layer 2 blockchains differ mainly in their purpose, but also in their design and architecture. While L1 networks are designed to be self-sufficient, L2 solutions aim to improve the performance of L1 blockchains rather than operate independently.
The benefits of the transition would reportedly include increased security while keeping gas rates low. “We do not expect any material changes to gas rates. As the proposal is for an L2 solution with off-chain data availability, gas costs can be much lower than other L2s,” reads the proposal, scheduled for be discussed in a government call. on July 21 before being released for a “temperature check” the next day.
By adopting the proposal, end users would not be affected by the migration, and CELO token holders would maintain control over the main contracts by voting on governance proposals. In addition, CELO tokens will also be used to pay for gasoline.
Although the transition seems purely technical, it can affect the Celo ecosystem in different ways. According to the forum discussion, it could potentially allow more liquidity to flow between Celo and other chains, but also lead to additional costs for sequencers, such as fees on the data availability layer and gas on Ethereum. Also, it’s also unclear if the sequencer rewards would match the current validator rewards.
As blockchains become more and more competitive, Celo has been working to improve your mobile experience by adding more functionality and particular features. Celo’s ecosystem also targets developing economies, where more technology solutions for payments are in demand.
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