Celo Proposes Transition to Ethereum's Layer-2 Solution

A new decision aims to streamline value transfer between Celo and Ethereum, while enhancing network security.

Celo Proposes Transition to Ethereum's Layer-2 Solution

As reported by Coin68, CLabs, the blockchain development team behind Celo, has proposed transitioning Celo from an independent layer-1 blockchain to a scalable Ethereum layer-2 solution on July 15.

Today, the proposal has officially passed with a vote of 128 out of 131, with 2 votes against and 1 abstention. However, this decision was not made overnight, as the project team spent months researching and discussing with its community and Ethereum.

Details of the Proposal

Key changes include:

• Adopting Optimism's OP Stack as the layer-2 solution, similar to Base and Zora Network.
• The transaction sequencer will utilize Celo's current validators, with Byzantine Fault Tolerance consensus mechanism.
• Off-chain data availability layer will employ EigenLayer's EigenDA solution to restake ETH, ensuring security and maintaining low transaction fees.

According to the proposal, these changes aim to simplify liquidity sharing between Celo and Ethereum, enhance security, and optimize developer experience. Given Celo's inherent compatibility with the Ethereum Virtual Machine (EVM), Ethereum projects can easily migrate to or develop new applications on Celo.

Benefits of Becoming Ethereum's Layer-2

Transitioning to Ethereum's layer-2 offers several advantages for Celo:

• Aligning with Ethereum's development direction and EVM compatibility.
• Inheriting Ethereum's network security.
• Streamlining liquidity transfers between the two chains.

Nevertheless, the project affirms its commitment to its original mission of democratizing blockchain advancements for global users. Additionally, CELO will continue to function as the primary currency of the blockchain, used for transaction fees, staking, and platform governance.

CELO has surged by 10% over the past 7 days after a period of stagnation, currently trading around $0.516 USD.

1-hour Chart of CELO/USDT on Binance at 10:10 PM on 31/07/2023

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