Celo Proposes Swapping to Ethereum Layer-2

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  • The Celo blockchain is contemplating abandoning its layer-1 status and becoming an Ethereum scaling platform
  • The proposed shift intends to ease the interaction between the blockchain and developers while also providing a comprehensive Ethereum tooling
  • The transition will also see Celo provide access to off-chain data and offer lower transactions costs compared to other Ethereum scaling layers

The Celo blockchain is thinking of abandoning its layer-1 status and returning “home to Ethereum” where it’ll become a layer-2 platform. The proposed shift intends to ease the interaction between the chain and developers while providing a comprehensive access to Ethereum tools and libraries. As part of the move, Celo’s creator CLabs said that they’re willing to provide access to off-chain data which will also enable them to offer lower transaction costs compared to other Ethereum scaling solutions.

No Changes for End Users

The idea of reverting to an Ethereum scaling layer was floated on the blockchain’s governance forum. According to CLabs, the shift would harness the power of Optimism Stack (OP Stack) which enables the creation of customized solutions for Ethereum.

Scheduled to be formally discussed this Friday, July 21, CLabs disclosed that such a move will also boost the network’s security. Celo’s creator noted that the change would not impact the chain’s end-users and its native token (CELO) holders will continue to govern critical areas of the platform through voting.

The proposal also notes that the transition won’t affect existing decentralized applications (Dapps), regenerative finance (ReFi) applications or its “mobile-first features [and] 1-block finality.” 

A Hard Fork Cements the Changes

A day after the governance call on Friday, CLubs will release an “indicative on-chain governance proposal […] for engagement.” This will be followed by refining the proposal as it awaits approval by the community after which it will be implemented through a hard fork. The proposal comes two days after leading Ethereum scaling layer Polygon proposed an overhaul of its architecture.

Although Celo moving from a layer-1 to a layer-2 is an uncommon occurrence in the blockchain world, it suggests that offering scaling solutions on Ethereum can be more lucrative than going it alone.