Celo Network Moves to Become Ethereum Layer 2

cLabs, the Celo blockchain’s core developer, recently presented an ambitious plan to transform its Layer 1 network into a Layer 2 solution built on Ethereum.

As revealed by the cLabs team, the proposed transition to Layer 2 on Ethereum would make Celo the first major project to introduce a re-staking use case.

The Layer 2 Rollup Model

The proposal put forward by cLabs outlines a future version of Celo that will be based on a Layer 2 rollup model. In this model, Celo will leverage Ethereum’s mainnet for security by publishing security proofs. 

By doing so, Celo can benefit from the robust security guarantees offered by Ethereum, ensuring a higher level of protection than what Celo’s independent infrastructure currently provides.

Additionally, transitioning to Ethereum Layer 2 solutions allows Celo to address scalability challenges effectively. Layer 2 solutions offer improvements in transaction throughput and fee reduction, enabling Celo to accommodate a higher volume of transactions and enhance user experience. 

Moreover, the integration with Ethereum’s Layer 2 ecosystem ensures seamless interoperability with other Ethereum-based applications, facilitating cross-chain collaborations and expanding the potential use cases for Celo.

Celo to Utilize OP Stack

To facilitate the transition of the Layer 1 network to Layer 2 on Ethereum, the cLabs team plans to utilize the OP Stack, a modular tooling offered by Optimism. 

The OP Stack provides a flexible and customizable framework that allows projects to meet their specific chain requirements. This approach has been successfully employed by Coinbase, a prominent crypto exchange, in the development of its Layer 2 network known as Base.

cLabs Leverages Expertise in Other Projects

As part of the Layer 2 architecture, cLabs plans to develop a decentralized sequencer using Celo’s existing validator set. The decentralized sequencer ensures that multiple entities within the network can collectively secure the chain.

To achieve lower storage fees for the network, cLabs intends to leverage the data availability layer known as EigenDA, provided by the re-staking project EigenLayer. EigenDA improves the accessibility and affordability of data storage by enhancing data availability techniques. 

Celo Backed By Prominent Ventures

Celo, an Ethereum Virtual Machine (EVM)-compatible blockchain, has received substantial backing from notable venture firms, propelling its growth and development.

In 2019, the protocol successfully raised $30 million from renowned investors such as a16z and Polychain Capital. The platform’s success continued with another $20 million funding round in 2021. Currently, the network hosts a variety of Ethereum-based Decentralized Applications (dApps), including well-known ones like Uniswap and Sushiswap.

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