The Transition of Celo to an Ethereum Layer-2 Chain
The Celo blockchain has officially completed its ambitious transition to become an Ethereum layer-2 chain, marking the culmination of nearly two years of planning and development. This significant milestone was announced by the core organizations behind the network on Wednesday. The journey began in July 2023 and included a crucial community vote in July 2024, amidst a competitive landscape where layer-2 networks vied for the opportunity to support the Celo ecosystem. Ultimately, Optimism emerged victorious, earning the right to facilitate this pivotal transformation.
This upgraded network promises to deliver the benefits typical of layer-2 solutions, such as faster and more cost-effective transactions, all built on the Ethereum mainnet. Central to this enhanced functionality is Optimism’s OP Stack—a customizable framework that empowers developers to create tailored layer-2 networks leveraging Optimism’s robust technology. Marek Olszewski, CEO of cLabs, which is the principal development firm behind the Celo blockchain, expressed the organization’s strong endorsement of the OP Stack, stating, “Whenever people ask us, we always recommend the OP stack because the team there has been incredibly helpful and supportive.”
A Blueprint for Future Layer-1 Blockchains
Rene Reisberg, CEO of the Celo Foundation, highlighted the uniqueness of this migration, noting that it is the first of its kind within the Ethereum ecosystem. He believes that this transition may serve as a model for other EVM-compatible blockchains contemplating a shift to layer-2 solutions. “This approach, which involves not just launching a new chain but also preserving historical data and ensuring that the entire community transitions to the new chain, is more labor-intensive but ultimately beneficial for Celo,” Reisberg explained in an interview. He further emphasized that this transition could become a valuable case study for Ethereum.
Reisberg has also received inquiries from founders of other layer-1 blockchains, eager to learn about the intricacies of this transition and the efforts involved. “There’s definitely a growing interest in how this process feels from the inside,” he added. Despite facing challenges such as community dissatisfaction regarding the cumbersome experience of navigating among numerous layer-2 blockchains, as well as Ethereum’s fluctuating price relative to other cryptocurrencies, Reisberg remains optimistic. He indicated that other layer-1s, like Celo, are closely observing this transition and considering similar moves into the layer-2 ecosystem. “As short-term challenges subside and sentiment begins to improve, I anticipate that we will see a wave of layer-1s becoming more open about their intentions,” Reisberg stated, noting that preliminary discussions are already underway.
Celo’s Enhanced User Experience
According to the Celo team, end users can expect a seamless experience as they transition to the new network. They will continue to access essential features like SocialConnect, a protocol that links users’ phone numbers or social media handles to their Celo wallet addresses for easy payments. However, there are notable changes at the protocol level.
“Validator roles have shifted from merely managing the consensus protocol to temporarily operating community RPC nodes. Additionally, validator rewards will now be distributed through smart contract execution rather than at epoch blocks,” the team explained in a press release. Furthermore, transaction sequencing, which was previously determined by validators through the consensus protocol, will initially be managed by a centralized sequencer. A roadmap is already in place to transition towards a decentralized sequencing model in the future.
