Celo, the innovative blockchain network that launched in 2020, has officially undergone a significant transformation by transitioning from a layer-1 blockchain to an Ethereum layer-2 protocol utilizing optimistic rollups. This strategic move was announced on March 26 in an official post, signaling a new era of scalability and efficiency for the platform.
The transition to an Ethereum layer-2 protocol introduces several notable features to Celo, including one-second block times and transaction fees that are less than a cent. Additionally, the new platform supports Tether’s USDt and USDC as gas, which is pivotal for users aiming to optimize costs in their transactions.
This migration process, initially proposed in the summer of 2023, aimed to enhance both the security and scalability of the network. With block production on the old layer-1 platform ceasing, Celo is now fully operational on the new Ethereum-based architecture. Marek Olszewski, the CEO of Celo developer cLabs, emphasized the security benefits of this transition, stating that Celo transactions are now anchored to Ethereum, thereby inheriting its well-established economic security and decentralization.
What are Optimistic Rollups? Blockchain rollups are layer-2 scaling solutions designed to bundle multiple transactions off the main blockchain. This approach significantly reduces congestion and lowers transaction fees for users. The term ‘optimistic rollups’ is derived from the assumption that offchain transactions are valid by default. The mechanism only resorts to fraud proofs if discrepancies arise during a challenge period on the main chain.
This transition not only simplifies Celo’s infrastructure—reducing the codebase by an impressive 365,000 lines—but also enhances its composability with Ethereum-native apps and protocols. Olszewski noted that this significant reduction in code leads to a lighter and cleaner architecture, which is crucial for maintaining platform integrity and performance.
Furthermore, the upgrade preserved Celo’s nearly five-year chain history, which adds credibility as it moves into this new era. With the token now integrated into the Ethereum blockchain, liquidity for Celo is expected to increase markedly, thus benefiting users and developers alike.
In conclusion, Celo’s transition to an Ethereum layer-2 protocol represents a major leap forward in blockchain technology. By leveraging the powerful network effects of Ethereum, Celo positions itself to tap into the largest pool of liquidity available, paving the way for future growth and innovation in the decentralized finance landscape.
