Celo, the blockchain network that launched in 2020, has officially completed its transition from an independent layer-1 blockchain to an Ethereum layer-2 protocol, fundamentally altering its technical architecture while preserving its nearly five-year history.
<u>What to Know:</u>
- Celo has officially transitioned from a layer-1 blockchain to an Ethereum layer-2 protocol using optimistic rollups
- The new architecture promises one-second block times, sub-cent transaction fees, and 365,000 fewer lines of code
- Industry experts believe the change will allow Celo to tap into Ethereum's liquidity and network effects while enhancing security
The protocol announced the successful transition in a March 26 X post declaring "Celo is officially an Ethereum layer 2." According to the organization, the newly restructured protocol now features one-second block times, transaction costs below one cent, and supports Tether's USDt and USDC as gas for transactions.
This significant technical shift comes after the proposal was first introduced in summer 2023, with block production on the legacy layer-1 platform now halted as operations continue on the new network.
"Migrating to an Ethereum L2 enhances Celo's security and scalability," Marek Olszewski, CEO of Celo developer cLabs, told Cointelegraph. "Celo transactions are now anchored to Ethereum, inheriting its battle-tested economic security and decentralization."
Layer 2 Technical Implementation and Benefits
The transition implements an optimistic rollups architecture based on the OP technology stack. Blockchain rollups function as layer-2 scaling solutions designed to bundle multiple transactions off the main blockchain, reducing network congestion while lowering fees. Optimistic rollups earn their name from their default assumption that off-chain transactions are valid, only utilizing fraud proofs during challenge periods when the main chain detects potential discrepancies.
The new system operates with significantly streamlined code, eliminating approximately 365,000 lines compared to its previous implementation. Olszewski emphasized this reduction decreases the potential attack surface while creating "a lighter, cleaner and faster codebase."
"Celo L2 also offers one-second block times and near-instant confirmations," Olszewski added. The upgrade preserved the blockchain's entire transaction history dating back to its 2020 launch and was executed through what developers describe as a trustless migration process.
The protocol's native token has also migrated to the Ethereum blockchain. This move should theoretically increase its liquidity by connecting to Ethereum's larger ecosystem.
Irfan Shaik, founder of rollup protocol Interstate, viewed the architectural shift positively for the protocol's future prospects. "Layer 1s with liquidity fragmentation can instead tap into the largest pool of liquidity available, the ETH layer 1s," Shaik noted, highlighting Ethereum's dominant position in the blockchain ecosystem.
Celo Ecosystem Integration
The technical reformation fundamentally changes Celo's position within the broader blockchain landscape. By adopting the OP technology stack, Celo gains "deeper composability with Ethereum-native apps and protocols," according to Olszewski.
This alignment extends beyond mere technical implementation. "What this means is that Celo becomes a fully-aligned Ethereum layer 2 — by architecture, by ecosystem and by mission," Olszewski explained.
The transition represents a strategic pivot for Celo, which previously operated as an independent layer-1 blockchain for nearly five years. By connecting to Ethereum's established infrastructure, the protocol aims to benefit from stronger security guarantees while maintaining its own distinct features like ultra-fast block times and extremely low transaction costs.
Ethereum itself has increasingly adopted a modular approach to scaling, with numerous layer-2 solutions building on its security foundation while addressing performance limitations.
Celo's migration reinforces this trend of formerly independent blockchains reconsidering their architectural approaches in favor of leveraging Ethereum's network effects.
Final Thoughts
Celo's transition to an Ethereum layer-2 protocol marks a significant shift in its technical approach, trading independence for enhanced security and ecosystem integration. The move reflects broader industry trends toward modular blockchain architectures that leverage Ethereum's established security while addressing performance constraints.