Marek Olszewski, co-founder of Celo and CTO of cLabs, said the development of Layer 2 solutions has enabled Celo’s plan to integrate back into the Ethereum ecosystem.
Born from the vision to build an easy-to-use mobile wallet on Ethereum, Celo evolved into its own EVM-compatible and scalability-oriented Layer 1 blockchain in 2020. “At the time, Ethereum’s scalability plans were evolving and the fastest way to build a scalable EVM chain that developers demanded would be launched as Layer 1,” Olszewski said. However, now that Ethereum’s roadmap for scalability via rollups is available, Olszewski sees it as an opportune time for Celo to “come home” and continue its mission as part of a larger Ethereum scaling initiative.
“We saw this as a coming home moment, something the Celo community has been thinking about for a while and that wasn’t possible until recent Layer 2 research developments like EigenDA – the Ethereum-aligned data availability protocol – made it possible for Celo to maintain its low gas rates as Tier 2,” Olszewski added.
Ethereum migration proposals and ‘Celo 2.0’ plans
cLabs, the a16z-backed core developer behind the Celo blockchain, proposed in July to migrate its network from an independent Layer 1 to a Layer 2 built on Ethereum, using Optimism’s OP Stack. Polygon Labs later suggested that Celo could migrate to an Ethereum Layer 2 via the Polygon CDK in September, when zkSync developer Matter Labs also suggested that Celo would become an Ethereum Layer 2 using the ZK Stack.
“While cLabs’ original proposal focused on leveraging OP Stack, the community has not yet decided which stack to move forward with. In addition to OP Stack, the community is investigating and evaluating a number of proposals submitted by various projects, including Polygon Labs and Matter Labs,” said Olszewski. “cLabs strives to provide as much information as possible to help the community make a quick decision. To do this, we will be publishing a framework in the coming weeks to help make the most technically sound choice without compromising the needs of our community and ecosystem.”
As part of the ‘Celo 2.0’ roadmap, cLabs plans to upgrade Celo to a highly scalable Validium-based zk-EVM, Olszewski explains. But it also wants to keep some unique features, such as the ability to pay transaction fees with ERC-20 tokens – made possible by improvements in the next generation of zk-SNARK testing systems.
Taking the leap to become an Ethereum Layer 2
Celo isn’t alone in considering a transition to becoming an Ethereum Layer 2, with several blockchain projects including Canto, Immutable and Astar partnering with Polygon Labs for their migration plans and exemplifying a growing trend in the room.
“For most EVM-compatible chains, it is becoming increasingly difficult to justify a standalone positioning in a market where the roadmap for Ethereum scaling is proving itself,” Olszewski argued.
“Part of this is because developers are interested in building on Ethereum, and in the absence of scaling limits that they previously sent to other EVM-compatible Layer 1s, that means they’re building on Layer 2s,” he said. “We have seen a number of chains flirting with the idea of switching to a Layer 2, without really committing to it. I think that will change as more projects gain the courage to take the full leap.”
A mobile-first approach
Influenced by the origins of Celo’s mobile wallet, a mobile-first approach is at the heart of the project – something it sees as essential to achieving mass adoption of blockchain technology.
“An estimated 6.9 billion people, or 86% of the world’s population, own a smartphone, while access to desktop computers is much less widespread,” Olszewski said. “Mobile phones allow ordinary people to take a leap forward in technology. That’s why making web3 universally accessible to a mainstream audience requires building mobile-first experiences.”
“As we successfully transition to Layer 2, our mobile-first approach, which we have implemented since inception, will further empower users with access and efficiency in mind,” he added.
The ‘home of ReFi’
Celo also joins the Regenerative Finance (ReFi) ecosystem – aimed at promoting sustainable and inclusive financial practices, with Olszewski describing Celo as the ‘home of ReFi’.
The Celo co-founder said his ‘Ultra Green Money’ initiative demonstrated Celo’s commitment to sustainability. This initiative builds on Ethereum’s fee mechanism to make the CELO token deflationary and send 20% of transaction fees to a new Carbon Offset Fund.
The ReFi ecosystem powers a variety of projects ranging from Universal Basic Income (UBI) distribution protocols like GoodDollar to environmental restoration efforts like Plastiks and accessible, low-cost financial instruments like MiniPay’s ultra-light stablecoin wallet, built by Opera in partnership with the Celo Foundation . Olszewski added.