Celo Completes Transition to Ethereum Layer-2 Chain

According to CoinDesk, the Celo blockchain has successfully transitioned to an Ethereum layer-2 chain, concluding a nearly two-year process. This significant development marks the end of a journey that began in July 2023, involving a community vote in July 2024 and a competitive selection process won by Optimism. The transition enhances the network by offering faster and cheaper transactions on Ethereum's mainnet, powered by Optimism’s OP Stack, a customizable framework for building layer-2 networks. Marek Olszewski, CEO of cLabs, the main developer firm supporting Celo, praised the OP Stack, stating, "Whenever people ask us, we always recommend the OP stack, because the team there has been so helpful and so supportive." This migration is considered a pioneering move within the Ethereum ecosystem, potentially serving as a blueprint for other EVM-compatible blockchains aiming to become layer-2 networks. Rene Reisberg, CEO of the Celo Foundation, emphasized the importance of maintaining historical data during the transition, making it a valuable case study for Ethereum. Despite challenges faced by Ethereum leaders, including community backlash and competition from other blockchains like Solana, Reinsberg noted that similar layer-1 networks are observing Celo's transition and contemplating their own moves into the layer-2 ecosystem. "As some of these short-term storms come down and sentiment starts to shift, I think you'll start seeing a series of layer 1s that will likely be more public about that," Reisberg commented, highlighting the growing interest in such transitions. For Celo end users, the transition will not significantly alter their experience, as they will continue to access key features like SocialConnect, which links phone numbers or X handles to Celo wallet addresses for payments. However, there are notable protocol-level changes. Validator responsibilities have shifted from operating the consensus protocol to temporarily running community RPC nodes, with rewards now distributed via smart contract execution. Transaction sequencing, previously managed by validators, will initially be handled by a centralized sequencer, with plans for future decentralization. This strategic move positions Celo within the evolving landscape of Ethereum layer-2 solutions.