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Celo, the blockchain network launched in 2020, has officially transitioned from a layer-1 blockchain to an Ethereum layer-2 protocol.
This move was confirmed by Celo on March 26 in a post on X, where they declared, “Celo is officially an Ethereum layer 2 protocol.” In the announcement, Celo highlighted key features of the new protocol, including one-second block times, sub-cent transaction fees, and the use of Tether's USDt and USDC as gas tokens.
The transition was first proposed in the summer of 2023 and has now been completed, with block production on the old layer-1 platform halting and continuing on the new layer-2 network. The upgraded platform uses the OP technology stack and an optimistic rollups implementation.
Optimistic rollups, a layer-2 scaling solution, group multiple transactions off the main blockchain to reduce congestion and lower fees. These rollups assume off-chain transactions are valid by default, only triggering fraud proofs if discrepancies are identified on the main chain during a challenge period.
Marek Olszewski, CEO of Celo’s developer cLabs, shared with Cointelegraph that migrating to Ethereum's layer-2 enhances Celo’s security and scalability. He added, “Celo transactions are now secured by Ethereum, benefiting from its proven economic security and decentralization. Celo L2 also provides one-second block times and near-instant transaction confirmations.”
Irfan Shaik, founder of the rollup protocol Interstate, also viewed the transition positively, noting that Ethereum has the “strongest network effects of any chain.” He explained that instead of dealing with liquidity fragmentation, Celo can now tap into Ethereum's large liquidity pool.
Olszewski expressed excitement over the switch to the OP tech stack, emphasizing how it enables “better composability with Ethereum-native apps and protocols.” The new system is notably simpler, with 365,000 fewer lines of code, reducing the attack surface and leading to a lighter, faster, and cleaner codebase.
Additionally, the upgrade preserves Celo’s nearly five-year history and was done in a trustless manner. The token migration to the Ethereum blockchain is expected to enhance its liquidity. Olszewski concluded, “This makes Celo a fully-integrated Ethereum layer-2 — in terms of architecture, ecosystem, and mission.”