After nearly two years of planning and testing, Celo has officially switched from being its own blockchain to becoming a Layer-2 network on Ethereum. This change was made to improve security, speed up transactions, and make it easier for developers to build on the network.
Why Was This Change Made?
Celo’s transition to Ethereum’s Layer-2 was first suggested two years ago as a way to take advantage of Ethereum’s stronger security and increase real-world use cases. Over the past 20 months, extensive testing and community discussions were carried out before the final move was made.
The migration was completed using Optimism’s OP Stack and EigenDA to handle data. While Celo is now operating as an Ethereum Layer-2, its well-known features—such as low fees and fast transactions—have been maintained.
The official Celo website confirmed the switch with an announcement:
“The Celo L2 migration has been successfully completed. Celo is now live as an Ethereum Layer 2.”
How the Migration Happened
To complete the transition, Celo’s old blockchain was temporarily paused so the upgrade could take place. Within two hours, the new system was up and running, and essential services like public RPC (Forno) and indexers were restored.
What Changes for Users and Developers?
A number of improvements have been introduced with this transition:
Transactions are now processed five times faster—blocks are produced in one second instead of five. Fees remain extremely low—only $0.0005 per transaction. Security has been enhanced by integrating into Ethereum’s network. Developers can now use Ethereum-based tools and apps on Celo with little effort.
The change has been described by Marek Olszewski, co-founder of cLabs (Celo’s development team), as a “return home” for the network, combining the best of Celo and Ethereum.
Market Response & The Bigger Picture
Following the announcement, Celo’s token (CELO) saw a 4% price increase, reflecting investor optimism.
However, this transition has taken place at a time when the role of Layer-2 networks is being debated.
- Solana’s co-founder, Anatoly Yakovenko, has argued that Layer-1 blockchains (like Solana) are already efficient enough, making additional layers unnecessary.
- Binance’s founder, Changpeng Zhao (CZ), has also questioned whether AI projects should be built on Layer-1 or Layer-2 networks.
Meanwhile, a 95% drop in Ethereum’s transaction fees has been recorded, as more users have shifted to cheaper Layer-2 solutions like Celo.
What’s Next for Celo?
By moving to Ethereum’s Layer-2, Celo users will benefit from faster, cheaper, and more secure transactions, along with better integration into Ethereum’s ecosystem.
Ethereum’s co-founder, Vitalik Buterin, has expressed support for the move, stating:
“Celo has played a big role in making crypto more accessible. I’m excited to see it fully become part of the Ethereum family.”
However, some challenges remain:
Ethereum’s main network could lose transaction fee revenue as more users move to Layer-2 solutions like Celo. Celo will need to find new ways to keep its network secure and reward validators. Alternative revenue sources, such as MEV (Maximal Extractable Value) or partnerships, may need to be explored.
While some skepticism about Layer-2 solutions exists, many blockchain experts believe they are essential for making blockchain technology scalable.
- Joanna Zeng, CEO of SOON (a rollup network), has argued that Layer-1 blockchains cannot change their base structure, so Layer-2 solutions remain necessary for scalability.
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