Celo Proposes Transition to Ethereum L2: CELO Token Pumps

Celo, which brands itself as a ‘carbon-negative, mobile-first, EVM-compatible’ blockchain, proposed a move which would see the network cease to be its own layer-one blockchain, and move to become a layer-two network on Ethereum.

The final decision will lie with Celo’s community with a vote set to be carried out on July 22. If successful, Celo will transition to an Optimism-style Ethereum layer-two. However, its validator set will remain involved in running Celo’s L2, and the network will be complimented by an additional data-availability layer facilitated by EigenLayer.

cLabs points to an increase in network security, as a result of leveraging Ethereum, as well as improved developer experience, as some of the primary motivations behind the proposal.

It further seems likely that the increasing interest in Ethereum layer-two networks (such as Arbitrum and zkSync) from both developers and investors, as well as a lack of activity and locked-value across competing layer-one networks, may have played a key part in cLabs decision to propose the change.

Celo Today

Celo’s blockchain launched in mid-2020 and has raised private funding amounting to $66.5 million, according to data from Crunchbase, which saw early investment from high-profile funds such as a16z and Polychain.

Despite monthly usership of as low as 3,000 in January of this year, Celo’s traction appears to have exploded, now recording as much as 70,000 monthly users, according to data from Dune Analytics.

The network’s governance token, CELO, has a market capitalization of $271 million, but spiked briefly to more than $300 million, shortly after the announcement was made. 

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