The development team behind the independent Celo blockchain is actively considering the benefits of transitioning to the Ethereum ecosystem. CLabs, the developer responsible for the Celo blockchain, has proposed a shift from being an independent layer-1 blockchain to an Ethereum layer-2 solution.
The team communicated this proposal through a Twitter announcement, emphasizing the potential advantages it could bring. The move to the Ethereum ecosystem aims to simplify liquidity sharing between Celo and Ethereum, enhance security measures, and provide a seamless experience for developers. Notably, Celo already operates the Ethereum Virtual Machine, enabling the support of smart contracts using a language similar to Ethereum’s development standards.
According to current data from DefiLlama, the total value locked in Ethereum exceeds $26 billion, while Celo stands at approximately $99 million. To further enhance its operations, Celo plans to leverage EigenLayer’s EigenDA for off-chain data availability. EigenDA is operated by Ethereum node operators, and the adoption of this off-chain data availability solution by Celo could prevent a significant increase in transaction fees while contributing to the overall Ethereum ecosystem, as outlined in the blog post.
Following the announcement, CELO, the native token of the Celo blockchain, experienced a notable surge of nearly 10% on Monday, reaching a two-week high of $0.59. Over the past month, the token has demonstrated consistent growth, with an increase of approximately 45%.
Vitalik Buterin, the founder of Ethereum, expressed his enthusiasm for the proposal in response to cLabs’ blog post, stating, “Amazing, and excited to see this!” He also offered technical suggestions to consider, underscoring his desire to witness closer integration between the Celo ecosystem and Ethereum.
Data from Dune analytics showcases a significant increase in transaction growth for Celo in recent months, further underscoring the platform’s potential and ongoing development.
