The Celo Blockchain returns to Ethereum as a Layer 2 Rollup: How can the project benefit from this step?

Von Krypto News Österreich

Celo Blockchain plant Rückkehr als Layer 2 Rollup auf Ethereum Die Celo Blockchain, die sich bisher als eigenständige Blockchain positioniert hat, plant nun, als Layer 2 Rollup auf Ethereum zurückzukehren. Dieser Schritt soll dem Projekt zu neuer Stärke verhelfen, indem es die Vorteile des Optimism-Stacks nutzt. Die Entscheidung, das Netzwerk auf Ethereum umzusiedeln, wurde nach monatelangen Recherchen und Gesprächen mit verschiedenen Interessengruppen getroffen. Das Team hat bereits erste Schritte in der Rollup-Entwicklung unternommen. Die Celo-Community entschied sich im Jahr 2020, sich von Ethereum abzugrenzen, da die damalige Version von Ethereum mit Problemen wie niedriger Netzwerkgeschwindigkeit und hohen Transaktionskosten zu kämpfen …
Celo Blockchain plans to return as a layer 2 Rollup on Ethereum The Celo Blockchain, which has previously positioned itself as an independent blockchain, is now planning to return to Ethereum as Layer 2 Rollup. This step is intended to help the project to be new by using the advantages of the Optimism Stack. The decision to move the network to Ethereum was made after months of research and discussions with various interest groups. The team has already taken the first steps in rollup development. The Celo Community decided in 2020 to differentiate itself from Ethereum because the version of Ethereum at that time struggles with problems such as low network speed and high transaction costs ... (Symbolbild/KNAT)

Celo Blockchain plans to return as a layer 2 Rollup on Ethereum

The Celo Blockchain, which has previously positioned itself as an independent blockchain, is now planning to return to Ethereum as a Layer 2 Rollup. This step is intended to help the project to be new by using the advantages of the Optimism Stack.

The decision to move the network to Ethereum was made after months of research and discussions with various interest groups. The team has already taken the first steps in rollup development.

The Celo Community decided in 2020 to differentiate itself from Ethereum, since the ether ether etherus at that time had to deal with problems such as low network speed and high transaction costs. By switching to an independent Layer 1, Celo hoped to avoid these problems.

However, the project was faced with a new challenge after the beginning of the bear market at the end of 2021. Celo's market capitalization has dropped by almost 90 % to around $ 295 million since the all -time high in October 2021. The project has not really recovered since then.

On Ethereum, some upgrades have now been implemented, so that transaction costs and network speed should no longer be a problem. For Celo, this opens up the opportunity to benefit from the economic security of the second largest blockchain.

Celo plans to become an Optimistic Rollup, a kind of layer 2 blockchain that processes transactions off-chain with the help of zero-knowledge technology and the result feeds on Ethereum. In addition, the team plans the integration of egg, a layer of data storage, in order to keep the storage costs low. A decentralized sequencer is also supposed to define the order of the transactions in a block.

Despite the upgrade, the native Celo token is to continue to be used for governance purposes. After the announcement, the Celo token rose by 11 %.

Celo describes itself as a "carbon negative" and achieves this through a compensation program with a start-up to reduce the CO₂ footprint called Wren. The upgrade neither transaction fees nor existing DAPPS or mobile-first functions should be impaired. The sustainable Celo defi ecosystem also remains.

However, the question remains how Celo will differentiate himself from the competition. The use of the Optimism stack and the carbon-negative property are not unique for Celo. Other crypto projects such as polygon have already successfully changed their narrative.

The further development of the project will be crucial to determine whether Celo will be successful. It remains to be seen how this project will develop and whether it can meet expectations.