Celo Joins Ethereum Layer-2 Ecosystem, Slashes Fees and Boosts Speed
Celo successfully completed its migration from a standalone layer-1 blockchain to an Ethereum layer-2 network, a process that initially began in July 2023. The transition, activated at block height 31056500, used Optimism’s OP Stack for transaction processing and EigenDA to ensure data availability. The switch reduced block times, dropping them from 5 seconds to 1 second, while transaction fees fell to $0.0005, increasing efficiency and affordability. Also read: 3 Primary Components of a Blockchain Architecture Following 20 months of planning and development—including testnet phases like Dango and Alfajores—the project now integrates with Ethereum and accommodates over 1,000 projects alongside maintaining features such as SocialConnect for mobile phone payments. Coinbase Snub Sparks Chaos as Celo Moves Ahead The upgrade brings clear advantages. Users benefit from faster transactions and low costs, with native bridging supporting asset transfers between Celo and Ethereum. The project’s token is now native to Ethereum, while layer-2 CELO represents bridged tokens—a change that requires users to learn and adjust. Developers now have access to Ethereum’s ecosystem, improving compatibility and scalability for decentralized applications. Also read: Layer 1 vs Layer 2 Blockchains: Key Differences and Promising Use Cases Explained However, Coinbase’s November 2024 decision to withhold support sparked controversy, instructing users to withdraw CGLD tokens by Jan. 13, 2025, leading to a 5% token value decline. Tether and other stakeholders vowed to continue supporting the project. Scalability Gamble Pays Off: Celo’s New Era Begins Now Celo’s Layer-2 migration positions it as a major contender in Ethereum’s scaling efforts, which is in line with its financial inclusion goals. 🏡 @Ethereum, we're home!Following a successful "hard hard fork" led by core contributors at @cLabs & L1 validators, Celo is officially an Ethereum Layer 2 🪨 🪨 🍴What does that mean for the diverse, global decentralized ecosystem? Keep reading to find out ↓ pic.twitter.com/slW1W5oRmP— Celo.eth 🦇 🌳 (@Celo) March 26, 2025 The upgrade improves security by relying on Ethereum’s infrastructure without compromising the project’s focus on the real world. Technical updates, such as the removal of precompiles and the addition of P256VERIFY for signature verification, ensure operational efficiency. Forno node services are fully active, supporting the network. Despite Coinbase’s stance, which led to the debate, the migration was a success—driven by community governance and technical execution—a sign of a new chapter. Also read: Understanding the Basics of Crypto Protocols With over 1,000 integrated projects, the project bridges Ethereum’s reach with its innovative tools and potentially increases adoption in markets. The migration, documented in Celo’s official resources and recent reports, is that of strategic growth. With Celo growing into its Layer-2 role, its impacts on users, developers, and the overall crypto space will most probably unfold across the next few months. Toheeb is an insightful blockchain reporter with deep knowledge of cryptocurrencies. With years of experience in financial journalism, Toheeb covers the latest developments in blockchain technology, cryptocurrency trends, decentralized finance (DeFi), and regulatory updates. Known for breaking news and in-depth analysis, Toheeb brings new angles on how blockchain is transforming industries and changing the global economy. From uncovering market movements to providing expert commentary on new technologies, Toheeb is dedicated to keeping readers informed about the developments in blockchain-related topics. View all posts