cLabs, the primary developer behind the Celo blockchain, has unveiled an ambitious strategy to transition its Layer 1 network into a Layer 2 solution built on Ethereum. This strategic pivot aims to bolster security measures and enhance the overall functionality of the platform.

Outlined in a proposal shared on the project’s governance forum, the vision for the future version of Celo revolves around adopting a Layer 2 roll-up model. This approach involves publishing security proofs to the Ethereum mainnet, leveraging Ethereum’s robust security infrastructure to provide even greater assurances than what Celo currently offers independently.

To facilitate this transition, cLabs plans to utilize the OP Stack, a set of modular tools provided by Optimism, enabling them to tailor the chain's requirements. Similar methodologies have been effectively employed by Coinbase for their Layer 2 network, Base. As part of the Layer 2 architecture, cLabs intends to develop a decentralized sequencer using Celo’s existing validator set, ensuring multiple entities can contribute to securing the chain. Additionally, they will leverage EigenDA, a data availability layer from the EigenLayer project, to reduce storage fees for the network.

Initially backed by prominent venture firms such as a16z and Polychain Capital in a $30 million funding round in 2019, Celo further raised $20 million in 2021.

Presently, the Celo network hosts various Ethereum-based decentralized applications like Uniswap and Sushiswap, alongside native applications like Valora, Mento, and UbeSwap.

Importantly, the proposal underscores that migrating Celo’s EVM-compatible Layer 1 to an Ethereum Layer 2 solution will be a technical upgrade that won't disrupt the existing Celo ecosystem of applications. The transition aims to enhance security measures while ensuring compatibility and continuity for Celo users and developers.

By embracing Ethereum’s Layer 2 solutions, cLabs seeks to harness the robust security guarantees of the Ethereum mainnet while unlocking new opportunities for scalability and functionality. The proposed transition underscores cLabs’ commitment to continuous innovation and its dedication to providing an enhanced user experience within the Celo ecosystem.

As the proposal advances, community feedback and collaboration will be crucial in shaping the future of Celo’s Layer 2 solution. With the support of its blue-chip backers and the wider developer community, cLabs is positioned to strengthen Celo’s position as a leading blockchain platform for decentralized applications, ushering in a new era of enhanced security and scalability.