Celo Transitions to Ethereum Layer 2: A Strategic Move to Bolster Its Presence in DeFi

Celo, a layer 1 blockchain network known for supporting decentralized applications (dapps), has recently experienced a notable increase in activity.

Layer 1 blockchain Celo, which helps decentralized purposes (dapps), has seen a current surge in exercise. Notably, every day transaction depend crossed the 1 million mark for the primary time in 2024, reaching 1,009,286 transactions on July third, as reported by Token Terminal.

This surge follows a file spike on the finish of 2023, when transactions surpassed 13 million, marking the very best stage ever recorded for the community. Moreover, based on Token Terminal knowledge, the variety of every day lively customers on Celo peaked earlier in July, reaching 716,384.

Whereas June noticed the very best variety of lively customers up to now, July is on observe to surpass this report, based mostly on knowledge from Celo’s official explorer. Celo’s focus as a layer 1 blockchain community is on cell-first dapps and good contracts, notably these geared toward monetary purposes.

Historic Efficiency and DeFi Exercise

Throughout the 2021 increase, Celo was notably lively within the decentralized finance (DeFi) area. Nonetheless, since then, the community has skilled a major decline in traction on this sector.

The community’s complete worth locked (TVL) has dropped sharply from about $1 billion in October 2021 to roughly $100 million at current. Regardless of this decline, some multi-chain dapps stay lively on the community.

This suggests that whereas Celo’s native ecosystem could also be weaker in comparison with different established blockchains, it nonetheless retains some stage of utility and engagement.

Among the most distinguished DeFi purposes on Celo embody Mento, Uniswap, and Curve DEX. These apps stay lively, highlighting the community’s continued relevance within the DeFi area, albeit on a smaller scale than throughout its peak.

Transition to Ethereum Layer 2: A Strategic Shift

In a strategic transfer to bolster its presence in DeFi, Celo is transitioning from its present layer 1 construction to an Ethereum layer 2 community. On July seventh, Celo launched Dango, its personal scaling resolution for Ethereum, which is at the moment within the testnet part.

This new layer 2 community is about to develop into Celo’s flagship community, reflecting a serious shift within the community’s technique. The Celo group has voted to regularly transition from the layer 1 format to a extra environment friendly Ethereum layer 2 community.

This transition goals to place Celo in direct competitors with different established layer-2 options like Base, Optimism, Arbitrum, and Blast. By integrating extra closely with Ethereum, Celo seems to be to leverage the bigger ecosystem’s benefits, enhancing its scalability and interoperability.

This strategic shift might have implications for the community’s future exercise and DeFi footprint. As Celo aligns extra intently with Ethereum, it stands to achieve from the bigger community’s assets and consumer base, doubtlessly revitalizing its exercise within the DeFi area and increasing its use instances.

The above is the detailed content of Celo Transitions to Ethereum Layer 2: A Strategic Move to Bolster Its Presence in DeFi. For more information, please follow other related articles on the PHP Chinese website!