| cgp | title | date-created | author | discussions-to | status | governance-proposal-id |
|---|---|---|---|---|---|---|
87 |
Temperature Check - Celo transition to an Ethereum L2 |
2023-07-21 |
productmatt |
EXECUTED |
116 |
This governance proposal is a vote for the community in support of Celo returning home to Ethereum by transitioning from being an independent EVM-compatible Layer 1 blockchain to an Ethereum Layer 2. Specifically, it is not a vote on the architecture or design choices of how to achieve that goal of becoming a Layer 2.
This proposal is based on a Celo forum post and suggests a high-level architecture where the Celo blockchain initially leverages additional technology to become an Ethereum L2. Importantly, this proposal is not specifying specific implementation details about the frameworks used or the type of L2 Celo should become. It is merely a temperature check about the general direction. With key differentiators including:
- Decentralized sequencer powered by Celo’s existing validator set running Byzantine Fault Tolerance consensus.
- Off-chain data availability layer.
- A design that retains Celo's 1-block finality.
Through implementation of the L2 proposal, cLabs would expect to realize the following set of advantages:
- Increased Cross-Community Collaboration – Historically, Celo’s technical roadmap has aligned closely to that of Ethereum, being early adopters of Ethereum Improvement Proposals (EIP) such as EIP-1559 (gas fee reductions) and EIP-4337 (account abstraction). While learning from proposals as they’ve been released, officially aligning to the Ethereum community offers the Celo ecosystem an opportunity to not only collaborate with the Ethereum community on existing EIPs, but also introduce our own, with near term examples being exploring standard for off-chain data availability and decentralized sequencers.
- Enhanced Compatibility – While Celo has been an EVM compatible chain since inception, considerable work is needed on the backend to ensure that tooling and libraries maintain compatibility through upgrades of the Celo geth fork or core Web3 libraries. Migrating Celo to an L2 reduces the need to monitor compatibility, making it even easier for Celo developers to utilize the full gambit of Ethereum tooling / libraries.
- Increased Security – Currently, Celo is secured by a set of 110 validators which in turn are elected by ~300M in locked CELO. While this offers a significant level of decentralization and economic security, moving to an L2 architecture can improve that security threshold multifold by anchoring the state on the Ethereum mainnet, while using a decentralized source for data availability.
- Maintained Low Gas Fees – We expect no material change of gas fees. As the proposal is for an L2 solution with off-chain data availability, gas costs can be a lot lower than on other L2s which opt for on-chain data availability such as Optimism or zkSync era. More details on gas fees can be found in the Appendix.
Migrating from an EVM-compatible L1 to an Ethereum L2 will be a technical upgrade that does not impact the Celo ecosystem’s mission to create the conditions of prosperity for all. In fact, we hope it can accelerate the path towards it. Through this proposed change, the Celo ecosystem can continue to foster a financially inclusive community and build openly in the spirit of Web3, bringing real-world use cases to the Ethereum ecosystem. At the same time, this proposal has the potential to substantially enhance the scope and impact of the Celo blockchain. In particular, key benefits to migrating to an L2 include:
- Further Ethereum alignment and EVM compatibility, fostering a seamless developer experience
- Stronger security assurances than Celo provides individually
- A trustless bridge to Ethereum, simplifying liquidity sharing between Celo and Ethereum
Change – Validators have and will continue to play a critical role in the health of the Celo ecosystem. Validator responsibilities have traditionally included the ordering and processing of transactions, which is expected to continue. This proposal leverages Celo's current validators and transforms them into the sequencers for the L2. Thanks to them, Celo will be based on one of the first (if not the first) decentralized sequencer and deliver 1-block finality on a L2. The one change for both validators and full node operators would be the need to also run an Ethereum node (or access to a trusted one) since any L2 node needs to observe the L1 (Ethereum) to derive the canonical chain.
Change – Developers should approach the upgrade with a similar mindset as if a hard fork upgrade was happening: no changes to what Celo offers them now, only some important improvements.
- Regarding current offerings: There would be no changes to existing dApps, no changes to mobile-first features (e.g. SocialConnect) nor the growing regenerative finance (ReFi) stack. Importantly, gas fees changes would be immaterial, a key contributor in achieving global financial prosperity and core to the Celo community’s mission (see “Celo Community Impact '' below for more).
- Regarding improvements: First, besides having 1-block finality secured by Celo stake, there would also be a stronger (but slower) finality guarantee derived from Ethereum's economic security and DA layer security. Second, they’ll have access to a native bridge to Ethereum, increasing the composability of Celo dApps with Ethereum. Finally, an additional censorship resistance mechanism will allow Celo transactions to be posted directly into Ethereum to force their inclusion.
No change – End users will not notice any change. Gas fees would have immaterial changes due to the data availability layer of the proposed L2 being managed off-chain, reducing costs to align closely with Celo L1 gas fees and significantly lower than alternative L2s such as Optimism and zkSync. In addition, end users will benefit indirectly through the adoption of Ethereum's security model in addition to Celo's battle-tested Proof-of-Stake system.
No change – CELO will keep its core functionality as a governance tool for the Celo blockchain, meaning CELO holders control:
- the core contracts through voting on governance proposals and
- the validator set through staking and elections.
Additionally, CELO will continue to be utilized for gas payments. A part of the gas fee will be used to pay for transactions on the L1 to anchor the Celo state on Ethereum. We expect this aspect to be immaterial compared to the total gas fees of Celo.
Forum Post: cLabs Proposal for Celo to transition to an Ethereum L2