Celo Transitions to Layer 2 to Combine with Ethereum

Exercise on Celo, a layer 1 blockchain supporting decentralized purposes (dapps), has been intensifying recently.

Exercise on Celo, a layer 1 blockchain catering to decentralized functions (dapps), has been ramping up recently. At the beginning of July, the number of daily transactions crossed the 1 million mark for the first time in 2024. Towards the end of 22023, Celo saw a short-term spike in transaction count, reaching a high of 13 million — the highest on record.

Meanwhile, the number of daily active users peaked earlier in July at over 716,000, according to data from Token Terminal.

Data from Celo’s official explorer shows that June was the best month in terms of active users so far, but July might be set to update the record.

Celo is a layer 1 blockchain network and ecosystem specializing in mobile-first dapps and smart contracts. In addition to its mainnet, it also provides various SDKs and tools for integrating its blockchain network, targeting financial applications.

The network was quite active in decentralized finance (DeFi) during its 2021 growth spurt, but it has lost significant traction since then. Its total value locked (TVL) has dropped from around $1 billion in October 2021 to about $100 million at the time of writing.

The most active DeFi apps on Celo are multi-chain dapps, suggesting that Celo’s native ecosystem is weak compared to other established chains. The top three largest DeFi apps on Celo are Mento, Uniswap, and Curve DEX.

Celo Transitions to Layer 2 to Integrate with Ethereum

In order to boost its presence in DeFi, Celo is seeking methods to integrate with Ethereum.

On July 7, Celo unveiled its native scaling solution for Ethereum called Dango. Currently in testnet mode, the layer 2 network will become Celo’s flagship network.

The Celo community voted to gradually transition from its current layer 1 format to a more efficient Ethereum layer 2 network, competing with the likes of Base, Optimism, Arbitrum, or Blast.

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