Celo Gains Buterin’s Support Amid Plans to Transition to L2

  • Vitalik Buterin endorses Celo as a low-cost network aligned with Ethereum’s goals.

  • Celo plans to shift from an L1 to an L2, enhancing scalability and reducing transaction costs.

  • Their Valora app drives growth in DeFi with near 0 fees and stablecoin-based gas payments.

Vitalik Buterin, the founder of Ethereum, has just pointed out Celo as a potential distributed financial platform. Buterin commended Celo for its low-cost network and congruence with Ethereum’s decentralizing objectives in a post on X. This endorsement aligned with his latest Layer 2 (L2) chain posture, in which he underlined supporting only properly dispersed networks starting in 2025.

This is amazing to see. Improving worldwide access to basic payments/finance has always been a key way that ethereum can be good for the world, and it's great to see @Celo getting traction.

See also their recent posts:

* @Celo becoming an Ethereum L2: https://t.co/08U7G7q69s
*… https://t.co/Qq7vcmZ6e3

— vitalik.eth (@VitalikButerin) September 25, 2024

Celo’s Role in DeFi Services

Primarily due to its Valora app, Celo has gained recognition as a network focused on distributed financial services. Valora lets on-chain activities combine user identity with near-zero charge frictionless fund transfers. Driven by steadycoin payments on Celo, the app—which debuted in 2021—makes transactions as simple as sending a chat message. Notably, recent increases in Celo’s activity are partly due to growth in DeFi and DEX trading.

Celo sets itself apart by enabling gas payments using stablecoins, eliminating the need to purchase ETH or CELO. This feature makes transactions more straightforward and accessible. Celo also boasts far less gas fees than Ethereum. Buterin’s recognition emphasizes Celo’s ability to increase financial service access free from the excessive fees observed on like platforms.

Future Development into a Layer 2 Chain

Per reports, originally a Layer 1 (L1) blockchain, Celo wants to move to an L2 setup. This action would bring it into line with other Ethereum-compatible systems including Base, Arbitrum, and Optimism. Supported by well-known investors including Coinbase Ventures and a16z, Celo raised more than $100 million upon its 2020 release. Turning to L2 would improve Celo’s scalability and help to down transaction costs even more.

The network’s capacity to handle stablecoin transactions has grown, recently surpassing TRON in transaction volume over a short period. Celo supports multiple stablecoins, including a native form of Tether (USDT). While inflows from Ethereum remain limited at $2.96 million, stablecoins account for about 6% of these inflows. The network continues to maintain an active user base, averaging over 820,000 weekly active addresses and more than 176 million accounts overall.

Celo’s Market Performance 

As of this press, Celo (CELO) traded at $0.6249, boosted by the mentions by Buterin. Over the previous week, the asset rose 37.12%, while 24 hours saw a 16.75% growth. Within the same 24-hour span, trading volume came to $99,299,262. Celo’s increasing activity and price growth highlight its expanding role in distributed finance.

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