By adopting Optimism's technology and utilizing optimistic rollups, Celo can now benefit from Ethereum's security while maintaining low-cost transactions and faster settlement times.

This transition marks the culmination of a nearly two-year migration process, initially proposed by cLabs in July 2023 to enhance scalability and interoperability.

The new protocol features one-second block times and sub-cent transaction costs, allowing Tether's USDt and USDC to be used as gas.

Celo has officially transitioned from a standalone Layer-1 blockchain to an Ethereum Layer-2 network, completing this significant upgrade on March 26, 2025.

Celo's integration into the Ethereum ecosystem is expected to enhance liquidity and security features for users and developers, improving interoperability with minimal adjustments.

The upgrade strengthens Celo's security while ensuring transaction fees remain at just $0.0005.

This migration occurs amid ongoing debates about the necessity of Layer-2 solutions, with other layer-1 projects closely observing Celo's transition.

Marek Olszewski, CEO of cLabs, described the migration as an exciting return home for Celo, combining strengths from both networks to scale Web3 globally.

Despite the successful transition, potential challenges remain, including ensuring long-term network security and exploring alternative revenue streams.

Following the announcement, CELO's price increased by nearly four percent, indicating market optimism about the transition.

Following the hard fork announcement by cLabs, validators paused block production on Celo's Layer-1 network before resuming on the Layer-2 network within two hours.

The new layer-2 network offers enhancements such as faster and cheaper transactions, leveraging Optimism’s OP Stack, a customizable framework for developers.