Key Insights:
- Vitalik Buterin supports Celo for overtaking Tron in stablecoin addresses, highlighting Celo’s growing role in the blockchain ecosystem.
- Celo’s upcoming upgrade to Ethereum Layer 2 enhances its scalability and strengthens ties with Ethereum, marking a new chapter for the platform.
- Major stablecoins like USDC and Tether have integrated with Celo, contributing to its rapid growth in daily active addresses over Tron.
Ethereum co-founder Vitalik Buterin recently recognized Celo for surpassing Tron in the number of daily active addresses using stablecoins. Buterin expressed his support on X on September 25, noting that Celo’s progress reflects Ethereum’s broader mission to enhance global access to basic financial services.
Buterin believes Celo’s approach to expanding financial accessibility aligns well with Ethereum’s core values.
“This is amazing to see. Improving worldwide access to basic payments and finance has always been a key way for Ethereum to be good for the world, and it’s great to see Celo getting traction,” Buterin stated.
His endorsement reflects the increasing synergy between Celo and the Ethereum ecosystem.
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 Alfajores Testnet Upgrade to Ethereum L2
Celo is set to undergo a major transition as its Alfajores testnet will be upgraded to an Ethereum Layer 2 (L2) solution on September 26. This move marks a pivotal shift for Celo from a standalone Ethereum Virtual Machine (EVM)-compatible Layer 1 (L1) blockchain to a protocol directly integrated with Ethereum’s network.
This transition is part of Celo’s broader strategy to enhance its capabilities by connecting more closely with Ethereum. Core Celo developer cLabs proposed this shift in July 2023, leading to the operation of two L2 testnets: Alfajores and Dango.
Dango was launched in July 2024, while Alfajores is expected to complete its upgrade to L2 shortly. This development will enable Celo to function more efficiently as part of the Ethereum ecosystem, offering enhanced scalability and functionality.
Strengthening Ties Between Celo and Ethereum
The upcoming upgrade aligns with Celo’s ongoing efforts to deepen its integration with Ethereum. The blockchain’s shift to an L2 solution will allow it to leverage Ethereum’s extensive network while providing Celo’s community with improved tools for innovation. Celo stated that becoming an L2 will not only align it more closely with Ethereum but also empower its community to explore new opportunities with greater confidence.
The planned transition signifies more than just a technical upgrade; it represents Celo’s evolution within the Ethereum framework. As noted by cLabs, Celo shares a cultural and technical lineage with Ethereum but operates independently, maintaining full EVM compatibility while offering distinct features, such as unique wallet functionalities. The integration of major stablecoins like Tether (USDT) and USDC further illustrates Celo’s growing importance within the Ethereum ecosystem.
Growing Stablecoin Adoption on Celo
Celo’s blockchain has seen increased adoption of stablecoins throughout 2024, driven by significant integrations with major operators. In February 2024, Circle launched USDC on Celo, adding to the blockchain’s growing stablecoin ecosystem. Since then, the supply of USDC on Celo has reached $40 million, reflecting a steady increase in usage. Additionally, Tether integrated its USDT stablecoin onto Celo in March 2024, with over $209 million in Celo-based USDT tokens circulating as of September 25.
These integrations highlight Celo’s expanding role in the stablecoin market, positioning it as a key player alongside more established platforms. Data from blockchain analytics provider Artemis.xyz shows that Celo surpassed Tron in daily active addresses for stablecoin usage in September 2024.
@Celo recently passed @trondao in daily active addresses for stablecoin usage.
-What's behind this meteoric rise?
-Is Africa undergoing a stablecoin breakout?A 🧵 pic.twitter.com/6Xn8CF6DfO
— Artemis (@artemis__xyz) September 16, 2024
Analysts attribute this growth to the impact of applications like Minipay and Valora, which have driven increased user engagement. Minipay alone recorded 3 million activated wallets by July 2024, underscoring the platform’s rapid adoption.
Celo’s transformation into an Ethereum Layer 2 solution is expected to strengthen its position in the blockchain sector further. By aligning more closely with Ethereum, Celo aims to provide enhanced network capabilities and improved access to decentralized finance solutions. The transition represents a strategic move to harness the benefits of Ethereum’s expansive network while maintaining its unique features as an independent blockchain.
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