Vitalik Buterin announced that Celo’s Alfajores testnet would upgrade to Ethereum L2 on September 26, marking a key advancement in stablecoin use.
Co-founder of Ethereum Vitalik Buterin keeps a close eye on Celo blockchain advancements and has supported a significant milestone in the platform’s use of stablecoins.
On September 25, Vitalik Buterin praised Celo on X for outpacing Tron regarding daily active addresses for stablecoins.
“Watching this is incredible. Enhancing global accessibility to fundamental financial services and payments has consistently been a crucial aspect of Ethereum’s potential benefits to society, and the co-founder of Ethereum expressed his satisfaction with Celo’s growing popularity.
Celo’s Alfajores Testnet to Upgrade to Ethereum L2 on Sept. 26
Vitalik Buterin stated in the post that Celo will be moving from a standalone layer 1 (L1) blockchain that is compatible with the Ethereum Virtual Machine (EVM) to an Ethereum layer 2 (L2).
Through this change, Celo would move from a base blockchain protocol to a third-party protocol designed to enhance network performance and have integrated features with that base blockchain.
Dango, which debuted in July 2024, and Alfajores, which is scheduled to be upgraded to L2 on September 26th, are two of Celo’s two L2 testnets that are presently in operation as part of the L2 transition that was suggested by core Celo developer cLabs in July 2023.
Celo Is Closely Connected With Ethereum Ecosystem
In a statement commemorating the network’s switch to L2, Celo stated, “Our journey from an L1 EVM-compatible chain to an L2 solution represents a major turning point in our continued relationship with the Ethereum ecosystem.”
Celo pointed out that the change will enable several benefits that were before unattainable in terms of connecting Ethereum and Celo, including:
“Becoming an L2 not only aligns Celo more closely with Ethereum’s expansive network but also empowers our community to innovate with greater confidence and reach.”
Referring to Buterin’s May 2024 post headlined “Layer 2s as cultural extensions of Ethereum,” cLabs on September 23 referred to Celo as a “cultural extension” of Ethereum.
Although Celo’s code is derived from Ethereum and retains complete EVM compatibility for smart contracts, it is distinct from Ethereum in several ways, including using blockchain wallets, because Celo runs on a separate blockchain.
Major Stablecoins Like Tether and USDC Integrated Celo Support in 2024
Major stablecoin providers have adopted the Celo blockchain with remarkable vigor in 2024.
In February 2024, Circle, the company behind the second-largest stablecoin, USDC, introduced the first USDC tokens on Celo. Since then, $40 million worth of the stablecoin has been released on Celo, according to official USDC data.
In March 2024, Tether, the biggest stablecoin provider by market capitalization, formally declared the integration of Celo for its Tether stablecoin. As of September 25, $209 million USDT tokens based on Celo were in circulation, according to Tether Transparency.
This amounts to 0.18% of the total USDT in circulation in Tether.
In September 2024, Celo outperformed Tron regarding daily active addresses for stablecoin usage, according to blockchain statistics company Artemis.xyz.
According to Artemis’ experts, stablecoin’s popularity has increased dramatically as a result of apps like Valora and Minipay. By July 2024, Minipay alone, which debuted in 2023, had accumulated 3 million active wallets.