cLabs Proposal for Celo to transition to an Ethereum L2

How does this decision impact Celo’s roadmap goal of becoming the fastest L1 EVM chain? This was also listed in Celo’s press release just weeks prior to this L2 switch announcement(gingerbread hard fork announcement), so some clarity on Celo being the fastest (as far as EVM compatibility goes) and where the company is at with that, and the Mysten labs collaboration would be much appreciated.

Beautiful timing for some buzz for Celo around EthCC, and the most positive social engagement on the future of Celo I’ve seen for a long time.

Fully support this proposal as it treads some new ground the ecosystem hasn’t battle tested yet (decentralized sequencers for example).

I was actually thinking recently about suggesting something for Celo closer to what Gnosis Chain (formerly xDAI) have done - essentially backported into the current post-merge Ethereum stack. Has a lot of positives doing it this way (client diversity for one, I’ve been feeling uneasy about Celo geth maintenance recently) but ultimately would leave Celo in a similar state: a L1 alt-EVM chain. So the OP proposal here is a step up, although a lot more work.

In terms of this as a “proposal”, given the amount of media this week, it would be kind of crazy for this not to go ahead. Will this actually be a true vote or are cLabs just going to start development and get this shipped?

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Hey @pedrosa.eth, thanks for the input. We agree that the level of fees seen on most L2s right now wouldn’t work for a number of important use cases and services on Celo. We’re hopeful that off-chain Data Availability via EigenDA should make this viable, although it’s early and a lot of details here need to be researched and ironed out.

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Appreciate your thoughts…

In terms of this as a “proposal”, given the amount of media this week, it would be kind of crazy for this not to go ahead. Will this actually be a true vote or are cLabs just going to start development and get this shipped?

I agree! But media coverage is one thing, and support from devs and validators committed to and building on Celo is a little different. cLabs really wants to get as much input and buy-in from the community as possible, to make sure time we spend on the project ends up building the right thing and is ultimately accepted via governance and by validators during hard forks.

Also, as you note, it could be a lot of work and not something that’s going to be finished in a few months.

As the role of validators is becoming “sequencers”, although many things will stay the same, working closely together with the validator community and getting their early support is super important.

We hope to use both the governance call tomorrow (21st July), a follow-on ‘temperature check’ on-chain governance proposal without any payload, and then subsequent discussion here to double check we’ve got this buy in from everyone.

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High throughput is still very important and still a goal for cLabs’ work. I think there’s still a lot of work to do here. There are a number of ways of achieving significant throughput gains and some involve big changes to consensus, parallel execution, etc. With this proposal, the goal doesn’t change, I think, but how we get there and in what order might, from the perspective of making this a tractable engineering project. Also the role of a decentralized L2 sequencer set is a little different from a decentralized L1 validator set, and we want to make sure long-term designs fit the L2 needs.

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Appreciate the proposal after what feels like a long stretch of radio silence. I had to go back and read @Yaz 's post on moving Celo to an L2 on Celestia (right when he jumped ship to Celestia) to see if he had a crystal ball back then. I’ve concluded that he doesn’t, and while I believe this is the right move now, it wasn’t the right move then (Celestia questions aside).

I put some more thoughts together here:

TL;DR: excited, supportive. Long road ahead but this will be fun.

DC

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Thanks for the response Tim. Is that goal still something that’s being aimed to be achieved in the 2023 roadmap or is it looking like a longer term endeavor at this point?

The temperature check governance proposal is live!

Please have your say! You can vote via your favorite wallets including Celo Terminal, Celo Wallet, and celocli.

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I don’t know that scalability is ever achieved! cLabs is looking at throughput both in the near term (weeks and months, i.e 2023) and in the long-term (months and years)… For the former it’s about prioritizing it alongside other work e.g L2 testnet – and for the latter it’s about really understanding the details of the L2 roadmap to make the best long-term design decisions for scalability there.

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you can also vote (if you have stCelo) thru https://app.stcelo.xyz/governance

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We are working on increasing throughput currently already, and hope to deliver some of that work already in 2023. So yes, an increase in throughput should be achieved already this year. However, this would not be based on a Mysten collab, it is rather work from the cLabs blockchain team

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Finally I finished reading this proposal, great comments and inputs of the community. :partying_face:

I am just leaving some important links here for visibility and transparency with the community (@tim already posted someones) :eyes::

Love to see this proposal moving forward and the best of this proposal is to get two communities together working for the same goals. :raised_hands:

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Hello Celo community and cLabs team! We at the Optimism Foundation are really excited at the prospect of this proposal. Unsurprisingly, we agree that building as an Ethereum L2 could accelerate Celo’s mission. We’re optimistic (:wink:) that the real-world, human-centric ethos of your community will continue to benefit the Ethereum movement at large.

We’re also happy to see you choose the OP Stack to build with, and your proposed improvements are super exciting. As such, we’d like to point out some of the positive-sum ways we can collaborate. The OP Stack is an MIT-licensed public good, and we will always defend your right to do whatever you wish with it–but, if we practice good mutual modularity, we can all benefit from shared improvements and avoid redundant work.

The modular sequencing interfaces for the OP Stack are in active research and development. We currently have an active Request for Proposals to build an MVP of leader election in the OP Stack, and have accepted one proposal by the Espresso team to date. This milestone is only for a round-robin sequencing scheme, but the goal is to produce a generalized inbox and batching interface which could easily integrate solutions like Celo’s pBFT. We would encourage your communication/collaboration with the Espresso team as they work on their proposal, and welcome sharing any learnings from your own efforts.

We have similar plans for alternative data availability providers–though this is not at the stage of public RFP, our thinking is progressing rapidly and we’ll have more to share in the coming months. There’s a lot we, and the broader community, can learn from your approach to alt-DA. We’d love to leverage your expertise, collaborate on the process, and hopefully create standards for additional projects in the Optimism Collective to build from.

Thanks again–we’re looking forward to keeping the conversation open as your work progresses, and to a bright future together. :sparkles::red_circle::red_circle::sparkles:

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Overall, I was very excited to hear this initial proposal. It has been in the back of my mind over the last couple of years that a blockchain network is greater than just the innovative tech it lives on. While the original design and assumptions were very forward-thinking at the time, the industry grows and develops rapidly. A lot has changed since the original outline, and we were seeing Celo start to move away from where the industry is headed in general. Now is the time to regather and move ship. The approach outlined at a high level shows pragmatism and maturity, allows the community to contribute to the broader crypto ecosystem, reinvigorates the community and invites others to join in the mission of prosperity for all.

I am forever grateful for Celo and the community it fostered. It allowed me to work, learn and grow through relationships and opportunities it gave me. There are fond memories of participating in the great Celo stake off prior to genesis, where even novices like myself at the time could leverage the support of professionals through the mentor-mentee aspect of the incentivized testnet.

With that said one item that I hope we consider when developing the design of a decentralized sequencer is to incorporate mechanisms that incentivize and allow for small independent validators to be involved. Without having done a lot of research into the designs that are being worked on of decentralizing sequencers, it seems intuitive that using Ethereums security vastly decreases the need for a large validator/sequencer (not sure the term has been coined yet) set on a given rollup chain due to the operational cost to maintain that large set.

I fear that with the scope of this proposal being intentionally vague due to the amount of research involved in developing the final specs. Although it outlines bringing the current validators with the community, we may end up seeing a much smaller set providing a decentralized validators/sequencers mainly of the larger well known businesses in the industry for both a brand and optics perspective. Other members in the Celo validator set and I are part of an initiative that advocates for decentralization within the staking sector(Staking Defense League), and I wanted to, at the very least add a perspective from an independent validator(TPT) who is grateful for the support Celo has given this far. BUT hopefully, to help and ensure that Celo keeps these grassroots opportunities open for passionate individuals who are not part of a large, well-known business.

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Hey everyone,

Ross here from a16z. First, we are excited to see the introduction of this proposal. For nearly all EVM chains, migrating underneath Ethereum offers strong upside incentives with little downside given the current technical progress of Layer 2 scaling infrastructure. We think this is the right big-picture decision for Celo and we’ve backed that belief by casting a substantial yes vote on-chain for Proposal 116. Celo now stands at the forefront of L2 decentralization. If carried out effectively, Celo’s L2 transition will shape the way all subsequent L2s think about decentralization and incentive alignment.

The migration to a Layer 2 (L2) design comes with a multitude of benefits. The security offered by anchoring state to Ethereum mainnet, coupled with connectivity to the broader Ethereum ecosystem, provides massive incentives for this migration. We anticipate that other EVM chains will follow this trend with similar proposals in the foreseeable future. Assuming proper implementation, the Optimistic Rollup (ORU) and off-chain Data Availability (DA) layer design choice will provide robust security guarantees while maintaining low transaction fees for end users.

While this proposal serves as an excellent introduction to the shift towards Ethereum, it is important to note that there is still a significant amount of research and development to be conducted before the transition can occur. During this period, the community could consider some foundational questions that all L2s are grappling with. These questions primarily revolve around token utility, revenue generation, and revenue allocation:

  1. Revenue Generation
  • How will revenue be generated in the L2 stack? In this context, revenue is loosely defined as “economic value captured at the protocol level.” We see two primary potential sources as 1) fees derived from user transactions and 2) internalized MEV. Source #1 is an umbrella category covering any value capture that could broadly be defined as “the purchase of block space.” Nested within revenue source #1 is developers building L3s on top of Celo’s L2 and having the L2 provide DA, security, and interoperability. Are we missing anything here?
  1. Revenue Accrual
  • Where does revenue accrue to in the L2 stack?
  • Does the off-chain DA layer design complicate this question beyond that of a rollup with on-chain DA? i.e. does the DA layer add another potentially independent entity to the stack.
  1. Sequencer Design Choices
  • How will Celo’s sequencer set integrate with the broader L2 ecosystem, given the plan to transition Celo’s current consensus protocol and validator set over?
  • Will Celo lack shared sequencing with other major L2s and thus lack the desirable attributes imbued by shared sequencing?
  • If so, are there any potential benefits to this?
  1. MEV Capture
  • Who will capture MEV on L2s long-term and how prevalent will it be vs. L1?
  • Can this MEV be captured and allocated back to Celo in accordance with its goals? Should it be?
    • All decisions related to the distribution of revenue are inherently political decisions. Who precisely within the Celo ecosystem should MEV be allocated to? e.g. users, developers, DAOs, CELO holders, sequencers, foundations, etc.
    • How should those allocation decisions be made?
  • How different does MEV look for Celo if the rollup lacks shared sequencing? For off-chain vs. on-chain DA?

All of the above questions drive towards a core issue facing all L2s: The long-term incentive alignment of the L2 stack is unclear. While many teams and individuals in the sequencer space are making strides in addressing these questions, we believe that they remain largely unresolved at present. Wrestling with these questions now matters, because the implementation choices that different L2s make based on their answers to these questions could lead to materially different outcomes as more economic value accrues to fully decentralized L2s. Celo’s potential position as the first L2 to decentralize its sequencer set provides an opportunity to get these questions right and define a path forward for other L2s to follow.

If you have ideas on the above questions or want to chat individually on L2 incentive alignment, I’m always available in the forums here or on Twitter @rossshuel.

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Thanks for posting to the forum Ross and for your support on this journey!

As folks are coming back up for air after the current conference marathon, will be great to continue to discuss the roadmap for the transition including some of the open questions around non-technical considerations. :raised_hands:

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Hey Guys, this is Sandeep from Polygon. We just posted the proposal for Celo to become Eth L2 using Polygon CDK. We would love Celo community to check this out

https://forum.celo.org/t/polygon-labs-proposal-for-celo-to-become-an-eth-l2-using-polygon-chain-development-kit-cdk/65769

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We have been receiving questions from various developers building on Celo about what the Celo transition to an Ethereum L2 means for them - just wanted to post an additional short clarification here, so we can link to that in different discussions:

TLDR, from a developer’s perspective the upgrade of Celo to an L2 should work as any hard fork - meaning that changes are done in the client, and for DApps deployed on Celo things should work seamlessly as before.

Hope that helps!

We have received a few detailed questions from the Aave community, who are in the process of deploying on Celo, and naturally the above statement holds true for the Aave DApp as well. We’re super excited for your deployment and are looking forward to seeing you go live soon!

PS One additional related detail, not relevant here but for folks interested: the originally introduced envelope function will be deprecated at the time of the L2 upgrade, however, an updated version of that envelope function (which will be available on the L2 as well) is already live (introduced with the recent Gingerbread hard fork). All of these changes are only relevant for gas payments in other tokens than CELO (details here).

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Wow love the Idea AAVE deploying on Celo :raised_hands:

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