I have been thinking about Celo and the broader web3 ecosystem’s interest in what does it mean to be “the best stack for Celo’s needs” (though I also didn’t see Celo being compared to a character in an ancient Greek poem on my 2024 bingo card!).
From the initial cLabs proposal onwards, the key goal has always been to analyze the best possible technical stack choices that maximize Celo’s long term ability to be the infrastructure for all projects building and solving real world problems. The Celo Foundation is supporting this important work and partnering with cLabs, especially around the components of the evaluation framework shared earlier that touch on ecosystem and governance. I figured it was worth sharing some of our thoughts here ahead of cLabs gearing up to make its recommendation to the community.
Bankless recently had a great episode (The Ethereum L2 Token Thesis) - I highly recommend giving it a listen and think it succinctly gets to a few key points:
- In the longer run, most L2s should have near-zero fees like Celo today
- In that world, L2s that have the most sustainable transactions win
- L2 value is the difference in the fees earned and the fees paid to the different components of the stack to make it sustainable and user friendly
Considering this perspective, it is critical (ahead of cLabs’ recommendation) to understand the cost (today and in the future) across the different components of the L2 stack, including sequencer fee share arrangements.
Celo is in a strong position given the above framework and at Celo Foundation our focus will remained unchanged: helping builders in our ecosystem launch and grow great applications that drive real world value.
Additionally, since the initial proposal, it has become clearer that - especially in the short- to medium-term - each of the ‘stacks’ looks to create a sort of alliance among participating chains (eg Superchain, Hyperchain). While that has advantages around low cost messaging/bridging, sharing liquidity and sharing the cost of ‘Ethereum security’, it may also come with constraints around the independence of Celo with respect to upgradability and scenarios for exiting such an alliance. In the long term, I would expect these alliances to be subsumed by just one big Ethereum L2 alliance, with shared sequencing and shared block builders providing low cost messaging/bridging across L2s of different stacks.
With that in mind, a few items from the initial evaluation framework stand out to me in particular as being important to consider:
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Positive-sum platform growth opportunities: What are the other members of each alliance, today and tomorrow? What are ways to bring value to each other?
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Roadmap influence: What influence does Celo have both informally and via on-chain voting to shape the roadmap and future of a given alliance? Are there roadmap decisions that could be adversarial for Celo? On the other hand, if cLabs and Celo ecosystem developers end up becoming key contributors to the roadmap, clear contribution incentives (e.g., grants, retroactive funding) need to be determined. Necessary governance voting power can come through either grant arrangements or token swaps.
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Independence within Ethereum: As outlined before, it is important that the Celo community can fix, modify, and extend the codebase that comprises Celo, and that the platform can be maintained and governed in a decentralized manner with minimal constraints. It is our preference to use permissive open-source codebases and to avoid complex licensing arrangements. At the same time, it is also important to the community to continue to evolve and improve Celo governance, as is the case currently with the Public Goods Funding Strategy.
Hope this helps shed some additional light regarding how we at Celo Foundation consider thinking about the economic implications behind the stack selection decision.
The best analogy I can come up with is how one picks a university as a student - say you are great at sports and you are being offered scholarships of various amounts; while that’s one factor in your decision, other important variables such as the curriculum, reputation, location, cost of living, where your friends are going, etc. will all play a role in your ultimate decision coming down to what career you may want to pursue long term and finding success and happiness as a human being in the long run.
Fwiw, I don’t think there are many (any?) precedents for this kind of ‘strategic partnership’ between DAOs/communities, so, as always, any feedback is welcome as progress moves forward on this exciting next step.