What happens when Celo becomes an ETH layer 2?
Celo becomes an ETH layer 2, there could be potential challenges to consider:
1. Centralization Concerns: If Celo becomes heavily reliant on Ethereum as a layer 2 solution, there may be concerns about centralization. Ethereum’s network would have significant influence over Celo’s operations, potentially undermining the decentralized nature that Celo aims to maintain.
2. Technical Dependencies: Depending on the extent of integration, Celo’s functionalities and operations would be tied to the stability and performance of the Ethereum network. Any technical issues or vulnerabilities in Ethereum could impact the reliability and availability of Celo as an ETH layer 2 solution.
3. Network Congestion: While becoming an ETH layer 2 could alleviate scalability issues, it could also lead to increased network congestion on both Celo and Ethereum. As more transactions flow through the integrated system, there may be challenges in maintaining fast and cost-effective transactions for users.
4. Governance Challenges: Integrating Celo as an ETH layer 2 would require alignment of governance structures, consensus mechanisms, and decision-making processes. Navigating these complexities and ensuring effective governance between the two networks could pose challenges and potentially slow down decision-making processes.
5. Limited Flexibility: Depending on the specifics of the integration, Celo may face limitations in implementing its own unique features and upgrades. It would need to conform to the rules and limitations of the Ethereum layer 2 solution, potentially hindering Celo’s ability to innovate and differentiate itself.
6. Community Fragmentation: Integrating with Ethereum as a layer 2 solution may result in fragmentation within the Celo community. Some community members may have concerns or preferences that differ from the integration strategy, leading to potential divisions or disagreements within the community.
Or in another words, the team is changing their direction from Layer 1 to Layer 2.
Isn’t it a white flag from CELO to ETH in the smartcontract industry?
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