Ethereum co-founder Vitalik Buterin, who is following developments on the Celo blockchain, endorsed a recent milestone in the use of stablecoins on the platform.
Buterin took to X on Sept. 25 to praise Celo for surpassing Tron in daily active addresses for stablecoins.
“This is amazing to see. Improving worldwide access to basic payments and finance has always been a key way that Ethereum can be good for the world, and it’s great to see Celo getting traction,” he said.
Source: Vitalik Buterin
Celo’s Alfajores testnet to upgrade to Ethereum L2 on Sept. 26
In the post, Buterin mentioned that Celo is set to transition from a standalone Ethereum Virtual Machine (EVM)-compatible layer-1 blockchain to an Ethereum layer 2.
The transition would mark Celo’s shift from a base blockchain protocol to a third-party protocol that is built to improve network capabilities and have integrated functionality with the base blockchain.
As part of Celo’s L2 shift, proposed by core Celo developer cLabs in July 2023, Celo is currently operating two L2 testnets, including Dango, which launched in July 2024, and Alfajores, which is expected to be upgraded to L2 on Sept. 26.
Celo is closely connected with the Ethereum ecosystem
“Celo’s evolution from an L1 EVM-compatible chain to an L2 solution marks a significant milestone in our ongoing relationship with the Ethereum ecosystem,” Celo said in a post dedicated to the network’s shift to L2.
The shift will bring a number of benefits in terms of bridging Celo and Ethereum, which were not previously possible, Celo noted, adding:
“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.”
On Sept. 23, cLabs described Celo as a “cultural extension” of Ethereum, referring to Buterin’s post in May titled “Layer 2s as cultural extensions of Ethereum.”
While Celo’s code has shared ancestry with Ethereum and maintains full EVM compatibility for smart contracts, it differs from Ethereum in several areas, including blockchain wallets, as Celo exists on an independent blockchain.
Major stablecoins like Tether and USDC integrated Celo support in 2024
The Celo blockchain has seen a significant surge in adoption by major stablecoin operators in 2024.
Circle, the operator of the second-largest stablecoin, USD Coin (USDC), launched the first USDC tokens on Celo in February. The stablecoin has since amassed $40 million in supply issued on Celo, according to the official USDC data.
Related: Tether USDT’s market share rises 20%, reaching 75% in two years
Tether, the largest stablecoin operator by market cap, officially announced Celo integration for its USDt (USDT) stablecoin in March. According to Tether Transparency, there are $209 million Celo-based USDT tokens in circulation as of Sept. 25.
The amount accounts for 0.18% of Tether’s total USDT in circulation.
Celo-based Tether (UDST) in circulation. Source: Tether Transparency
According to the blockchain data provider Artemis.xyz, Celo surpassed the Tron blockchain in terms of daily active addresses for stablecoin usage in September 2024.
Artemis’ analysts suggested that apps like Minipay and Valora significantly contributed to the rise of stablecoin adoption. After launching in 2023, Minipay alone amassed 3 million activated wallets by July 2024.
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