Celo's token drops as Coinbase skips Layer-2 migration support

Celo, a distinguished Layer-1 blockchain, has seen its native token dump 5% after its upcoming transition to an Ethereum Layer-2 community inside Optimism’s Superchain ecosystem turned “contentious.”

On Nov. 27, Coinbase, the biggest US-based crypto change, introduced that it will not help Celo’s migration right into a Layer 2 community. In distinction, Tether’s CEO Paolo Ardoino confirmed the stablecoin issuer’s continued help for the community post-transition into the Ethereum ecosystem.

Knowledge from CryptoSlate confirmed that this uncertainty negatively impacted the community’s CELO token, which fell 5% to $0.81039 at press time.

Group response

These diverging views sparked blended reactions throughout the group, with many criticizing Coinbase’s determination.

Marek Olszewski, CEO of Celo’s developer cLabs, expressed disappointment with Coinbase’s stance. He questioned whether or not this determination would possibly deter different Ethereum Digital Machine (EVM)-compatible Layer-1 chains from embracing Ethereum’s Layer-2 scaling options.

In the meantime, the founding father of Kraken’s Inkchain, Andrew Koller, assured that his change would help the migration into an L2. He stated:

“Kraken and Ink [loves] the superchain and are absolutely dedicated to Ethereum scaling and making Kraken work for Celo customers. we’ve requested the related groups to discover this to see if we will hit every little thing in time for Jan. sixteenth.”

Regardless of the setback, Olszewski suggested the Celo group may think about renaming its present Layer-1 chain to “Celo Gold (CGLD)” to accommodate Coinbase’s present help framework. He hinted that this would possibly simplify future adoption if Coinbase helps the Layer-2 improve.

Group urges Coinbase to rethink

EigenLayer founder Sreeram Kannan speculated that Coinbase’s determination may stem from “an oversight” moderately than outright opposition. He inspired the change to revisit its stance, emphasizing the potential advantages of supporting Celo’s integration into the OP Stack.

Kannan said:

“I feel that is probably an oversight internally in Coinbase. There isn’t any probability the corporate constructing the main Ethereum L2 in customers and a core contributor to OP public items will select to discontinue supporting Celo after it turns into an OP stack based mostly L2.”

Then again, Nass Eddequiouaq, the CEO of a16z-funded crypto startup Bastion, highlighted the operational and regulatory complexities exchanges face when including help for brand new chains, significantly within the US. He added:

“Exchanges and custodian have normally been ready to see which department of the fork picks up the exercise earlier than including help for it and deprecating the opposite one.”