Celos token drops as Coinbase skips Layer-2 migration support
Celo, a prominent Layer-1 blockchain, has seen its native token dump 5% after its upcoming transition to an Ethereum Layer-2 network within Optimisms Superchain ecosystem turned contentious.
On Nov. 27, Coinbase, the largest US-based crypto exchange, announced that it would not support Celos migration into a Layer 2 network. In contrast, Tethers CEO Paolo Ardoino confirmed the stablecoin issuers continued support for the network post-transition into the Ethereum ecosystem.
Data from CryptoSlate showed that this uncertainty negatively impacted the networks CELO token, which fell 5% to $0.81039 at press time.
Community reaction
These diverging views sparked mixed reactions within the community, with many criticizing Coinbases decision.
Marek Olszewski, CEO of Celos developer cLabs, expressed disappointment with Coinbases stance. He questioned whether this decision might deter other Ethereum Virtual Machine (EVM)-compatible Layer-1 chains from embracing Ethereums Layer-2 scaling solutions.
Meanwhile, the founder of Krakens Inkchain, Andrew Koller, assured that his exchange would support the migration into an L2. He stated:
Kraken and Ink [loves] the superchain and are fully committed to Ethereum scaling and making Kraken work for Celo users. weve asked the relevant teams to explore this to see if we can hit everything in time for Jan. 16th.
Despite the setback, Olszewski suggested the Celo community could consider renaming its existing Layer-1 chain to Celo Gold (CGLD) to accommodate Coinbases current support framework. He hinted that this might simplify future adoption if Coinbase supports the Layer-2 upgrade.
Community urges Coinbase to rethink
EigenLayer founder Sreeram Kannan speculated that Coinbases decision could stem from an oversight rather than outright opposition. He encouraged the exchange to revisit its stance, emphasizing the potential benefits of supporting Celos integration into the OP Stack.
Kannan stated:
I think this is likely an oversight internally in Coinbase. There is no chance the company building the leading Ethereum L2 in users and a core contributor to OP public goods will choose to discontinue supporting Celo after it becomes an OP stack based L2.
On the other hand, Nass Eddequiouaq, the CEO of a16z-funded crypto startup Bastion, highlighted the operational and regulatory complexities exchanges face when adding support for new chains, particularly in the US. He added:
Exchanges and custodian have usually been waiting to see which branch of the fork picks up the activity before adding support for it and deprecating the other one.
The post Celos token drops as Coinbase skips Layer-2 migration support appeared first on CryptoSlate.
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Text source: CryptoSlate
