Polygon Labs, a leading provider of blockchain development tools and infrastructure, has announced a new initiative to support Celo, a mobile-first platform that aims to make financial tools accessible to anyone with a smartphone. Polygon Labs proposes to facilitate Celo’s migration to Ethereum Layer 2, a scaling solution that enables faster and cheaper transactions on the Ethereum network, by using its Core Development Kit (CDK).
The CDK is a set of tools and libraries that simplifies the development and deployment of blockchain applications on Polygon, an Ethereum-compatible Layer 2 network that offers high scalability, security and interoperability. The CDK allows developers to easily create custom chains, bridges, validators, oracles and other components for their blockchain projects.
By using the CDK, Polygon Labs claims that it can help Celo achieve its vision of creating a more inclusive and accessible financial system for the billions of people who are underserved by traditional institutions. Celo’s platform leverages phone numbers as public keys, enabling users to send and receive digital currencies and access decentralized applications (DApps) with just their mobile devices. Celo also has its own native stablecoin, cUSD, which is pegged to the US dollar and can be used for remittances, payments, savings and other use cases.
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However, Celo faces some challenges in scaling its platform and reaching mass adoption. As a Layer 1 blockchain that runs on a proof-of-stake consensus mechanism, Celo has limited throughput and high gas fees compared to Ethereum Layer 2 solutions. Moreover, Celo is not fully compatible with Ethereum, which means that it cannot benefit from the rich ecosystem of DApps, developers and users that exist on the world’s largest smart contract platform.
Polygon Labs believes that by migrating Celo to Ethereum Layer 2 using its CDK, it can solve these problems and unlock new opportunities for both platforms. Polygon Labs says that it can enable Celo to achieve higher scalability, lower costs and greater interoperability with Ethereum, while preserving its unique features and values. Polygon Labs also says that it can help Celo tap into the growing demand for Layer 2 solutions among Ethereum users and developers, who are looking for ways to overcome the limitations of the congested and expensive Layer 1 network.
Polygon Labs has already demonstrated its expertise and experience in building bridges and integrations between different blockchain platforms. It has successfully launched several products and services that connect Polygon with Ethereum, Bitcoin, Binance Smart Chain, Polkadot and other networks. Polygon Labs has also partnered with various projects and protocols in the blockchain space, such as Chainlink, Aave, SushiSwap, Decentraland and more.
Polygon Labs says that it is excited to collaborate with Celo and support its mission of creating a more open and fair financial system for everyone. Polygon Labs invites Celo developers and community members to join its Discord channel and Telegram group to learn more about its proposal and provide feedback. Polygon Labs also encourages other projects and protocols that are interested in migrating to Ethereum Layer 2 or building on Polygon to reach out to its team and explore the possibilities of using its CDK.
Tether increase stablecoin loans to $5.5 billions
Tether, the company behind the largest stablecoin by market capitalization, has announced that it has increased its total loans to $5.5 billion as of September 2023. This is a significant growth from the $2.8 billion reported in June 2021, and reflects the increasing demand for stablecoins in the crypto market.
Stablecoins are digital tokens that are pegged to a fiat currency or a basket of assets and aim to provide stability and liquidity for traders and investors. Tether, which is backed by US dollars and other reserves, is the most widely used stablecoin in the world, with a market cap of over $70 billion.
Tether’s loans are part of its transparency efforts, which allow third-party auditors and regulators to verify its reserves and operations. According to Tether, its loans are fully collateralized and compliant with the relevant laws and regulations. The loans are also beneficial for the borrowers, who can access low-cost and flexible financing options using Tether as collateral.
Tether’s Chief Financial Officer, Giancarlo Devasini, said in a press release: “We are proud to report that our loan portfolio has grown significantly in the past year, as more and more customers recognize the value and convenience of using Tether as a stablecoin and a collateral. We are committed to providing the highest level of transparency and compliance for our products and services, and we look forward to continuing to serve the crypto community with our innovative solutions.”