ENS Labs sets sights on Layer-2 migration to boost scalability and lower fees
ENS Labs has unveiled ENSv2, a major upgrade to the Ethereum Name Service that involves transitioning to a Layer 2 network. The purpose of ENSv2 is to enhance scalability and reduce gas fees by moving core functionalities from the Ethereum mainnet to a Layer 2 chain. This shift is expected to result in lower transaction fees for users.
The specific stack or Layer 2 network for the migration has not yet been decided by ENS Labs. Once chosen, this network will serve as the new platform for user interactions with ENS.
The upgrade also introduces a new hierarchical registry system to better manage .eth domain names. This system will offer improved capabilities for managing subdomains and configuring resolvers.
Nick Johnson, lead developer and founder of ENS Labs, stated that ENSv2 will bring about a hierarchical registry system for .eth name management. Nameholders will have access to a unique name registry, allowing them to manage subdomains and configure resolvers.
ENS primarily provides the .eth name service, which simplifies Ethereum addresses. Over two million .eth names have already been registered on the mainnet.
The ENSv2 upgrade has the potential to enhance multi-chain interoperability, expanding the utility and reach of ENS across different blockchain ecosystems.
ENS Labs highlighted the release of Ethereum Improvement Proposal (EIP) 4844, which made Layer 2 networks more cost-effective through blob transactions, as a significant factor motivating the ENS upgrade.
Eskender Abebe, head of product and strategy at ENS Labs, stated that the release of EIP4844 greatly reduced the cost and increased the scalability of Layer 2 networks based on Ethereum, which played a crucial role in ENS’s proposal.
ENS is among the latest Layer 1 protocols planning to migrate to Layer 2 networks following the Dencun upgrade, which lowered fees throughout the Ethereum ecosystem.
The migration to Layer 2 will be carried out in phases to minimize disruption. The initial phases will focus on changes to the resolution process to ensure a seamless transition. Users will have the option to move their names between the Layer 2 network and the Ethereum mainnet, choosing the optimal balance between cost, security, and functionality.
ENS Labs is seeking additional funding from the ENS DAO to support the development and deployment of ENSv2. The proposal includes a request for an annual budget increase of 4 million USDC, primarily for hiring more developers and covering infrastructure costs.
Following the announcement, the price of ENS increased by over 3% within two hours. However, at the time of writing, the token was trading 5% lower.
ENS Labs has submitted the proposal to the ENS DAO and is currently evaluating Layer 2 networks for the migration.
Read more: Ethereum Name Service, GoDaddy partner to link domain names with crypto wallets.
