ENS Labs Proposes Layer-2 Expansion for Ethereum Name Service

On May 28, ENS Labs proposed that the Ethereum Name Service expand to include Layer 2 scaling protocols in an effort called “ENSv2.”

“We're not just migrating the core parts of the ENS protocol,” the team said in a blog post, before adding that it's taking knowledge from the past seven years on the Web3 frontier, with the goal of “reimagining the architecture from the ground up.”

Introducing ENSv2: The next generation of ENS 🎉🎉🎉

ENS Labs is pleased to announce our proposal to extend the ENS protocol to a Layer 2 network. This step is not just about migrating parts of the protocol; We are reimagining architecture from the ground up! pic.twitter.com/3xM6owTpKk

— ens.eth (@ensdomains) May 28, 2024

Ethereum domains are faster and cheaper

The team stated that Ethereum Name Services contains millions of registered .eth names and thousands of integrations, including decentralized applications, wallets, top-level domains, and browsers.

By expanding to Layer 2, ENS will become easier and cheaper to use for a wider range of users. However, ENS Labs has not yet identified a specific Layer 2 network for relaying.

The primary goals of the expansion, which were contemplated in July 2023, are to make ENS more decentralized, enable new use cases and integrations, and overcome the limitations of the Ethereum mainnet.

Furthermore, moving to Layer 2 offers some key benefits, including lower gas fees for registering and renewing .eth names, more control and customization through a hierarchical registration system, and improved cross-chain interoperability by linking .eth names across networks.

“The release of EIP-4844 has made Ethereum-based Layer 2 networks significantly less expensive and scalable, which was a big driving factor for ENS’s proposal,” said Eskinder Abebe, Head of Product and Strategy at ENS Labs.

ENS Labs will put forward an executable proposal to request an annual budget increase of 4 million USDC from the ENS DAO to hire additional developers and cover infrastructure costs related to development and deployment. The proposal was put forward discussion on the ENS DAO before the ruling is voted on.

The Layer 2 ecosystem recently reached an all-time high total value of $47.7 billion, coinciding with the ETH price pump, According to to L2beat.

ENS price forecast

The native Ethereum Name Service token did not respond to the announcement and was trading flat during the day at around $26 at the time of writing.

The price of ENS has almost doubled over the past two weeks. However, it rose from around $14 in mid-May to reach a three-month high of just under $28 earlier this week.

The price of ENS rose to $80 when it was distributed to domain holders in November 2021 but is still down 69% from that peak.