ENS Labs has unveiled ENSv2, a significant upgrade to the Ethereum Name Service (ENS), aimed at improving scalability and reducing gas fees by migrating to a Layer 2 network. This strategic move is set to enhance user experience by lowering transaction costs and increasing efficiency.
The Shift to Layer 2
The ENSv2 upgrade involves moving core functionalities from the Ethereum mainnet to a Layer 2 chain. ENS Labs has yet to choose the specific Layer 2 network or stack for this migration, but the selected network will become the new platform for user interactions with ENS. This transition promises to reduce transaction fees significantly for users.
Hierarchical Registry System
One of the key features of ENSv2 is the introduction of a hierarchical registry system. This new system will allow better management of .eth domain names, providing enhanced capabilities for managing subdomains and configuring resolvers. According to Nick Johnson, lead developer and founder of ENS Labs, “ENSv2 will introduce a hierarchical registry system to .eth name management. Nameholders will have access to a unique name registry, where they will be able to manage subdomains and configure resolvers.”
Benefits of the Upgrade
ENS primarily offers the .eth name service, which simplifies Ethereum addresses. With over two million .eth names registered on the mainnet, the ENSv2 upgrade aims to further broaden its utility and reach across various blockchain ecosystems. The upgrade is motivated by the release of Ethereum Improvement Proposal (EIP) 4844, which made Layer 2 networks more affordable and scalable through blob transactions. Eskender Abebe, head of product and strategy at ENS Labs, highlighted this factor, stating, “The release of EIP4844 has made Layer 2 networks based on Ethereum vastly more affordable and scalable, which was a big driving factor for ENS’s proposal.”
Phased Migration Approach
To minimize disruption, the migration to Layer 2 will be phased. Initial phases will focus on changes to the resolution process to ensure a smooth transition. Users will have the flexibility to move their names between the Layer 2 network and the Ethereum mainnet, allowing them to choose the optimal balance between cost, security, and functionality.
Funding and Development
To support the development and deployment of ENSv2, ENS Labs is seeking additional funding from the ENS DAO. The proposal includes a request for an annual budget increase of 4 million USDC, primarily to hire more developers and cover infrastructure costs. ENS Labs has submitted the proposal to the ENS DAO and is currently evaluating Layer 2 networks for the migration.
Community Involvement and Decision Making
The ENS DAO will play a crucial role in deciding the future of ENSv2. The community is invited to deliberate on the proposed migration and its implementation. ENS Labs plans to expand to either its own custom Layer 2 network or an existing public one, with the goal of lowering gas costs and increasing transaction speeds. “We believe that now is the right time for us to begin moving parts of ENS, such as .eth name registration, to L2,” stated ENS Labs in a post on X.
Strategic Selection of Layer 2 Network
ENS Labs has developed a framework to select the ideal Layer 2 network, focusing on key requirements such as Ethereum Virtual Machine (EVM) compatibility, decentralization, censorship resistance, and open-source technology. This selection process aims to ensure a robust and efficient migration.
Impact on the Crypto Ecosystem
The proposed migration aligns with a broader trend among Layer 1 protocols planning to migrate to Layer 2 networks following the Dencun upgrade, which lowered fees across the Ethereum ecosystem. This move by ENS Labs is expected to set a precedent for other projects considering similar upgrades.
The ENSv2 upgrade represents a significant step forward for the Ethereum Name Service, promising enhanced scalability, reduced fees, and improved user experience. As ENS Labs and the community work together to implement this migration, the future of ENS looks promising, with the potential for greater interoperability and utility across the blockchain ecosystem.
