ENS Labs has just announced a significant strategic shift for the Ethereum Name Service (ENS) ecosystem, deciding to discontinue development of its specialized Layer 2 solution called Namechain. Instead, the upgraded ENSv2 version will be deployed entirely on the Ethereum Primary Network , marking a notable change in how the project shapes the future of the ETH blockchain domain name service.
This decision stems from the remarkable advancements in Ethereum's scalability in recent times. According to ENS Chia -founder Nick Johnson, the cost of registering an ENS domain name has plummeted by 99% in the past year. Simultaneously, Ethereum's gas limit has been raised from 30 million to 60 million by 2025, significantly increasing transaction throughput. These improvements make Ethereum Layer 1 a superior choice compared to building and operating a separate Layer 2 system, which requires substantial technical resources and operating costs.
ENSv2 is XEM a significant upgrade to the ENS protocol, a platform that allows users to replace long and complex Ethereum wallet addresses with more memorable domain names in the ETH format. This feature plays a core Vai in improving the Web3 user experience, especially in the context of the growing need for on-chain identity verification.
Previously, in 2024, ENS Labs announced plans to develop Namechain – a rollup using zero-knowledge technology to optimize costs and speed for ENS domain name registration, renewal, and update operations, as well as blockchain identity management. At that time, Ethereum Layer 1 still had relatively high transaction costs, making many simple ENS related operations potentially cost tens of dollars, creating a significant barrier for average users.
However, when comparing the effectiveness of maintaining a separate Layer 2 and the rapid growth of Ethereum, the ENS team realized that the economic and technical equation had completely changed. Continuing to develop Namechain no longer offered a clear advantage, while deploying ENSv2 directly on Ethereum allowed the project to fully leverage the security and reliability of the original network.
This announcement also comes amidst a notable shift in Ethereum's scaling strategy. Ethereum founder Vitalik Buterin recently stated that Ethereum's Layer 1 is improving faster than previously anticipated, while many Layer 2 solutions still face challenges regarding decentralization and ecosystem synchronization. This perspective suggests Ethereum may be moving towards a more balanced development model instead of relying solely on the "rollup-centric" strategy that was XEM cornerstone for many years.
The ENSv2 upgrade is expected to bring several notable technical improvements, most notably a hierarchical registry system that allows ETH domain owners to control and create subdomains more flexibly. This opens up many application possibilities in the fields of digital identity, Web3 brand management, and the development of ENS based service ecosystems.
