As a long-term crypto investor with experience in the Ethereum ecosystem, I’m excited about the proposal by ENS Labs to expand Ethereum Name Service (ENS) to layer-2 scaling protocols. With millions of .eth names registered and thousands of integrations, ENS is a crucial component of the Web3 infrastructure.
As an analyst, I’d suggest paraphrasing it this way: On May 28th, I came across ENS Labs’ proposal for expanding the Ethereum Name Service (ENS) to layer-2 scaling solutions. They referred to this initiative as “ENSv2.”
The team explained in a blog post that they’re not merely transferring essential components of the ENS protocol. Instead, they plan to completely reimagine its design, leveraging the insights gained over the past seven years at the forefront of Web3 technology.
Introducing ENSv2: The Next Generation of ENS
ENS Labs is thrilled to unveil our plan to expand the ENS protocol onto a Layer 2 network. This isn’t merely a matter of transferring certain aspects of the protocol; instead, we’re reimagining its foundation with a fresh perspective!
— ens.eth (@ensdomains) May 28, 2024
Ethereum Domains Faster and Cheaper
Millions of .eth names have been registered through Ethereum Name Service, with thousands of integrations across various applications such as decentralized apps (dApps), digital wallets, domain name levels, and web browsers, according to the team’s announcement.
Through extending its reach to layer-2 solutions, Ethereum Name Service (ENS) aims to enhance accessibility and affordability for a larger user base. Nonetheless, ENS Labs has not announced which particular layer-2 platform will be adopted for this transition.
As a researcher studying the developments within the Ethereum Name Service (ENS) ecosystem, I can share that the proposed expansion, initially considered in July 2023, is designed to achieve several key objectives. Firstly, it seeks to enhance ENS’s decentralization by introducing new elements and mechanisms. Secondly, it provides opportunities for new use cases and integrations, thereby expanding the potential applications of the platform. Lastly, this expansion aims to address constraints that currently hinder the Ethereum mainnet, ultimately improving its overall functionality and performance.
In addition, shifting to layer-2 brings significant advantages. For instance, you’ll encounter reduced gas fees when registering or renewing .eth domain names. Moreover, the hierarchical registry system allows for greater control and customization. Lastly, it facilitates seamless communication between different blockchain networks by linking .eth domains across them.
“Eskender Abe, Head of Product and Strategy at ENS Labs, stated that the introduction of EIP-4844 significantly reduced costs and enhanced scalability for Ethereum layer 2 networks, a major influence behind ENS’s proposal.”
At the ENS DAO, ENS Labs has presented a plan for expanding their team and covering related expenses through a proposed budget augmentation of 4 million USDC. This proposition, open for debate within the DAO community, awaits a governance vote following thorough discussion.
The total value locked in the layer-2 Ethereum ecosystem reached an all-time high of $47.7 billion this week, in line with the surge in Ether’s price, as reported by L2beat.
ENS Price Outlook
The Ethereum Name Service token, which is natively used within the system, showed no response to the recent announcement and remained stable in value, hovering around $26 during my latest update.
Over the last two weeks, the price of Ethereum Name Service (ENS) has nearly doubled. Prior to that, the token was priced around $14 in mid-May, but it then experienced significant growth and reached a three-month peak of approximately $28 earlier this week.
The price of ENS surged up to $80 when it was distributed for free to domain name owners in November 2021. However, its value has since dropped by approximately 69%, remaining significantly lower than its all-time high.
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2024-05-30 07:30