ENSv2 101: Bringing Ethereum Name Service to L2

With its NFT-powered domains, Ethereum Name Service (ENS) has been a cornerstone of Ethereum’s app scene since its inception in 2017. 

Now, the protocol’s stewards at ENS Labs just introduced their biggest development proposal yet: ENSv2. 

This next-gen implementation would extend ENS to an as-yet selected Layer 2 (L2) network for reduced costs, faster transactions, and enhanced functionalities. Here’s a breakdown of the system’s basics and why it marks a significant leap forward.

Why Move to Layer 2?

Of course, the primary motivation for transitioning ENS to an L2 is scalability. 

L2s execute transactions offchain while ensuring data integrity on the Ethereum mainnet, which results in faster transactions and significantly reduced gas fees. 

Embracing an L2 would make ENS more accessible to a broader user base and pave the way for new integrations thanks to a dramatic reduction in gas fees for .eth name registrations and renewals. 

Yet it’s not all just about costs and speed—ENSv2 is also a makeover opportunity. If approved, the system would introduce a new hierarchical registry system. 

In other words, instead of a single flat registry, each .eth name would have its own personal registry, allowing for greater flexibility and control over subdomains and ownership per users’ needs.

Additionally, ENSv2 aims to facilitate smoother integration across various blockchains. With the combination of a CCIP-Read Gateway and compatible resolvers, .eth names would be able to connect trustlessly across different networks like never before.

The L2 Migration Plan

The migration to ENSv2 would be phased to minimize disruption. 

Initial phases would include deploying a new Universal Router interface, followed by the deployment of new registry contracts on both L1 and L2. Ultimately, users would be able to migrate their names to the L2 to benefit from lower costs and faster transactions, but migrating is optional. Existing names would continue to function normally on Ethereum. 

The grand question then is which L2 will the ENS community choose? The ENSv2 technical design doc mentions “ENS Chain,” but that’s likely just a tentative stand-in name until a network is officially selected. 

That said, ENS could create its own L2, e.g. on Optimism’s Superchain, or just deploy directly to Optimism, Arbitrum, Base, Starknet, etc. 

We’ll see what happens, but ENS Labs has proposed a Selection Framework to guide this decision, spanning requirements like Ethereum Virtual Machine (EVM) compatibility to ranking criteria like robust dev tooling options. ENS DAO will make the final approval decision here.

The Big Picture

With reduced gas fees and faster transactions, ENSv2 sets the stage for .eth names to become more affordable and efficient, democratizing access to ENS services. 

This shift, in combination with the new hierarchical registry system and CCIP-READ, will likely lead to an explosion of new apps based around ENS and across a variety of different chains. 

As the onchain ecosystem grows, the ability to manage and resolve names easily and affordably across multiple chains will become increasingly valuable. ENSv2 can become a key component of this interconnected future, supporting everything from crypto social networks to complex financial apps.

Long story short? This upgrade looks like it will mark the beginning of ENS’s mainstream era and support droves of newcomers in the years ahead. In the meantime, track ENS community updates to see how discussions around this big update play out!