ENS DAO to Vote on Layer 2 Expansion Plans

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 fees.

ENS Labs, the entity behind the Ethereum Name Service (ENS) network, plans to take the blockchain naming service to layer 2 infrastructure.

In a blog post on May 28, ENS Labs proposed that the next generation of ENS would be called “ENSv2” and would focus on migrating core parts of the protocol from the Ethereum mainnet to a layer 2 network.

“We believe that now is the right time for us to begin moving parts of ENS, such as .eth name registration, to L2,” said ENS Labs in a post on X.

“Beyond the benefits of reduced gas fees and increased transaction speeds, extending ENS to use an L2 opens the door for us to re-architect ENS based on the last 7 years of our experience building at the frontier.”

ENS is a domain naming system built on Ethereum that allows the randomly generated numbers and letters in a typical wallet address to be converted into more recognizable words. These human-readable names minimizes the risk of sending funds to the wrong address.

The ENS DAO has put forth a proposal for the community to deliberate on whether this move is a step in the right direction, and the method by which the proposed migration would take place. 

ENS Labs hasn’t decided whether it intends to select an existing layer 2 network to migrate to, or whether to build out its own custom network, but the proposal includes a formal request for additional funding from the DAO to support either of these two cases.

“In the coming weeks we will put forward an executable proposal to request an annual budget increase of 4 million USDC, which will be primarily allocated to hiring additional developers and covering infrastructure costs related to L2 development and deployment,” said ENS Labs in the proposal.

To guide its decision making process, ENS has developed a framework to select the ideal layer 2 network. The key requirements would be a network that is Ethereum Virtual Machine (EVM) compatible, decentralized, censorship-resistant and open source.

In order to minimize the disruption to decentralized applications (dApps), wallets, and users, the planned migration would take place in phases. It is worth noting that users will have the flexibility to keep their domain names on the mainnet if they choose not to migrate to the layer 2 network.