Ethereum Name Service Introduces Layer 2 Interoperability $ETH

Ethereum Name Service (ENS) Labs has announced plans to introduce Layer 2 (L2) interoperability for its ENS domains during a community call on June 28.

The implementation aims to improve performance, scalability, and cost efficiency for users managing their ENS domains.

The decentralized domain name system is set to implement off-chain resolvers, leveraging an ENS off-chain registrar contract and the services of Coinbase’ cb.id, Lens Protocol, and OptiNames on the Optimism network. This step comes as the L2 ecosystem continues to witness an influx of projects and protocols.

According to L2Beat data, the total value of assets locked on L2 service providers has surged by over 190% in the past year, standing at $9.78 billion at the time of writing. Arbitrum leads the market with a 60% share and a total value locked (TVL) of $5.87 billion.

ENS domain name registrations experienced robust growth in Q2 2021. Dune Analytics data shows monthly ENS domain name registrations totalling 79,463 last quarter. June, marked by a significant drop in gas fees on the Ethereum Network, recorded the highest number of registrations during the quarter with 35,932 ENS name registrations.

While .eth name registrations ended Q2 with a surge, primary ENS name registrations saw a notable decline. A primary ENS name is a unique domain name registered and associated with an Ethereum address on the ENS platform. Moreover, ENS registered a cumulative profit of $4.8 million between April 1 and June 30, despite a 21% dip in revenue during this period. ENS’ annualized revenue has fallen by 5.11%, as per Token Terminal.

The daily price performance chart of ENS showed an increase in ENS token accumulation since mid-June, along with a corresponding 22% value growth. The Relative Strength Index (RSI) and Money Flow Index (MFI) indicators were on an upward trajectory, indicating a bullish run.

The Ethereum Name Service (ENS) plays a pivotal role in enhancing the user-friendliness of the Ethereum network by replacing complex blockchain addresses with easy-to-remember names. With the latest move of introducing Layer 2 interoperability, ENS Labs takes a significant stride towards improving the operational efficiency and cost-effectiveness of managing ENS domains.

This development arrives amidst a growing trend of Layer 2 adoption across the blockchain sphere, an effort to counteract the scalability and performance bottlenecks often associated with the Ethereum mainnet. By enabling Layer 2 solutions, ENS is not only keeping pace with industry trends but also reaffirming its commitment to user experience and network efficiency.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.