ENS cancels Namechain L2 — will launch ENSv2 on Ethereum L1 after major L1 scaling
ENS (Ethereum Name Service) has abandoned its planned Namechain Layer‑2 rollup and will deploy ENSv2 directly on Ethereum mainnet (L1). ENS lead developer nick.eth cited a roughly 99% decline in name‑registration gas costs and recent protocol upgrades — notably the Fusaka upgrade that raised the block gas limit to about 60 million — as key reasons for the shift. Ethereum core developers are targeting a 200 million gas limit by 2026 and further throughput gains from upcoming ZK upgrades, reducing the need for an ENS‑specific rollup. ENS will maintain interoperability with L2s and cross‑chain registration flows but will focus engineering effort on ENSv2 features: a redesigned registration architecture, improved ownership and expiry handling, and per‑name registries to simplify cross‑chain operations. The pivot follows ENS’s November 2024 Namechain proposal that aimed to cut registration costs via rollups; improved L1 throughput and much lower fees made a dedicated L2 unnecessary. For traders, the decision reduces complexity risk around ENS adoption and keeps ENS tightly aligned with Ethereum L1 performance trends, while preserving optional L2 compatibility for broader ecosystem use.
Bullish
The news is bullish for ETH and the ENS ecosystem for several reasons. First, ENS choosing L1 deployment signals confidence in Ethereum’s improving base‑layer throughput and lower gas costs — metrics that directly affect user adoption and on‑chain activity tied to ENS names. A ~99% decline in registration gas costs and higher block gas limits reduce friction for users and onboarding, which should increase demand for ENS name registrations and related activity on Ethereum. Second, avoiding a bespoke L2 lowers technical and UX complexity, reducing fragmentation risk and execution uncertainty that can weigh on short‑term sentiment. Third, maintaining L2 interoperability preserves optionality for future scaling while letting ENS capture immediate gains from cheaper L1 transactions. In the short term, expect modest positive sentiment-driven flows into ETH as traders price in improved L1 economics and reduced product risk; any direct price moves will likely be limited and short‑lived because the change is incremental rather than transformational. In the medium-to-long term, sustained lower fees and better user experience could boost on‑chain activity, strengthening fundamentals for ETH and ENS‑related services, which supports a constructive outlook for price appreciation over time.