A Look Inside ENS Labs’ NameChain – A Layer-2 Solution On Ethereum
In early November, ENS Labs, the team behind ENS, announced their plans to launch a layer-2 solution on Ethereum. The platform, NameChain, is expected to go live by the end of the year.
The decision to launch a layer-2, further helping scale Ethereum and following a long list of tech companies, including Coinbase and Sony, will be part of their grand plan to further redefine blockchain identity.
Blockchain technologies are dynamic and constantly changing. Developers are keen on improving user experiences. Gone are the days when users had to manually write down their private keys for security or share their public addresses for token transfers. Ethereum Name Service (ENS) is at the forefront, driving adoption.
By replacing complex “public keys” with easy-to-read and memorable domains, users can easily transact or even deploy smart contracts.
What Is NameChain?
Ethereum developers have taken different approaches to scale the mainnet.
When operating at optimum speeds, the base layer can only process 15 transactions every second. It slides to about five transactions every second when the network is congested, say, due to a viral meme coin launch or airdrop.
Although there are sidechains like Polygon, rollups—with varying levels of privacy—are popular.
NameChain will be a layer-2 network, “bunding and processing” transactions offline before confirming them on the base layer.
However, unlike Base or Optimism, it will leverage zero-knowledge (ZK) rollups.
There are several advantages of ZK Rollups.
One is that besides better security and privacy; the option allows for quick data compression, translating to faster transaction processing at an even lower cost.
NameChain will rely on the infrastructure of an existing Ethereum-compatible ZK Rollup.
However, according to the team, they have yet to select their zkEVM partner.
Why NameChain Matters?
ENS wants to scale, and relying on the mainnet can slow down its mission.
Gas fees on Ethereum fluctuate heavily, depending on network demand. When fees spike, usually in a bull market, fewer users are willing to mint their name addresses.
As ENS Labs seeks to build an equivalent of the domain name system (DNS) dominating web2, they want to do so in an environment where fees are predictably low.
https://x.com/AlexSlobodnik/status/1861114168889483513
Of interest, and perhaps a big benefit for their current user base, NameChain will be backward compatible with ENS v1.
Therefore, even once the layer-2 is live, there will be no service disruptions.
However, this is not to say there are no fundamental changes.
NameChain will be like ENS v2, an iteration that re-designs the ENS system, allowing the platform to be interoperable with other Ethereum layer-2s.
The ZK Rollup solution will also boast a simplified name management system that makes registering names, managing records, and hosting decentralized websites easy.
ENS Breaks 3-Month Resistance Level
ENS is firm and edging higher when writing.
After the NameChain announcement during the frENSday conference in Bangkok on November 11, ENS has added nearly 11%.
Looking at the ENSUSDT price action in the daily chart, the token is trading above a three-month resistance level.
If ENS bulls press on, the token can easily register new 2024 highs above $34 by the end of Q1 2024.
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