Ethereum Layer 2 solutions are taking another L as ENS Labs has scrapped its plans for Namechain, opting to deploy the upgraded ENSv2 protocol directly on Ethereum. The change in plan comes after Ethereum scaling upgrades cut registration gas fees by over 99%, removing the need for a separate chain. Ethereum price is steady around $2,080, and the renewed emphasis on the main chain is reinforcing bullish long-term sentiment among investors.
The move signals a major strategic shift for ENS, echoing Buterin’s view that core infrastructure should stay on Ethereum’s main chain as scaling matures.
Vitalik Buterin did not sugarcoat his stance, suggesting that many current Layer 2 designs could become obsolete as base-layer scaling improves.
ETHEREUM IS PULLING PROTOCOLS BACK TO MAINNET.
ENSv2 just cancelled its L2
and is deploying exclusively on Ethereum L1.Why?
🔹 ENS gas costs down ~99% YoY
🔹 L1 gas limit doubled (30M → 60M)
🔹 UX improvements now ship on mainnetFusaka proved the new upgrade cadence works.… https://t.co/nCWpYdyW5t pic.twitter.com/rnxgkvyQAV
— BMNR Bullz (@BMNRBullz) February 7, 2026
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Are Ethereum L2 Solutions Useless? What Pushed ENS To Make This Move
To understand this pivot, think of Ethereum like a congested and very expensive highway. For years, traffic (transactions) was so bad that tolls (gas fees) skyrocketed to $50 just to register a name. ENS originally planned Namechain as a bypass road, a Layer 2 rollup, to divert traffic and lower costs.
But this solution is no longer needed.
ENS lead developer nick.eth explains that recent network upgrades, including the Fusaka update, have expanded the mainnet’s capacity faster than anyone predicted. Data shows a 99% reduction in registration costs compared to last year.
This directly mirrors recent discussions where Vitalik announced the L2 vision no longer aligns with every project’s needs. If the mainnet is cheap and secure, building a complex new chain is solving a problem that no longer exists.
vitalik just softly but definitively buried the 2022–2024 narrative that "l2 will save ethereum"
now it's official: if your rollup doesn't do anything unique beyond scaling > you're just another l1 with a pretty bridge and marketing
2026 = the year l2 either slows down its… https://t.co/aRVsl2KAgU pic.twitter.com/MN4aLrggNl
— malewicz 🎨 (@malewiczz) February 3, 2026
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What Changes for ENS Users?
Instead of having to bridge assets to a new network to manage their domains, users can stay on Ethereum mainnet while enjoying the low fees usually reserved for L2s.
The upcoming ENSv2 upgrade focuses on a new registry architecture. It offers improved ownership models and flexibility without the technical headache of moving to a different chain. Nick.eth emphasized that ENS needed to meet users where the ecosystem was heading.
While the network has faced challenges, such as when recent upgrades triggered dust attacks, the overall stability and throughput improvements have made mainnet viable again. Engineering efforts are now 80% focused on ENSv2 core features rather than maintaining a custom blockchain.
This move signals a potential trend reversal. For a long time, the narrative was that everything must move to a Layer 2 to survive. ENS staying put suggests that L1 scaling is finally catching up.
While institutional interest returns to Ethereum, projects are realizing that security and simplicity on the mainnet might outweigh the benefits of launching their own chains.
ENS confirms the protocol will remain highly interoperable with existing L2s like Optimism and Arbitrum, ensuring users across the ecosystem are still supported.
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Ethereum Price Analysis: From Forced Sales to Smart Money Loading Up
(Source: TradingView)
Ethereum price trades around $2,066, stabilising after a volatile week that saw dips toward $1,750–$1,800 before rebounding the $2,000 psychological level.
On-chain signals are mixed but telling: Lookonchain tracked heavy selling, including Trend Research depositing their final 651k ETH ($1.34B), realizing approximately $747M losses after near-total liquidation amid margin pressure.
Yet counter-trends emerge: Whales are accumulating aggressively. Recent examples include one withdrawing 60k ETH ($126M) from Binance over 30 hours.
Short-term, resistance at $2,100–$2,150; a breakout could eye $2,300+. Support near $2,000 holds firm for now, with possible retest of the $1,750 level and $1,550 in a bearish case scenario.
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