Article source: Yue Xiaoyu
Following Uniswap, another established industry infrastructure application ENS (Ethereum Name Service) will also launch its own Layer 2—Namechain.
ENS is known as a gem in the Ethereum application ecosystem, considered a benchmark application, and Vitalik Buterin often mentions this project.
Now, ENS has launched its own Layer 2, which is also very worthy of our attention.
The vision behind Namechain is: to unify multi-chain user identities and build a digital identity chain of unified user identities.
As a decentralized domain service, ENS can further expand its application scope through Namechain, not limited to the Ethereum ecosystem but becoming a cross-chain identity solution.
Next, we can analyze this in detail.
Why launch Namechain?
To understand why ENS launched layer2, one must first understand the problems ENS currently faces.
ENS, as a decentralized domain service, is deployed on the Ethereum mainnet and currently faces high transaction costs and scalability issues.
The high gas fees on the Ethereum mainnet make the registration, renewal, and any operations involving smart contract interactions for ENS domains very expensive. Especially when the Ethereum network is congested or gas prices rise, the cost for users to perform these operations will significantly increase.
This limits more users from using ENS.
On the other hand, the present and future is a multi-chain landscape, with more and more chains emerging. However, it can be observed that different chains will replicate ENS code to redeploy a domain application, which is just reinventing the wheel without creating any real value.
Moreover, on different chains, users have different domain identities, which actually leads to a very poor user experience; users need a unified identity in the digital world.
However, ENS is currently limited to Ethereum; ENS was originally designed for Ethereum, which means it directly depends on Ethereum's blockchain architecture, including its gas fee system and the execution environment for smart contracts.
Therefore, ENS faces multi-chain scalability issues.
The solution provided by ENS
ENS has also been working to solve these problems and has tried many solutions.
For example, ENS reduces unnecessary on-chain operations by improving smart contract logic, thereby lowering gas fees to some extent; it has adopted batching technology to combine multiple operations into a single transaction to reduce the gas cost of each individual operation.
However, these solutions do not fundamentally solve the problem; they are basic optimizations, and the costs that users pay and the management costs remain very high.
If more people are to use ENS services, ENS needs to make more changes, and the current solution is to adopt its own application chain.
On one hand, Namechain leverages zero-knowledge proofs and Rollups technology to significantly reduce transaction costs. By batching transactions, it can lower the cost of recording data on the Ethereum mainnet.
On the other hand, through this Layer 2, Namechain can more easily interoperate with other blockchains, enhancing the multi-chain support for ENS domains.
Namechain is expected to launch by the end of 2025.
The launch of Namechain will further drive demand for ENS domains, enhance the attractiveness of the ENS ecosystem, and influence the development direction of other blockchain domain services.
How does Namechain specifically achieve this?
Namechain is a ZK Rollup (Zero-knowledge proofs) that did not choose the Optimism OP Stack but opted for zkSync's ZK Stack technology. (Not fully confirmed yet)
Many well-known projects use the OP Stack, such as Base, Uniswap, etc.
The absence of ENS's Namechain in the OP Superchain ecosystem means a loss of certain liquidity and interoperability.
However, the core reason for ENS making this choice is privacy.
Since privacy is the primary consideration for user identity, it is more suitable to adopt ZK technology.
Zero-knowledge proofs allow one participant (the prover) to prove to another participant (the verifier) that they know certain information or that the information is correct without revealing the specific content. In blockchain transactions, this means that the details of the transaction (such as the transaction amount, the parties involved, etc.) can be hidden.
This is very useful for ENS domain transactions, management, and other operations, as users can prove they have performed a valid operation (such as domain registration or update) without exposing which domains they own.
Thus, ENS's choice of ZK Stack is somewhat unexpected yet reasonable.
Will Namechain further increase Layer 2 liquidity fragmentation?
Namechain, as a Layer 2 solution specifically designed for ENS, will not directly increase liquidity fragmentation.
Because its main purpose is to improve the efficiency of ENS services, not to attract a wide variety of transactions as an independent ecosystem.
This is the difference between application chains and universal chains.
However, if ENS users and developers wish to use Namechain for other types of transactions or interact with other Layer 2 solutions, they may face liquidity fragmentation issues.
Therefore, although Namechain's specificity may not directly increase liquidity fragmentation, ENS will need to consider how to ensure its interconnection with a broader decentralized financial ecosystem to provide users with a seamless experience.
How can Namechain provide users with a seamless experience?
The biggest challenge Namechain faces is how to provide users with a seamless experience.
ENS has built a new chain, but ordinary users cannot understand the relationships and usage of different chains at all.
Therefore, ENS's Namechain can consider integrating with chain abstraction solutions.
Chain abstraction allows users to use ENS services without worrying about the underlying blockchain details, such as transaction fees and blockchain interactions, providing a more intuitive and streamlined user experience.
ENS uses chain abstraction technology to develop a standardized interface that allows Namechain's DID (decentralized identity) to work seamlessly across multiple blockchains.
During cross-chain validation, implementing a unified system allows users' ENS domains or identities to be verified across different chains, while users only need to handle identity setup once.
Therefore, after combining with chain abstraction, Namechain can manage cross-chain ENS domains by providing a standardized and simplified interface, making it easier to use the same ENS identity across different blockchains.
Summary
The vision behind Namechain is built around unifying multi-chain user identities.
In a multi-chain environment, users often need to manage multiple identities across different blockchains, which is not only complex but also reduces user experience.
By providing a unified identity solution, Namechain allows users to use the same ENS domain as their digital identity across multiple blockchains. This unification simplifies user operations across different ecosystems.
Through this unified identity management system, users can better control their data and privacy, and reduce security and privacy risks associated with managing multiple identities.
Compared to traditional multi-chain operations, Namechain offers a smoother user experience, similar to the application of single sign-on (SSO) in the traditional internet, making user interactions across blockchains more seamless.
Data ownership, privacy, and composability are the unique values that only blockchain applications can provide.
We can continue to pay attention to Namechain and these application chain ecosystems.
