Following Uniswap, another long-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.
Today, ENS has launched its own Layer 2, which is a move that is worth our attention.
The vision behind Namechain is actually to unify multi-chain user identities and build a unified digital identity chain for users.
As a decentralized domain service, ENS can further expand its application scope through Namechain, not limited to the Ethereum ecosystem, but rather becoming a cross-chain identity solution.
Next, we can analyze this in detail.
Why launch Namechain?
To understand why ENS launched Layer 2, one must first understand the current issues facing ENS.
As a decentralized domain service, ENS is deployed on the Ethereum mainnet and currently faces high transaction costs and scalability issues.
High gas fees on the Ethereum mainnet make the registration, renewal, and any operations involving smart contract interactions for ENS domain names very expensive. Especially during periods of network congestion or rising gas prices, the costs for users to perform these operations increase significantly.
This limits more users from using ENS.
On the other hand, the present and future are multi-chain landscapes, with more and more chains emerging. However, it can be observed that different chains will replicate ENS's 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, meaning it directly relies on Ethereum's blockchain architecture, including its gas fee system and smart contract execution environment.
Therefore, ENS faces scalability issues in a multi-chain environment.
The solution provided by ENS
ENS has also been working hard to solve these problems and has tried many solutions.
For example, ENS has reduced unnecessary on-chain operations by improving smart contract logic, which has lowered gas fees to some extent; it has adopted batch processing technology to combine multiple operations into a single transaction, in order to reduce the gas cost of individual operations.
However, these solutions do not fundamentally solve the problem, as they are basic optimizations, and the fees and management costs that users pay remain very high.
If more people want to use ENS services, ENS needs to make more changes. The current solution provided is to adopt its own application chain.
On one hand, Namechain utilizes zero-knowledge proofs and Rollups technology to significantly reduce transaction fees. By batch processing transactions, it is able to 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 domain names.
Namechain is expected to launch by the end of 2025.
The launch of Namechain will further drive the demand for ENS domain names, enhance the attractiveness of the ENS ecosystem, and influence the development direction of other blockchain domain services.
How exactly does Namechain achieve this?
Namechain is a ZK Rollup (zero-knowledge proofs) that has not chosen the Optimism OP Stack but instead opted for zkSync's ZK Stack technology. (Not yet fully confirmed)
Many well-known projects adopt the OP Stack, such as Base, Uniswap, etc.
ENS's Namechain has not joined the OP Superchain ecosystem, which means it will lose some liquidity and interoperability.
However, the core reason for ENS making this choice is privacy.
For user identity, privacy is the primary consideration, making it 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 of that information. In blockchain transactions, this means that details of the transaction (such as transaction amount, parties involved, etc.) can be hidden.
This is very useful for ENS domain name transactions, management, and other operations, as users can prove they have performed a valid operation (such as domain registration or update) without exposing which domain names they own.
Therefore, ENS's choice of ZK Stack is somewhat unexpected yet reasonable.
Will Namechain further increase Layer 2 liquidity fragmentation?
As a Layer 2 solution specifically designed for ENS, Namechain will not directly increase liquidity fragmentation.
Because its primary goal is to improve the efficiency of ENS services rather than to attract a wide variety of transactions as an independent ecosystem.
This is the difference between application chains and general chains.
However, if ENS users and developers wish to use Namechain for other types of transactions or to interact with other Layer 2 solutions, they may face liquidity fragmentation issues.
Thus, while Namechain's specialization may not directly increase liquidity fragmentation, ENS will need to consider how to ensure its interconnection with a broader decentralized finance ecosystem to provide users with a seamless experience.
How can Namechain provide users with a seamless experience?
The biggest challenge facing Namechain is how to provide users with a seamless experience.
ENS has built a new chain, but ordinary users cannot understand the relationships and usage methods of different chains at all.
Therefore, ENS's Namechain could consider integrating with chain abstraction solutions.
Chain abstraction allows users to use ENS services without worrying about the details of the underlying blockchain, such as transaction fees and blockchain interactions, providing a more intuitive and simplified 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 verification, a unified system can be implemented where a user's ENS domain name or identity can be verified across different chains, and the user only needs to handle the identity setup once.
Therefore, after combining chain abstraction, Namechain can manage cross-chain ENS domain names by providing a standardized and simplified interface, making it easier to use the same ENS identity across different blockchains.
Conclusion
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 diminishes the user experience.
By providing a unified identity solution, Namechain allows users to use the same ENS domain name as their digital identity across multiple blockchains. This unity simplifies users' operations across different ecosystems.
Through this unified identity management system, users can have better control over their data and privacy, reducing the security and privacy risks that come with managing multiple identities.
Compared to traditional multi-chain operations, Namechain provides a smoother user experience, similar to single sign-on (SSO) in traditional internet applications, making interactions between users and blockchains more seamless.
Data ownership, privacy, and composability are unique values that only blockchain applications can provide.
We can keep an eye on Namechain and these application chain ecosystems.
