ENS Gains 10% After Ethereum Layer 2 Blockchain Launch

On Monday, November 11, the crypto market woke up to see the Ethereum Name Service (ENS) token trending as it gained over 10% because the ENS Labs announced a new Layer 2 solution called “Namechain”.

This Ethereum Layer 2 Blockchain is built to scale up blockchain identity as it reduces the cost of registering names through rollups. On Monday, November 11, the executives from the ENS Labs explained the Namechain layer 2 solution in a presentation at the “frENSday” conference in Bangkok.

The new layer 2 solution will be integrated with the ENSv2 protocol of the ENS Labs. The blockchain expanded to the Ethereum layer 2s using this protocol.

The Developer Relations Lead at ENS Labs, Greg Skril explained the utility of the new Layer 2 solution by saying “With ENSv2 and Namechain it will be significantly easier to register names, update records, manage decentralized websites and more”.

The ENS blockchain solution is used by top-level domains like “.org” and “.com” in the domain name system as it is easier to understand and read than IP addresses. Ethereum co-founder Vitalik Buterin is a notable adopter of the ENS blockchain. Buterin uses an Ethereum address called “Vitalik.eth” easily traceable when searched in the ETH block explorer

The ENS token rose 10.8% on Monday on the heels of this announcement. The token went from $19.46 to $21.56 in just 30 mins of the new Layer 2 blockchain announcement. However, it soon plunged to $19.22 as the bullish sentiment from the news slowed down.

ENS Labs developer Jeff Lau said the ENS name domain “.eth” will be anchored on the Ethereum mainnet and ENS will be supported on other ETH Layer 2 solutions. The developer explained why ENS Labs went on to build its own Ethereum Layer 2 blockchain instead of integrating with another chain as they wanted an easy-to-use UX system. Earlier in February, the company revealed that it is researching ways to build its own layer 2 solution, hunting that it partnered with key industry players for this expansion. However, ENS hasn’t made the names of their collaborators public as of yet.

Earlier in September this year, the ENS name service protocol was integrated with payment platforms Venmo and PayPal to facilitate crypto transactions. This integration affected over 270 million users in the United States alone.

At the time of writing on November 12, ENS was down 10.39% in the last 24 hours to trade at $17.91 while its trading volume has decreased by 11.23% to reach $383.45 million and market cap stood at $610.45 million.