Blockchains require complex calculations to verify and record transactions. Miners who carry out these transactions earn cryptocurrency as a reward. However, as the Ethereum network became popular, the number of transactions also increased. This congests network traffic and increases transaction fees (gas fees). These high fees become a serious obstacle, especially for individual users and low-budget projects.

ENSv2 proposes a layer-2 network that will be built on top of Ethereum but operates independently of it. This layer will process transactions faster and cheaper before placing them on the Ethereum main chain. Periodically, transaction information will then be transferred to Ethereum in bulk. In this way, ENSv2 will both benefit from the security of Ethereum and offer faster transactions with lower fees.

The proposal aims to use the layer-2 chain development kit called ZK Stack developed by Matter Labs as the technical infrastructure. ZK Stack leverages an advanced cryptography technique called zero-knowledge proofs. This technique allows presenting mathematical proofs to prove the validity of transactions without revealing all transaction data. In this way, while confidentiality increases, the transaction verification process accelerates.

ENSv2 will provide significant benefits by accelerating and cheapening the process of converting ENS users’ cryptocurrency addresses into human-readable domain names. In this way, users will be able to more easily adopt and use domain names with the “.eth” extension. In addition, new features such as ENS profiles will become available more effectively with the transition to the layer-2 network.

ENS’s transition to layer-2 may constitute an important precedent for the cryptocurrency world. This step could also inspire other blockchain-based applications that suffer from high transaction fees. The success of ENSv2 could accelerate the adoption of layer-2 technology, bringing cryptocurrencies to wider audiences.

Whether or not the proposal will be accepted will be determined by a vote to be held by ENS DAO, a centralist structure responsible for the management of the ENS protocol. Following this vote, the technical development process will begin and will likely last several months. If ENSv2 is successful, cryptocurrency users will have a faster, cheaper and more secure ENS experience.

The ENSv2 offer is an indication of the effort to keep up with the rapidly developing structure of the cryptocurrency world. This transformation could be an important step that will both increase the functionality of ENS and shape the future of cryptocurrencies by revealing the potential of layer-2 technology.