ENS Labs, a non-profit organization behind the Ethereum Name Service (ENS), has announced plans for an ENSv2 upgrade, which will transition the protocol to a layer 2 network, as stated in a May 28 announcement shared with CryptoSlate.

This move is significant for Ethereum layer-2 networks, which have recently experienced increased adoption, pushing the total value of assets locked on these networks to new highs.

ENSv2

According to ENS, the ENSv2 proposal intends to revamp the protocol with a hierarchical registry to improve the management and customization of .eth domain names.

The upgrade involves shifting ENS’ core functions from Ethereum Layer 1 to a Layer 2 network, offering benefits such as enhanced scalability, reduced gas fees, and faster transaction speeds for users. Developers will also enjoy greater flexibility with the new registry design and other infrastructure improvements. The upgrade is expected to enable multi-chain interoperability as well.

Despite not naming the specific Layer 2 network for the migration, ENS stated on social media:

“We’ve long been monitoring the state of the L2 ecosystem while also contributing with internal innovations such as CCIP-Read and the EVM Gateway. We believe that now is the right time for us to begin moving parts of ENS, such as .eth name registration, to L2.”

Layer 2 networks' growth

Data from L2Beat indicates that the total value of assets locked on Ethereum layer 2 networks has reached a record $47.26 billion, a 15% increase in the past week.

Arbitrum leads with a total value locked (TVL) of $19.3 billion, followed by OP Mainnet with $7.88 billion in TVL, and Coinbase-backed Base in third place with $6.94 billion. Other blockchains with TVLs over $1 billion include Blast, Mantle, Linea, and Starknet.

Experts attribute this growth to renewed investor confidence in Ethereum’s ecosystem, high adoption rates of these networks, and recent ETH price increases, driven by the approval of the ETH ETF.