By
Bhushan Akolkar
May 10th, 2024
The Ethereum Name Service (ENS) allows users on the Ethereum blockchain network to replace long, complex crypto wallet addresses with simple, human-readable .eth domain names. This makes sending and receiving transactions much easier.
On January 3rd, Ethereum Name Service (ENS) governance token surged over 70% in value after ETH co-founder Vitalik Buterin posted praise for the ENS system on his X account, calling it “super important”.
Buterin said that all layer-2 scaling solutions built on Ethereum (ETH) should work to directly integrate ENS solutions into their systems. Layer-2 helps scale ETH by handling transactions off the main blockchain while still benefiting from its security. Enabling ENS on these layer-2s would allow users to seamlessly send transactions using only .eth names without needing to worry about resolving addresses across networks.
What Is the Ethereum Name Service?
The Ethereum Name Service launched in 2021 as a decentralized alternative to the traditional Domain Name Service (DNS) system. Like DNS does for websites, ENS converts human-readable domain names into machine-readable addresses. But instead of controlling domains centrally like with DNS, ENS domains are decentralized and registered directly on the Ethereum blockchain.
The advantages of this approach include censorship resistance, privacy, and user control. No single entity can revoke a registered ENS domain or censor transactions made with it. Users have sovereignty over their domains and can easily integrate them into decentralized apps (dApps).
While ENS enjoyed a successful launch in November 2021, it faced controversy a few months later. In February 2022, offensive historical tweets resurfaced from Brantly Millegan, ENS’s former Head of Operations. The tweet states:
“Homosexual acts are evil. Transgenderism doesn’t exist. Abortion is murder. Contraception is a perversion. So is masturbation and porn.”
In response to public criticism over the tweet, Millegan stepped down from his role. At the time this happened, the token was already down by more than 80% to $13 from its high of $83 in just 4 months and the company was keen on keeping users’ trust. Overall, the tweets had no impact on ENS’s overall mission of providing an alternative domain naming infrastructure for Web3 and Ethereum.
Buterin’s Proposal for Native Layer-2 Integration
Buterin’s January 2023 social media post praised ENS’s importance and focused on improving integration with layer-2 networks. He suggested that all major layer-2s should work on building “trustless, merkle-proof-based” ENS resolvers.
All L2s should be working on (trustless, merkle-proof-based) CCIP resolvers, so that we can have ENS subdomains registerable, updateable and readable directly on L2s.
ENS is super-important, it needs to be affordable!https://t.co/Ice1lTttFE
— vitalik.eth (@VitalikButerin) January 3, 2024
This would allow users on ETH layer 2 networks to seamlessly register, update, and resolve .eth domains without needing to communicate directly with the Ethereum mainnet.
Rapid Price Surge After Post
The price of ENS rapidly rose by over 70% following Buterin’s positive remarks. The token’s price climbed from 2023 lows of $7 to $9 up to over $15. This reflects restored market confidence in the project after months of decline mirrored across most crypto assets. The token has risen by more than 40% today alone with the potential for more upward rise.
Overall, Buterin’s comment about the project shows the critical role ENS provides in blockchain infrastructure. Direct native integration with layer-2 networks would streamline Web3 user experiences. This would help drive further adoption by making Ethereum applications easier and more practical to use every day. After this latest surge, the long-term price outlook appears optimistic based on the platform’s strong technical foundations.