in a recent community call, the team behind the Ethereum Name Service (ENS) revealed plans to adopt a Layer-2 platform in light of rising gas fees on the mainnet. In response to this planned move, ENS prices rose roughly 10%, floating higher with increasing trading volumes evident on the daily chart.
The Ethereum Naming Service
ENS is a decentralized naming system on Ethereum. It provides an easy-to-use, human-readable naming system that allows users to rename mainnet addresses, smart contracts, and other resources. This system allows users to create and use memorable domain names instead of complicated addresses.
The team behind ENS believes that their solution makes it easy for everyone to interact with the pioneering smart contracting platform and is useful, especially for sending and receiving transactions. In this arrangement, the platform maps a user’s domain, human-readable address, to their original address or smart contract implemented on the Ethereum mainnet.
However, since ENS maps all addresses on the Ethereum mainnet, transaction fees apply, a concern considering the fluctuating gas fees on Ethereum. On Ethereum, all transactions, including transfers or the implementation of smart contracts, must be paid for. The amount paid depends on the level of demand on the network, and the value tends to be volatile. In recent weeks, Ethereum gas fees have increased.
fluctuating gas rates
According to YCharts data On June 30, the average gas fee for sending a transaction was $34.62, down from $42.77 on June 5. As of May 12, it stood at $77.88. The only time gas fees on Ethereum fell was on June 25, when it was at $16.58. At this level, the gas rate is relatively high compared to other networks. For example, the average transaction fee in Bitcoin was $2,383 on June 30, down from $9,018 on May 12.
Meanwhile, on layer 2 platforms, transaction fees and smart contract implementation costs are relatively lower, according to trackers. as a illustrationGas fees on Optimism, a popular layer 2 of Ethereum, is $0.03 as of July 2.
Considering the high gas fees on Ethereum, ENS, through two enhancement proposals, ENSIP-10 and EIP-3668, will further expand to a Layer 2 platform as relief for users sensitive to high gas fees. gas on Ethereum as part of improving interoperability. During the call, the team said that this would scale the platform and open up the service to more people.
In response, ENS prices rallied 10% on the last trading day, changing hands at $9.42 on rising trading volumes. Still, it remains to be seen if prices will continue to rise once the platform migrates to a Layer-2 platform. For now, the ENS has registered more than 2.73 million names owned by more than 697,000 entities.
Featured Image from Canva, Chart from TradingView
