A brief analysis of Namechain launched by ENS: a digital identity chain that provides a unified user identity

Following Uniswap, another established industry infrastructure application ENS (Ethereum Name Service) will also release its own Layer2—Namechain.

ENS is known as a pearl in the Ethereum application ecosystem and is considered a benchmark application. Vitalik Buterin also often mentions this project.

Now, ENS has released its own Layer2, which is also worthy of our attention.

The vision behind Namechain is actually: to unify multi-chain user identities and build a digital identity chain with unified user identities.

As a decentralized domain name service, ENS can further expand its application scope through Namechain, not only limited to the Ethereum ecosystem, but also become a cross-chain identity solution.

Next, we can analyze it in detail.

Why launch Namechain?

If you want to understand why ENS launched layer2, you must first understand the problems ENS is currently facing.

ENS, a decentralized domain name service deployed on the Ethereum mainnet, currently faces high transaction costs and scalability issues.

The high gas fees on the Ethereum mainnet make it very expensive to register, renew, and interact with ENS domain names, as well as any operations involving smart contracts. Especially when the Ethereum network is congested or the gas price rises, the cost of these operations for users will increase significantly.

This limits more users from using ENS.

On the other hand, the present and future is a multi-chain landscape, with more and more chains emerging. However, it can be found that different chains will copy the ENS code and redeploy a domain name application. This is reinventing the wheel and does not create any value.

Moreover, on different chains, users have different domain name identities, which actually gives a very poor user experience. Users need to have a unified identity in the digital world.

But ENS is currently limited to Ethereum. ENS was originally designed for Ethereum, which means that it directly relies on Ethereum's blockchain architecture, including its gas fee system, smart contract execution environment, etc.

Therefore, ENS faces the scalability problem of multiple chains.

The solution provided by ENS

ENS has also been working hard to solve these problems and has tried many solutions.

For example, ENS has reduced gas fees to a certain extent by improving smart contract logic and reducing unnecessary on-chain operations; it has also adopted batch processing technology to merge multiple operations into a single transaction to reduce the gas cost of a single operation.

However, these solutions do not fundamentally solve the problem. They are only basic optimizations, and the fees and management costs paid by users are still very high.

If more people are to use ENS services, ENS needs to make more changes. The solution now is to adopt its own application chain.

On the one hand, Namechain uses zero-knowledge proofs and Rollups technology to significantly reduce transaction fees. By batching transactions, it can reduce the cost of recording data on the Ethereum mainnet.

On the other hand, through this Layer 2, Namechain can interoperate with other blockchains more easily, enhancing the multi-chain support of ENS domain names.

Namechain is expected to be live by the end of 2025.

The launch of Namechain will further drive demand for ENS domain names, increase the attractiveness of the ENS ecosystem, and influence the development direction of other blockchain domain name services.

How is Namechain implemented specifically?

Namechain is a ZK Rollup (Zero-knowledge proofs), which did not choose Optimism's OP Stack, but chose to use zkSync's ZK Stack technology. (Not yet fully confirmed)

Many well-known projects use OP Satck, such as Base, Uniswap, etc.

ENS's Namechain has not joined OP's Superchain ecosystem, which means a certain loss of liquidity and interoperability.

But the core reason why ENS made this choice is: privacy.

Because privacy is the primary consideration for user identity, it is more appropriate to use ZK technology.

Zero-knowledge proof allows one participant (the prover) to prove to another participant (the verifier) that they know a piece of information or that it is correct, without revealing the specific content of the information. In blockchain transactions, this means that the details of the transaction (such as the transaction amount, the parties to the transaction, etc.) can be hidden.

This is very useful for ENS domain name transactions, management, and other operations, because users can prove that they have performed a valid operation (such as registering or updating a domain name) without revealing which domain names they own.

Therefore, ENS's choice of ZK Stack was both unexpected and reasonable.

Will Namechain further increase the fragmentation of Layer2 liquidity?

As a Layer 2 solution designed specifically for ENS, Namechain will not directly increase liquidity fragmentation.

Because its main purpose is to improve the efficiency of ENS services, rather than to serve as an independent ecosystem to attract a wide range of diversified transactions.

This is the difference between application chain and general chain.

However, if ENS users and developers want to use Namechain for other types of transactions or interact with other Layer 2 solutions, they may face liquidity fragmentation.

So while Namechain’s proprietary nature may not directly increase liquidity fragmentation, ENS will need to consider how to ensure it remains interconnected with the broader decentralized finance ecosystem in order to provide a seamless experience for users.

How can Namechain provide a seamless experience for users?

The biggest problem Namechain faces is how to provide users with a seamless experience.

ENS has built a new chain, but ordinary users simply cannot understand the relationship and usage of different chains.

Therefore, ENS's Namechain can be considered to be combined with the chain abstraction solution.

Chain abstraction allows users to use ENS services without having to worry about the details of the underlying blockchain, such as transaction fees, blockchain interactions, etc., providing a more intuitive and simplified user experience.

ENS uses chain abstraction technology to develop a standardized interface that allows Namechain’s DIDs (decentralized identities) to work seamlessly across multiple blockchains.

When verifying across chains, a unified system is implemented so that the user’s ENS domain name or identity can be verified on different chains, and the user only needs to handle the identity setup once.

Therefore, Namechain combined with chain abstraction can manage cross-chain ENS domain names by providing a standardized and simplified interface, making it easier to use the same ENS identity across different blockchains.

Summarize

The vision behind Namechain is built around unifying multi-chain user identities.

In a multi-chain environment, users often need to manage multiple identities on different blockchains, which is not only complicated but also reduces the user experience.

Namechain provides a unified identity solution that allows users to use the same ENS domain name as their digital identity on multiple blockchains. This unification simplifies operations for users between different ecosystems.

Through this unified identity management system, users can better control their data and privacy and reduce the security and privacy risks brought by managing multiple identities.

Compared with traditional multi-chain operations, Namechain provides a smoother user experience, similar to the application of single sign-on (SSO) in the traditional Internet, making user interaction between blockchains more seamless.

Data ownership, privacy, and composability are the unique values that only blockchain applications can provide.

We can continue to pay attention to Namechain and these application chain ecosystems.