E Key Takeaways
In the past 24 hours, Bitcoin has led a crypto market crash after Matrixport struck a blow to traders’ confidence that the Securities and Exchange Commission will approve spot Bitcoin ETFs next week. But one token – Ethereum Name Service (ENS) – has bucked the wider market trend.
At a time when BTC and other leading cryptocurrencies fell between 5% and 10% in 24 hours, ENS surged more than 40% after Ethereum founder Vitalik Buterin endorsed it.
In a recent post on Twitter, Buterin discussed upgrades to the Ethereum ecosystem that could promote the use of ENS.
Arguing that ENS “needs to be affordable,” he endorsed the use of Chainlink’s cross-chain interoperability protocol (CCIP) to make ENS subdomains registerable, updateable and readable directly on Ethereum layer 2 scaling solutions. In line with the renewed interest in L2 scaling incorporated in Buterin’s latest Ethereum roadmap, this approach could significantly boost ENS adoption by driving down the costs associated with registering and managing Web3 domains on the blockchain.
The costs associated with ENS are typically paid in ETH. However, the eponymous governance token is an important feature of the technology. It can influence the protocol’s management and future development.
Ethereum Naming Service is a decentralized domain name system that can link Ethereum addresses with human-readable domains. When combined with IPFS, the ENS protocol can even support fully decentralized web hosting, with domains referencing entire websites.
Most ENS domains consist of a top-level and a second-level domain. For example, in vitalik.eth, eth is the top-level domain and vitalik is the second-level domain.
By adding a third level, however, each domain can be divided into subdomains. This could drive adoption by approximating the Web2 domain name system in which a small number of domain owners administer services for a much larger base of end users, without needing to pay gas fees for each subdomain.