ENS Scraps Layer-2 Plans as Ethereum Fees Drop 99% and Buterin Backs the Pivot

The Ethereum Name Service (ENS) has officially scrapped plans for its custom Layer-2 network, Namechain, and will deploy its ENSv2 upgrade entirely on Ethereum's Layer-1 mainnet. The reason is simple: Ethereum got cheap enough that a dedicated L2 no longer makes sense. Registration gas costs have dropped 99%, from around $5 to under $0.05. Vitalik Buterin himself endorsed the pivot, calling it "a good decision."

For a protocol that serves as Ethereum's decentralized identity layer, that's a big strategy reversal and a loud vote of confidence in L1 scaling.

Why Did ENS Plan a Layer-2 in the First Place?

ENS announced the Namechain concept in 2024 as part of its ENSv2 roadmap. The idea was straightforward: build a purpose-built L2 to handle cheaper and faster domain registrations, renewals, and record updates. At the time, L1 gas fees were still high, and the broader Ethereum community was deeply into rollup-centric thinking. The announcement even sparked a temporary 10% pump in the ENS token.

But Ethereum didn't stand still. Gas limits increased to 60 million. Post-Fusaka hard fork upgrades doubled network capacity. L1 hit a record 2.5 million daily transactions. By early 2026, the cost problem Namechain was designed to solve had largely solved itself.

What Pushed ENS to Cancel the Namechain Plans?

Two things converged: plummeting fees and a philosophical shift at the top.

ENS lead developer Nick Johnson put it plainly in the official announcement: "Ethereum L1 is scaling faster than almost anyone predicted." He added that when comparing L1's current costs to "the complexity and operational overhead of running our own L2, the calculus has fundamentally shifted."

Then came Buterin's influence. In early February 2026, the Ethereum co-founder posted on X that the original rollup-centric roadmap "no longer makes sense," pointing to slow L2 decentralization progress and rapid L1 improvements. On February 6, he directly endorsed the ENS pivot:

"It's a good decision! ENS names and records are a form of state that is central to the Ethereum ecosystem. With the expanded scaling roadmap, Ethereum L1 is the ideal place for these applications."

Buterin suggested a hybrid model going forward: keep core per-user data like ENS records on L1, while special-purpose L2s handle heavier actions like social interactions.

What Does This Mean for Ethereum?

This is bullish for mainnet demand. ENS is a foundational protocol infrastructure. Every .eth name registration, every record update, every resolution now stays on L1. That means more transactions, more fees burned, and more activity anchored directly to Ethereum.

It also simplifies the user experience. One of the loudest complaints about L2 proliferation has been liquidity fragmentation. Users bounce between chains, bridge funds, and deal with inconsistent tooling. By staying on L1, ENS avoids all of that.

The broader implication is even more interesting. If a protocol as prominent as ENS decides L1 is good enough, it raises questions about the dozens of L2s competing for attention. Some community members noted the irony: L2s helped push fees down, but now that L1 is cheap, many of those same L2s struggle to justify their existence. Buterin himself warned that most L2s now "lack purpose" amid falling mainnet fees.

Solana co-founder Anatoly Yakovenko made a similar argument back in 2023, stating that "one L1 is all you need" if fees stay low. The ENS decision gives that argument fresh ammunition.

How Did the Community React?

Mostly positive. Replies to the BSC News post on X leaned bullish, with one user calling it "best news this year." Others praised the focus on keeping critical infrastructure where it belongs: on L1, with full Ethereum security.

Skeptics cited earlier discussions from 2024, in which L2 fragmentation had already frustrated developers and users. For them, the ENS pivot validates what they'd been saying all along: the multi-L2 approach created more problems than it solved.

How the ENS token price reacts remains to be seen, but increased L1 activity from ENSv2 could benefit both ENS holders and ETH itself through higher fee burn.

For the latest on ENS and Ethereum scaling, follow @ensdomains and @ethereum on X.

Sources:

• ENS Official Blog — Primary announcement from Nick Johnson detailing the Namechain cancellation and ENSv2 L1 deployment
• The Block — Reporting on the ENSv2 pivot with quotes from Johnson and context on Buterin's roadmap reversal
• CoinDesk — Coverage of ENS scrapping the planned rollup, including Johnson's comments on L2 cost-saving advantage fading
• CryptoSlate — Analysis of Buterin's broader critique of the rollup-centric roadmap and its implications for L2s
• Wu Blockchain (Substack) — Weekly roundup covering Buterin's L2 reevaluation and the ENS Namechain discontinuation