Ethereum’s Scaling Leap Renders ENS Layer 2 Plan Obsolete

In a significant development reflecting Ethereum's rapid evolution, the Ethereum Name Service (ENS) has officially abandoned its plans to build a custom Layer 2 blockchain, named Namechain. This strategic pivot, announced in early 2026, is a direct consequence of unexpected and substantial scalability improvements achieved on the Ethereum mainnet itself. The decision underscores a major milestone in Ethereum's roadmap, where foundational scaling enhancements are now making previously necessary auxiliary solutions redundant. Originally, Namechain was conceived to address the high transaction costs associated with registering and managing .eth domain names by moving these operations off the main Ethereum chain. However, a pivotal upgrade in 2025, which successfully doubled Ethereum's gas limit to 60 million, dramatically reduced base-layer congestion and gas fees. This improvement in core network performance effectively eliminated the primary economic rationale for a separate ENS-specific chain. Consequently, the ENS development team has decided to scrap the proprietary Layer 2 project entirely. Instead, the forthcoming ENSv2 upgrade will be deployed directly on the Ethereum Layer 1 mainnet. Importantly, this shift in infrastructure does not mean a rollback of planned features; all the user experience (UX) and functionality upgrades intended for ENSv2 will be preserved and implemented. This move is expected to simplify the ecosystem by reducing fragmentation, maintaining the security guarantees of Ethereum's base layer, and providing users with a seamless experience. For end-users, a key benefit remains intact: the ability to manage all their .eth domains and related records through a single, unified interface. This episode is a powerful testament to Ethereum's accelerating maturation. It highlights how core protocol improvements can preempt the need for complex, application-specific scaling workarounds, strengthening the network's cohesive development. For observers and investors, this is a bullish signal for Ethereum's fundamental capacity to evolve and meet demand through its primary layer, potentially increasing its long-term utility and value proposition as the foundational settlement layer for the decentralized web.

ENS Abandons Custom Layer 2 Plan as Ethereum Scaling Improves

The ethereum Name Service (ENS) has scrapped development of its proprietary Namechain Layer 2 solution, citing unexpected scalability improvements on Ethereum's mainnet. Originally conceived to reduce costs for .eth domain registrations, the custom chain became redundant after Ethereum's gas limit doubled to 60 million in 2025.

ENSv2 will now deploy directly on Ethereum L1 while retaining planned UX upgrades. Users gain single-step registrations, cross-chain stablecoin payments, and a redesigned registry system. "Ethereum now provides superior infrastructure guarantees," stated the team, noting L1 transaction costs have fallen below thresholds that previously justified Layer 2 development.

The pivot reflects Ethereum's accelerated scaling trajectory. When Namechain development began, the ecosystem anticipated LAYER 2 solutions as the primary scaling path. Recent protocol upgrades have rendered that assumption obsolete for some applications.

Ethereum Faces Liquidation Zones as Price Dips Below $2,000

Ethereum has breached the critical $2,000 support level, signaling a bearish turn as selling pressure mounts across crypto markets. The downturn reflects weakening macro sentiment, outflows from risk assets, and fading short-term demand for digital currencies. Traders now eye key liquidation zones between $1,700 and $1,000 where Leveraged positions could unravel.

On-chain data reveals three concentrated liquidation clusters that may dictate ETH's next moves. These danger zones historically amplify volatility during corrections, acting as magnets for panic selling. The market remains fragile—even neutral transactions by Ethereum co-founder Vitalik Buterin have sparked outsized reactions among jittery traders.

Trend Research Offloads Ether Holdings Amid Market Downturn to Service Debt

Crypto treasury firm Trend Research has executed a significant reduction in its Ether holdings following a sharp market decline, transferring over 400,000 ETH to exchanges. The MOVE aims to manage outstanding debt obligations as leveraged positions neared liquidation thresholds.

Ether's price plummeted nearly 30% weekly, bottoming at $1,748 before recovering to $1,967. Blockchain data reveals the firm's Aave-wrapped ETH balance dropped from 651,170 to 247,080 tokens within days, with 411,075 ETH moved to Binance since month-start.

The deleveraging event highlights risks in crypto-native treasury strategies. Trend Research had employed a recursive collateralization approach - borrowing stablecoins against ETH collateral to accumulate additional exposure. Market conditions forced unwinding this position, creating cascading sell pressure.

ENS Labs Abandons Namechain L2, Opts for Ethereum Mainnet in ENS V2 Upgrade

ENS Labs has pivoted from its Layer-2 Namechain initiative, announcing ENS V2 will deploy exclusively on Ethereum's mainnet. The decision, communicated via the project's official X account, underscores a strategic realignment toward base-layer infrastructure amid declining transaction costs and improved scalability.

Market participants reacted swiftly, with ENS token price volatility reflecting the news. Ethereum's infrastructure upgrades—reducing fees by ~99% over the past year—rendered a dedicated rollup redundant. The move prioritizes security, user experience, and ecosystem interoperability, eliminating bridging complexities for ENS users.

"The base chain now delivers the efficiency we sought from an L2," the team stated, highlighting Ethereum's accelerated scaling trajectory. ENS domains like 'alice.eth' remain pivotal for human-readable crypto transactions, with the upgrade reinforcing Ethereum's dominance in decentralized identity solutions.

Ethereum Whales Accumulate Amid Market Volatility

Long-term Ethereum holders are shifting into accumulation mode as price volatility persists. On-chain data reveals significant withdrawals by whale addresses, signaling renewed confidence in ETH's value proposition.

Two prominent whales withdrew a combined 29,079 ETH ($60 million) from exchanges on February 7. The larger transaction involved 19,503 ETH ($40 million) moved from OKX, while another 9,576 ETH ($19.78 million) exited Binance. These movements follow a pattern of veteran investors moving assets to self-custody solutions.

The accumulation trend extends beyond active traders. A dormant address reemerged after two years to withdraw 10,000 ETH ($19.24 million) from Binance, while another whale returned from a year-long hiatus to acquire 1,892 ETH ($3.75 million). Such activity suggests sophisticated investors are positioning for the next market cycle.

Market indicators support the accumulation thesis. Ethereum's MVRV ratio currently hovers NEAR 0.96, maintaining a crucial support level above 0.80. Historical data shows that periods below this threshold often precede price recoveries, making current whale activity particularly noteworthy.