Ethereum Name Service has deployed ENSv2 on Ethereum mainnet, marking the largest upgrade in the protocol’s history and a clear break from its earlier plan to move the revamp onto its own rollup, Namechain. The launch went live on Oct. 27, roughly nine months after ENS abandoned that L2 strategy.
The shift fits a wider pattern across the Ethereum ecosystem. Over the past year, several projects have either wound down layer-2 deployments, canceled chain plans, or shut down app-specific networks as lower mainnet fees and the ongoing cost of operating separate chains have changed the tradeoffs.
Why ENS changed course
ENSv2 is a full rebuild of the naming protocol behind .eth addresses. Under the new design, each ENS name can run its own registry for subnames, users gain more granular permission controls, and fees can be paid in stablecoins such as USDC.
What stands out most is where the upgrade launched. ENS had spent years working toward an L2-based future that later took shape as Namechain, but on Feb. 6 founder Nick Johnson said Ethereum mainnet was scaling faster than expected. According to Johnson, ENS had seen registration gas costs fall 99% over the prior year, reducing the need to move core functionality elsewhere.
Johnson also argued that keeping ENS on L1 avoids additional trust assumptions that would come with an L2. Vitalik Buterin publicly endorsed the decision the same day, calling it a good one.
A broader move back to mainnet
ENS is not an isolated case. Synthetix, which had been an early adopter of Ethereum rollups in 2021, said in June 2025 that fragmented liquidity and other issues had undermined the L2 thesis for its business. The protocol began unwinding its L2 deployments that summer, and its new perpetuals exchange opened on Ethereum L1 in December.
Other projects followed. Superseed deprecated its chain on Aug. 15 and said it was bringing its ecosystem back to Ethereum mainnet. In September, Trueo, the prediction market protocol used for DefiLlama markets, announced plans to leave Base and return to Ethereum.
The trend accelerated in October. ShapeShift moved its rFOX staking program from Arbitrum to L1 on Oct. 1. Blast said on Oct. 2 that it was winding down because costs were higher than chain revenue. Nillion launched Blacklight on L1 on Oct. 5 while planning to retire its L2, and Abstract said on Oct. 6 that it would shut down on Dec. 15, describing a consumer-only chain as unsustainable as a standalone model.
What is moving back, and what is not
The recent migrations do not necessarily mean every part of an app is returning fully onchain to Ethereum mainnet. A more specific pattern is emerging in which projects keep their most valuable state on L1 while pushing speed-sensitive or low-cost operations elsewhere.
The source article points to several examples. Synthetix’s new perpetuals model matches orders offchain, but user funds remain on Ethereum and trades settle there. Derive V3 follows a similar structure, with offchain matching, zero-knowledge proofs for risk calculations, and user funds held in L1 contracts.
ENSv2 also reflects that split. The NFT names themselves live on L1, while subnames can still resolve from L2s or offchain through CCIP-Read. In practice, ownership, custody, and settlement stay on Ethereum, while cheaper external systems handle some of the heavier operational work.
Why the economics changed
The backdrop to these decisions is Ethereum’s rising L1 capacity. The source article says Ethereum’s gas limit increased from 30 million to 60 million during 2025, helping push mainnet fees lower. At the same time, operating a dedicated chain has proven costly for some teams, as shown by the shutdown announcements from Blast and Abstract within days of each other this month.
That does not settle the long-term architecture debate. Efforts such as the Ethereum Economic Zone aim to make rollups feel more like part of mainnet by enabling tighter cross-chain composability. GnosisDAO, for example, voted in August to convert Gnosis Chain from a standalone L1 into an EEZ rollup.
For now, the next confirmed step is simply that ENSv2 is live on Ethereum mainnet and Namechain is no longer the plan. Whether more apps follow may depend on how much additional room Ethereum gains from future scaling work. The upcoming Glamsterdam upgrade has no mainnet date yet, according to the Ethereum Foundation, though its next testnet target is running at a 200 million gas limit.
Source: www.bankless.com