Enabling On-Chain Native Handshake Second-Level Domains (SLDs)

A technical overview of the path to fully decentralized, trustless subdomain management on the Handshake blockchain

Executive Summary

Handshake (HNS) currently excels at decentralized top-level domain (TLD) management, but second-level domains (SLDs) remain managed off-chain by TLD owners. This creates trust dependencies, centralization risks, and limits the potential for secure, scalable subdomain marketplaces.

Two community proposals — HIP-0015 (Update Chains) and HIP-0016 (Escher Update Chains) — offer a path to native, on-chain SLD functionality using only HNS coins, without bridges or external systems.

The Problem

Handshake natively supports only TLD-level operations via covenants.
SLDs (e.g., name.yourtld) are managed off-chain by TLD owners.
Buyers must trust TLD owners for DNS updates and risk revocation.
Current SLD sales occur off-chain or via centralized registrars.
Bridging to EVM chains adds complexity, fees, and deviates from native HNS.

Goal: Create a fully on-chain, trustless mechanism for SLD minting, transfers, and sales using native HNS.

Current Limitations

No Native SLD Support

Handshake covenants enforce TLD states but lack subtree support.

Off-Chain Risk

SLD ownership depends on TLD owner cooperation.

Centralization

Most SLD sales occur outside the blockchain.

Proposed Solutions

HIP-0015: Update Chains

General framework for committing arbitrary data via sequential UPDATE covenants.

Flexible mini-blockchain for TLD owners
Up to 512 bytes per update
No new consensus rules needed
Limited verification — trust-based
Informational draft (Dec 2025)

HIP-0016: Escher Update Chains

SLD-specific enhancement using Merkle-like "Escher Trees" committed via Update Chains.

Trustless SLD minting, transfers & updates
Urkel proofs for verifiable operations
Native HNS payments on-chain
Unrevocable SLDs (no parent risk)
Light-client verifiable
Requires modest soft fork
Standards-track draft (priority proposal)

Recommendation

HIP-0016 (Escher Update Chains) is the most promising path forward for truly decentralized, native Handshake SLDs.

It provides:

Full on-chain ownership and transferability
Scalability for thousands of SLDs per TLD
Verifiable proofs without full nodes
Alignment with Handshake's lightweight PoW design

Next Steps

Participate in HIP discussions on GitHub and Handshake Discord
Test Update Chain concepts on testnet using hsd
Support community efforts toward soft fork activation

Bringing native SLD support to Handshake could significantly expand its utility in the decentralized web ecosystem.