The Ethereum Name Service (ENS) is to Ethereum what the URL is to the internet. And doubly so. The ENS simplifies the process of searching for users and interacting with them, turning the machine-readable addresses into an elegant, short name – which, by the way, even looks like an URL address thanks to the dot separating the name and the suffix.
But the Ethereum Name Service is also a pair of smart contracts whose machinery is not so different from the domain name service (DNS) governing the translation of IP addresses into URLs. Like in Web2, its function extends beyond aesthetics and identity, ensuring that users always only end up with the IP addresses they were looking for.
That’s why ENS domain names holders are less likely to lose funds as a result of a mistyped wallet address or a malware program which secretly swaps a freshly copied crypto address with an illicit one, taking advantage of the trust computer users have for the “copy, paste” keyboard shortcuts.
Why get an ENS?
The demand for ENS domain names is similar to URL addresses, too. To own ENS domain is to secure a name, like an URL or an email address, before someone else does. Adding .eth to the Twitter name, displaying it on the OpenSea account and Etherscan labels the user as crypto enthusiast much like an NFT profile pic does.
On social media, it also helps members of the crypto community recognize each other. When British actor Sir Anthony Hopkins announced he was entering the world of NFT art, he cemented his decision by acquiring an ENS domain, ahopkins.eth. With it, his collection is easier to find and explore, and he’s more visibly associated with the space he declared interest in.
ENS domain names can also come in handy for corporate crypto
enthusiasts. As sports companies were racing to seize the NFT fever of 2021, launching NFT collections and Web3 collabs, Puma made the decision to get an ENS domain Puma.eth. Now readily visible on Twitter, the domain now arguably does more for Puma’s Web3 identity than any single NFT collection.
How to get an ENS?
Ethereum Name Service domains are relatively cheap, starting at just a few bucks. They don’t last forever, though. Every year, or more, depending on the settings the user chooses, they need to be renewed, which costs extra. And then, of course, users also need to pay gas.
The shorter the name is, the more expensive it gets. The most popular suffix is of course .eth, but it’s not the only one available. Users can also create their ENS domain with .com, .org, .io, .app, .xyz, and .art.
Technically, the .eth ENS registry is an ERC721 compliant NFT contract, which means that .eth registrations can be transferred much like any other NFTs. In fact, existing ENS domains can be sold and purchased on OpenSea. In early July 2022 they even topped the charts after a prime domain name, 000.eth, was sold for 300 ETH ($315,000).
Can the ENS survive the crypto winter?
As Bitcoin, Ether, and countless small cryptocurrencies drop sharply in value, some crypto analysts have been asking if the Ethereum Name Service will survive a bear market that sees retail investors leave en masse.
But Ethereum Name Service developers seem not to notice. In fact, they’re releasing a new open-source version of the ENS app, which they said would be “faster, cleaner, and easier to use.” It improves speed and search, and adds mobile-friendly features. As of this writing, in July 2022, it’s still in alpha.
In June 2022, the service added 122,000 new registrations, according to an announcement, bringing its total count to approximately 1.47 million domains. When compared to the number of all Ethereum wallets, which has already surpassed 70 million, it’s a modest result.
The protocol reported $3.3m in protocol revenue, all of which gets passed on to the Ethereum Name Service DAO, as well as 2,500 ETH in revenue, the third best monthly result ever. And that’s at a time when crypto winter is in its full swing, so the Ethereum Name Service could stick around after all.
Does the ENS have a token?
Yes. The ENS governance token is the foundation of the ENS DAO (decentralized autonomous organization). ENS token holders can use their supply to vote on the protocol's next moves and investments for the entire domain name system.
Most recently, the DAO released a document called the ENS Constitution, which includes "binding rules that determine what governance actions are legitimate for the DAO to take." Its digital edition is available for free.